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The Commonwealth Government introduced consolidation to reduce compliance costs for business, remove impediments to the most efficient business structures and improve the integrity of the tax system. Consolidation allows wholly-owned corporate groups to operate as a single entity for income tax purposes from 1 July 2002.
Consolidation pathway
There is a pathway of key steps in choosing, forming and operating as a consolidated group.
Consolidation reference manual
This reference manual provides guidance on consolidation for income tax purposes. The last and final updates incorporated into this reference manual were current at 15 July 2011.
Consolidation valuation shortcuts
Businesses can use valuation shortcuts to determine the market value of certain assets for consolidation purposes.
Consolidation: income tax returns and consolidation
This document provides information for head companies and subsidiary members on lodging income tax returns. It includes information on the ATO approach to penalties and interest when returns need to be amended.
Costs and benefits
The consolidation process does have costs, but there can be continued cost benefits for post-cossolidation.
There are certain qualities that must exist in a business structure for it to be eligible for consolidation.
Notification forms and instructions
Instructions to help taxpayers complete the relevant paper form or online or practitioner lodgment service (PLS) screen when notifying the ATO of consolidation.
PAYG instalments for consolidated groups
The head company of a consolidated group pays PAYG instalments for the group and its members as one entity.
Taxing wholly-owned corporate groups as single entities
Wholly-owned corporate groups may have the option of consolidating for income tax if they want all of their entities in their group to be taxed together.