The Government is releasing an exposure draft of legislation to tax certain trusts like companies with effect from 1 July 2001.
This legislation will implement the Government's policy, which was announced in A New Tax System, of introducing greater consistency in the taxation of entities.
There has been extensive consultation in the development of this legislation. The exposure draft will provide further opportunity for comment on the operation of the new arrangements. The exposure draft legislation also covers the simplified imputation system and franking credits for foreign dividend withholding tax, and an accompanying explanatory statement.
The proposed legislation for taxing trusts like companies achieves the objective of greater consistency in the taxation of entities while minimising compliance and restructuring costs. Under this approach, non fixed trusts will be taxed like companies. Broadly, companies, fixed trusts, limited partnerships and co-operatives will retain their current tax treatment. This approach removes the requirement for the introduction of a collective investment vehicle regime.
The draft explanatory statement which accompanies the exposure draft outlines the areas where further legislation will be introduced to complete the Government’s announced policy.
The release of exposure draft legislation provides the opportunity for additional comment on the proposed law and is a further demonstration of the Government’s commitment to a high level of community involvement in the implementation of its tax reform agenda. The exposure draft can be obtained from the Treasury internet site (www.treasury.gov.au/businesstax) and the ATO web site (www.ato.gov.au).
To facilitate introduction of the legislation into Parliament, comments on the exposure draft should be received by 3 November 2000.
Comments should be sent to:
Assistant Commissioner
Law Design and Development (Entities)
PO Box 900
Civic Square ACT 2608