The Government held a meeting with tax experts today to help clarify the uncertainty around the operation of the 'consolidation rights to future income and residual tax cost setting rules' following a report to the Government on the issue by the Board of Taxation.
The consolidation regime was amended last year to introduce the rights to future income rules and modify the residual tax cost setting rules.
The Board raised concerns with the Assistant Treasurer that, due to uncertainty in the scope of application of the rights to future income rules, tax deductibility may be argued for types of assets that were not contemplated when the rules were introduced. This could result in the rules having a substantially greater revenue impact than anticipated.
"The Government is committed to maintaining the integrity, equity and fairness of the tax system and will act quickly to respond to the Board of Taxation report. I thank the participants of the meeting and look forward to working with them further on this very difficult and complex issue," Mr Shorten said.