The last stage of consolidation legislation today passed through Parliament finalising the Government's consolidation package.
Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, said the delivery of consolidation legislation represents a major plank of the Government's business tax reform agenda.
"Consolidation will bring increased commercial flexibility to business and address integrity concerns in the taxation of corporate groups," Senator Coonan said.
"The new consolidation regime is the most significant change to the taxation of corporate groups in decades, freeing up companies to pursue business opportunities and become more competitive."
Special transitional rules, designed to reduce compliance costs on entry to consolidation, are available to groups who consolidate before 1 July 2004. The current grouping rules will generally cease to apply from 1 July 2003.
"Business now has the full consolidation picture and can proceed to finalise the steps required to enter consolidation.
"Given the importance of the consolidation legislation, the Government has undertaken unprecedented consultation with industry.
"The consultations have been open, given taxpayers a say in designing the new rules and resulted in legislation responsive to business needs.
"While not all of the submissions have been adopted, industry has had a large impact on forming this legislation.
"The Government is today announcing two further measures that will clarify aspects of consolidation and reduce compliance costs on entry to consolidation.
"Foreign losses transferred to a consolidated group will be treated the same as other losses using the three year transitional concession for continuity of ownership test losses.
"The Government will also introduce a transitional rule to exclude certain value shifts arising in 2002-03 year from the General Value Shifting Regime.
"While this is the final consolidation bill, some further interactions are still to be finalised including assets previously owned by exempt entities, finance leases, partners and partnerships, commercial debt forgiveness, bad debts and demergers.
"While we are now firmly into the implementation phase of consolidation, further fine tuning may be required as it is bedded down."
The ATO will continue to provide information and assistance to business, particularly small to medium businesses, during the implementation of consolidation. Further information is available on the ATO tax reform website at http://www.taxreform.ato.gov.au.