Compliance program 2011-12

Inappropriate outcomes involving consolidation

The consolidation laws are a significant feature of Australia's corporate income tax system. Risks include unintended or inappropriate outcomes where there are complex interactions between the consolidation provisions, other parts of the tax law and external regulatory frameworks. While this is often first seen as a change in the tax cost of assets on entry or exit from consolidated groups, the results can include reductions in capital gains tax and/or increases in losses or deductions under the capital allowance rules.

We will initiate reviews and audits on risks relating to consolidation, mergers and acquisitions and other transactions or business activities. Of particular concern are arrangements where the tax outcomes do not reflect the economic substance of the arrangement.

The rights to future income and residual cost setting rules have been the subject of review by the Board of Taxation. We will continue to monitor developments in relation to these laws and undertake activities to assist, and ensure, compliance with those laws.

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