Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
General outline and financial impact
This Bill amends the Income Tax Assessment Act 1997 (1997 Act) to provide a tax deduction for amounts paid to subscribe for shares in a Film Licensed Investment Company (FLIC) during the period the FLIC is licensed to raise share capital which will qualify for the deduction.
Under the Film Licensed Investment Company Bill 1998, a FLIC may be so licensed. That Bill contains provisions which establish a scheme to encourage investment in the Australian film industry through the tax concession for FLIC shareholders provided their share capital is invested by the FLIC in qualifying Australian films.
This legislative package is intended, as a pilot measure, to provide assistance to the Australian film production industry in addition to that currently provided through Division 10BA of the Income Tax Assessment Act 1936 (1936 Act).
Date of effect: Deductions will be available for eligible FLIC shareholders for the income years ending 30 June 1999 and 30 June 2000.
Proposal announced: The proposal was announced by the Minister for Communication, the Information Economy and the Arts on 15 November 1997.
Financial impact: The revenue cost of the FLIC pilot scheme is capped by the limited amount of concessional share capital that may be raised by FLICs - a total of $40 million over the two income years 1998-99 and 1999-2000.
Compliance cost impact: A minimal cost of compliance is expected. Compliance for FLIC investors may be slightly easier than for those who seek deductions under Division 10BA on a film-by-film basis.
Regulation Impact Statement: A regulation impact statement relating to the FLIC tax concession pilot scheme is contained in the Explanatory Memorandum to the Film Licensed Investment Company Bill 1998. Chapter 1
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