The Minister for Revenue and Assistant Treasurer, Senator Helen
Coonan, today announced that the Government would legislate to ensure that there
were no tax consequences resulting from the proposed corporate conversion of
AGL from a company regulated under special NSW legislation to one regulated
under Commonwealth legislation on the same basis as other companies.
AGL and the NSW Government are jointly undertaking a process to
convert AGL from a company of proprietors established under NSW legislation
dating back to 1837 to a company registered under the Corporations Act. Legislation
to give effect to this has been passed by the NSW Parliament.
A number of adverse tax consequences for AGL and its shareholders
could potentially arise under the current tax law. In order to avoid this, and
to provide certainty for AGL and its shareholders, the Government will introduce
legislation as soon as practicable to deem for tax purposes the new AGL resulting
from the NSW legislation to be a continuation of the old AGL.
This will remove tax issues as a possible impediment to the AGL
corporate conversion. Under the deemed perpetual succession, for the purposes
of all Commonwealth tax legislation, and in relation to AGL, its subsidiaries,
its shareholders and any other person, AGL (after conversion into a body corporate
and registration under the Corporations Act) will be regarded as the same entity
as, and a continuation of, the current AGL. It is intended that this legislation
will take effect from the date of the corporate conversion.
Because this legislative amendment could have implications for GST revenues that would otherwise arise from the conversion, the Commonwealth has written to the States and Territories seeking their agreement to this technical change to the GST base, in line with the Intergovernmental Agreement on the reform of Commonwealth-State Financial Relations.