The government has amended the income tax law affecting consolidated groups as part of its continued commitment to maintaining the integrity, equity and fairness of the tax system.
The changes relate to the way a consolidated group can deduct the costs allocated to some assets following a corporate acquisition.
The changes implement the recommendations of the Board of Taxation for future consolidations and seek to ensure companies inside consolidated groups do not receive tax benefits that companies outside of consolidated groups cannot receive.
Associated amendments have also been made to the application of interest on overpayments, administrative penalties and shortfall interest in certain circumstances with respect to the consolidation amendments.
For more information, refer to:
The following legislation received royal assent on 29 June 2012:
The following legislation received royal assent on 28 September 2012:
The ATO accepted tax returns as lodged during the period up until enactment of the legislation. Past-year assessments are subject to review under the enacted amendments.
From 29 June 2012, the date of royal assent, each taxpayer will, where applicable, need to review their positions back to the 2002-03 income year.
Treatment of cases on hand
Where taxpayers lodge or have lodged a ruling request, objection or amendment request, they will be contacted by the ATO to discuss their particular circumstances and how certainty is best provided.
We will work with taxpayers to understand the basis of any claim and ensure all relevant facts are available to progress these matters.
Exposure draft legislation and explanatory material was released on 18 April 2012.
Last Modified: Wednesday, 7 November 2012