Post‑implementation review into certain aspects of the consolidation regime
On 9 December 2009, the Board of Taxation released its discussion paper on the post‑implementation review into certain aspects of the consolidation regime. The Chairman of the Board of Taxation announced the release of the discussion paper via a press release. The Board has developed this discussion paper to facilitate stakeholder consultation.
Submissions
The Board welcomes submissions on issues raised in the discussion paper. The closing date for submissions is 26 February 2010. Submissions may be sent to:
By email: taxboard@treasury.gov.au
By facsimile: 02 6263 4471
By post:
Post‑implementation review into certain aspects of the consolidation regime
The Board of Taxation
c/- The Treasury
Langton Crescent
CANBERRA ACT 2600
Stakeholders making submissions should note that Board members and members of the Board's review team will have full access to all submissions to this review. All information (including name and contact details) contained in submissions may be made available to the public on the Board of Taxation website unless it is indicated that all or part of the submission is to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like all or part of their submission to remain in confidence should provide this information marked as such in a separate attachment. A request for a submission to be made available under the Freedom of Information Act 1982 (Commonwealth) that is marked 'confidential' will be determined in accordance with that Act.
Consultation meetings
To assist in the Review process, the Board conducted consultation meetings in February 2010. Consultation meetings were held on 1 February 2010 in Sydney and 3 February 2010 in Melbourne. The consultation meetings were attended by representatives from taxation professional bodies, major law and accounting firms, various major corporations and business associations.
Background
On 3 June 2009, the then Assistant Treasurer announced that the Board would undertake a post‑implementation review of certain aspects of the consolidation regime. The aspects of the consolidation regime that will be subject to the review are:
- The operation of the single entity rule;
- The operation of the entry history rule in acquisition cases; and
- The interaction between the consolidation provisions and other parts of the income tax law.
The consolidation regime allows a wholly-owned corporate group to be treated as a single entity for income tax purposes.
The objective of the consolidation regime was to promote business efficiency, improve the integrity of the Australian tax system and reduce ongoing income tax compliance costs for wholly-owned company groups that choose to consolidate.
The consolidation regime was enacted in four major stages during 2002 and 2003. A number of refinements have been made to the regime since then and it is timely to take stock of whether, having regard to its objectives, key elements of the consolidation regime are operating as intended.
The Board's intention in undertaking this post-implementation review is not to reopen debates about the merits of the policy intent of the regime. The intention instead is to gauge how effective the legislation has been in delivering the policy intent.
The Board has appointed a working group of its members comprising Mr Richard Warburton AO (Chairman) and Mr Keith James to oversee this review.Terms of Reference
The Board has established criteria against which it will evaluate legislation selected for a post‑implementation review. The criteria include the extent to which the legislation:
- gives effect to the Government's policy intent, with compliance and administration costs commensurate with those foreshadowed in the Regulation Impact Statement for the measure;
- is expressed in a clear, simple, comprehensible and workable manner;
- avoids unintended consequences of a substantive nature;
- takes account of actual taxpayer circumstances and commercial practices;
- is consistent with other tax legislation; and
- provides certainty.
Reference Documents
Reference documents relating to this post‑implementation review are as listed below:
- New Business Tax System (Consolidation) Bill 2002 Explanatory Material [PDF 643KB]
- House of Representatives Second Reading Speech
- An extract from the Explanatory Memorandum [PDF 132 KB]
- Div 700-701 of the Income Tax Assessment Act 1997 [PDF 120KB]
Further information on this review can be obtained from Vernon Joice (02 6263 4369) and Jodi Moore (02 6263 3246) at the Board of Taxation Secretariat or email taxboard@treasury.gov.au.
