Expert Roundtable to assist in clarifying the operation of the Income Tax General Anti-avoidance rule

The Assistant Treasurer, the Hon David Bradbury MP, today announced an expert roundtable to assist with the implementation of the Gillard Government's clarifications of the definition of 'tax benefit' in Part IVA of the Income Tax Assessment Act 1936.

On 1 March 2012, the Government announced that it would obtain advice from independent experts about how best to implement the proposed clarifications to the operation of Part IVA without unintentionally affecting genuine commercial and business activity.

Consistent with that announcement, the role of the roundtable is to provide advice on how best to implement the proposed clarifications, rather than revisit the policy decisions announced by the Government.

Specifically, the Government has asked the roundtable to provide views on:

• design options for clarifying the operation of Part IVA to overcome the technical deficiencies with the meaning of 'tax benefit' that have been exposed by recent decisions of the Federal Court;
• the terms of draft legislation prepared for public consultation; and
• possible implementation issues.

"This roundtable process will help to ensure that the vast majority of taxpayers who do the right thing and pay their fair share of tax are not inadvertently affected by these changes, but that those taxpayers who are not doing the right thing cannot escape their tax obligations," said Mr Bradbury.

The independent experts on the roundtable include representatives from tax and accounting bodies, legal experts and academics.  Treasury will chair the roundtable.

In addition, formal advice will be sought from senior tax barristers to ensure that the draft amendments are effective and do not have any unintended consequences.

The Government is aware that some taxpayers and their advisers have expressed concern about the intended scope of the proposed amendments announced on 1 March 2012.

"I would like to clarify today that these will be targeted changes, focussed on the definition of 'tax benefit'."

"The Government does not propose to change the core operation of the 'purpose' test in Part IVA, which was designed to be the key determinant of whether the general anti-avoidance rule applies to a scheme."

"This will provide certainty for taxpayers that Part IVA is not an issue unless they have entered into a scheme with the sole or dominant purpose of avoiding tax," the Assistant Treasurer said.

The expert advice provided through this roundtable process will complement the existing Treasury processes for public consultation on these changes.  The Government encourages all interested taxpayers to participate in public consultation on these important clarifications once draft legislation is released.

Attachment
Independent Experts on the Roundtable