The Business Council of Australia today welcomed the release by the Minister for Revenue, Senator Helen Coonan, of the draft legislation relating to the new consolidated tax regime for 100 per cent owned groups.
The Chief Executive of the BCA, Ms Katie Lahey, said:
- The consolidated tax regime represents a major change in taxation with the potential to better align the tax system with commercial reality and to avoid the duplication of gains and losses within wholly-owned groups.
- The preparation of the draft legislation has been the subject of a comprehensive consultation process involving leading private sector tax experts. This represents a substantial improvement over previous practice and should result in a smoother implementation of the new system.
- The release of the legislation in draft form provides further opportunities for input from taxpayers, and this too is a major improvement over traditional practice.
- The draft legislation will require a close examination before detailed comment can be made. Inevitably, some important questions remain unanswered. These include the treatment of unfranked dividends paid into consolidated groups from non-wholly owned entities, and the need for a period of continued access to existing grouping provisions to allow businesses, particularly small and medium sized businesses, to ease the burden of transition to the new arrangements.
The Business Council of Australia is committed to working closely with the Government to finalise these matters and to further refine the consolidation regime.