Tax consolidation measures introduced into Parliament - 22 February 2018

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Tax consolidation measures introduced into Parliament - 22 February 2018

Tax insights

On 15 February 2018, the legislation containing the measures to improve the operation of certain entry and exit tax cost setting rules in the tax consolidation regime was finally introduced into Parliament as the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018 (the Bill).

The Bill addresses the same six issues consulted upon in the 2017 Exposure Draft legislation (the 2017 ED) and draft Explanatory Memorandum (the 2017 EM) released on 11 September 2017, being:

  • Changes in respect of deductible liabilities
  • Changes in respect of deferred tax liabilities
  • Certain transfers by a foreign resident of membership interests in a joining entity (‘the churning rule’)
  • Clarifying the interaction with the TOFA rules in respect of intra-group financial arrangements
  • Clarifying the treatment of intra-group liabilities owed to a leaving entity in the context of the exit tax cost setting rules; and 
  • Addressing issues when an entity holding securitised assets joins or leaves a consolidated group.

Published: February 2018

Tax consolidation measures introduced into Parliament - 22 February 2018
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