Long-awaited Tax consolidation measures released – 15 September 2017


Long-awaited Tax consolidation measures released – 15 September 2017

Tax insights

On 11 September 2017, the long-awaited Exposure Draft legislation and a draft explanatory memorandum on improving the operation of the tax cost setting rules in tax consolidation was released for public consultation.

The six issues addressed being:

  • Preventing a double benefit from arising in relation to deductible liabilities when an entity joins a consolidated group;
  • Ensuring that deferred tax liabilities are disregarded;
  • Removing anomalies that arise when an entity holding securitised assets joins or leaves a consolidated group;
  • Preventing unintended benefits arising when foreign residents cease to hold membership interests in a joining entity in certain circumstances;
  • Clarifying the outcomes that arise when an entity holding financial arrangements leaves a consolidated group; and
  • Clarifying the treatment of intra-group liabilities when an entity leaves a consolidated group.

These measures address the concerns raised in the Board of Taxation’s 2013 post-implementation review of the tax consolidation rules.

Long-awaited Tax consolidation measures released – 15 September 2017
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