The Government today moved to provide greater certainty and flexibility for consolidated groups lodging their consolidated tax returns.
The time for making or revoking elections that ultimately affect a business' taxable income will be extended to 31 December 2005.
"There have been significant legislative changes introduced recently through the Taxation Laws Amendment Bills, and the Government recognises the need to provide businesses with sufficient time to operate under the benefits of these changes before making these important decisions," Assistant Treasurer, Mal Brough, said today.
The Government's decision to extend the deadline comes after discussions between the Government and a number of affected stakeholders - providing consolidated groups an extra 12 months to make, revoke or change, certain elections. Specifically:
- the election to retain the existing tax cost for assets or reset their tax cost ('stick' or 'spread');
- the election to utilise certain losses over three years;
- the election under the 'value donor' concessions for calculating an entity's available fraction;
- the election to waive the capital injection rules where the value donor rules could apply; and
- the election to cancel a loss on the transfer of a loss.
However, the election to form a consolidated or Multiple Entry Consolidated group will remain irrevocable.
The Government recently introduced two Bills which will reduce compliance costs and administrative burdens affecting businesses - the Taxation Laws Amendment (2004 Measures No. 6) Bill 2004 and the Taxation Laws Amendment (2004 Measures No. 7) Bill 2004.
"This extension will enable sufficient time for those amendments, which are currently before Parliament, to pass into law", Mr Brough said.
"This will be the last extension to the time for making such elections"