Functional currency rules - extending the range of entities that can use a functional currency
On 14 December 2014, the then Assistant Treasurer announced that the government will proceed with amendments to the functional currency rules as announced by the previous government in the 2011-12 Budget.
Amendments will be made to Subdivision 960-D of the Income Tax Assessment Act 1997 to extend the list of entities that may elect to use their functional currency to include certain partnerships and trusts. This will reduce compliance costs for certain partnerships and trusts by allowing the option to elect to use their functional currency for Australian tax purposes.
The measure will apply to tax returns lodged after the date of Royal Assent of the amending legislation.
Legislation and supporting material
This change is not yet law and is subject to the normal parliamentary process.
This measure is intended to extend the range of entities that can make a functional currency election to include partnerships and trusts.