On 18 May 2012, the then Assistant Treasurer announced that the Board would undertake a post-implementation review of Division 7A of Part III of the Income Tax Assessment Act 1936, which was to be completed by 30 June 2013. On 8 November 2013 the Assistant Treasurer announced an extension to these terms of reference and extended its reporting date to 31 October 2014.
The Board of Taxation is currently undertaking a post-implementation review of Division 7A of Part III of the Income Tax Assessment Act 1936 (Division 7A).
Division 7A contains integrity provisions designed to prevent shareholders (or their associates) of private companies from inappropriately accessing the profits of those companies in the form of payments, loans or debt forgiveness transactions.
Division 7A is part of a broader tax framework in which private business structures operate. Within this context the Board should:
The Board’s report should take account of the revenue implications of various options and, where appropriate, suggest approaches that minimise any revenue cost.
In undertaking this review the Board should seek public submissions and consult widely.
The Board should report to the Government by 31 October 2014.
In undertaking this review the Board proposes to consult widely and provide all stakeholders with the opportunity to participate in the review.
The Board has appointed a working group of its members comprising Mr Curt Rendall (Chair of the working group), Mr Keith James and Ms Elizabeth Jameson to oversee this review.
On 20 December 2012 the Board of Taxation released its Discussion Paper on the post-implementation review of Division 7A of Part III of the Income Tax Assessment Act 1936.
The then Chair of the Board of Taxation, Mr Chris Jordan AO, announced the release of the Discussion Paper [PDF 591KB][DOCX 287KB] via a press release. The Board developed this Discussion Paper to invite submissions and facilitate stakeholder consultation on the issues raised. The Board received 19 submissions in response to the discussion paper. Of these submissions, 3 were confidential.
Further information on this review can be obtained from Louise Lucas (02 6263 4346) at the Board of Taxation Secretariat.