The Government will introduce a Bill early in the spring sittings of Parliament to make improvements to the income tax law, including measures to:
- Extend refundable film tax offsets to television series
- Implementing thin capitalisation transitional provisions
- Clarify the consolidation regime
- Extend exemptions on foreign earnings
The refundable film tax offsets scheme amendments will extend the scheme to include television series. Extending the scheme will provide an incentive for high budget television productions to be made in Australia. Significant consultation on this measure has been undertaken with interested parties since its announcement, Federal Assistant Treasurer, Mal Brough, said.
The amendments to the thin capitalisation provisions will implement a previously announced three year transitional arrangement to allow taxpayers to use accounting standards as they existed at 31 December 2004. To ensure these transitional provisions are consistent with existing practice, the amendments will also be extended to allow the use of prudential standards as at the same date.
The amendments to the consolidation regime will clarify the operation of the bad debt rules for multiple entry consolidated groups and the operation of the swap loss rules for consolidated groups and multiple entry consolidated groups. Mr Brough confirmed that The amendments will also extend the time, until 31 December 2005 , for head companies to make or revoke certain choices in relation to setting the tax cost of assets and the utilisation of losses.
Finally, the amendments to the foreign earnings exemption will extend the exemption that applies under section 23AG of the Income Tax Assessment Act 1936 to circumstances where an individual dies before completing 91 days of foreign service, but would otherwise have continued to be engaged in foreign service for 91 days or more. The amendments will apply from 1 July 2004.