Today the Government is releasing for public comment an exposure draft of legislation to allow wholly owned groups of companies and trusts to opt to be treated as a single consolidated entity for income tax purposes.
The legislation will implement the Governments policy, which was announced in A New Tax System, of providing wholly owned groups with increased flexibility and reduced compliance costs. The consolidation regime will begin from 1 July 2001.
There has been ongoing consultation on the detail of the consolidation regime. The release of exposure draft legislation provides the opportunity for additional comment on the proposed law. It further demonstrates the Governments commitment to a high level of community involvement in the implementation of its tax reform agenda.
The legislation contained in the exposure draft covers:
- the formation of a consolidated group;
- the circumstances in which losses can be brought in and utilised in a consolidated group;
- the treatment of cost bases of assets in a consolidated group; and
- the removal of certain grouping provisions.
The draft explanatory statement which accompanies the exposure draft outlines the areas where further legislation is being developed to complete the Governments announced policy.
The exposure draft and accompanying explanatory statement can be obtained from the Treasury internet site (www.treasury.gov.au) under Whats New.
Comments on the exposure draft should be received by 2 February 2001 and should be sent to:
Assistant Commissioner
Law Design and Development (Consolidation)
P O Box 900
Civic Square ACT 2608
or can be emailed to consolidation@ato.gov.au.
Submissions will be treated as public unless the author indicates to the contrary. Submissions lodged electronically will be published on the Treasury website.
More information on the exposure draft legislation can be obtained by calling the Treasury Tax Reform Help Line on 13 63 20.