9 December 2005

Changes to Further Improve Tax System

A range of measures to simplify and further improve the tax system have passed the Australian Parliament.

Assistant Treasurer Mal Brough said the measures would provide clarity for business as well as simplifying the tax laws for working Australians. Among the initiatives passed were:

  • Simplifying the tax treatment of related party at call loans of small companies to ensure that companies with a turnover of less than $20 million will treat their related party at call loans as debt.
  • Extending the refundable film tax offset to include qualifying high-budget television series. Attracting large-scale television series to Australia will help increase spending on infrastructure development in the film industry and increase employment and skill development opportunities for local casts, crew and those involved in post-production.
  • Extending the time for consolidated groups and multiple entry consolidated groups to make or revoke choices relating to setting the tax cost of assets and the utilisation of losses until 31 December 2005, and clarify the operation of the bad debt rules for multiple entry consolidated groups.
  • Simplifying the operation of the foreign employment income exemption by allowing different foreign service periods to be aggregated. Australian residents will qualify for the exemption unless the period of absence exceeds one sixth of the total number of days of foreign service at any time.
  • Amending the thin capitalisation regime so taxpayers can choose to defer the impact of the adoption of international financial reporting standards. This will be achieved by allowing taxpayers to continue to use the old accounting standards for thin capitalisation purposes, for three consecutive income years commencing on or after 1 January 2005.
  • Creating a scheme to allow New Zealand wine producers to claim the wine equalisation tax rebate on wine they export to Australia.
  • Adding specifically listed deductible gift recipients approved by government.
  • Amending the secrecy provisions in the income tax law to allow the Australian Bureau of Statistics to obtain further taxation information.