Compliance program 2011-12

Tax and capital losses

With the increase in losses incurred and carried forward during the recent global economic downturn, and the removal of foreign loss quarantining, there is a heightened compliance risk associated with losses.

We will be testing claims for losses to check for those that do not reflect genuine commercial arrangements, lack economic substance and do not meet the continuity-of-ownership test or the same-business test.

We will also be reviewing the large market financial services industry given the $47 billion of capital losses carried forward. Trusts (in particular managed investment trusts), superannuation funds and life insurance companies will be the subject of a specific focus to ensure capital losses incurred are genuine and used in accordance with the legislation.

Sections within Large businesses

• Good tax corporate governance
• Working together
• Obtaining certainty
• Cooperative compliance
• Corporate restructures mergers and acquisitions
• Foreign residents
• Inappropriate outcomes involving consolidation
• Profit shifting
• Private equity - exiting Australia
• GST and international and cross-border transactions
• Non-resident withholding tax
• Stapled group financing
• Taxation of financial arrangements (TOFA)
• Financial supplies and GST
• Foreign partnerships
• Black-hole expenditure
• Exploration expenditure
• Tax and capital losses
• Research and development claims
• Property transactions and GST
• Superannuation funds
• Alternative fuels