ARTICLE · 30 JANUARY 2012

Tax consolidation – fundamental retrospective and prospective changes announced

Greenwoods & Freehills

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A range of critically important changes are to be made the tax consolidation regime, some with retrospective application.

AustraliaTax

Richard Hendriks

On 25 November 2011 the Assistant Treasurer issued a press release announcing a range of critically important changes to the tax consolidation regime, some with retrospective application. An associated Board of Taxation (BoT) report was simultaneously released.

The significance of this announcement from revenue, policy and technical perspectives cannot be understated.

1 Outline

As foreshadowed in the Assistant Treasurer's initial 30 March 2011 press release, consolidation legislative amendments enacted in June 2010 have subsequently been determined to have a revenue cost far in excess of expectations. Therefore, the amendments announced in this most recent press release primarily seek to significantly reduce the immediate cost of the June 2010 measures, although revenue impact projections are not contained in this release. However, from a goforward perspective it is also proposed to re-calibrate tax consolidation outcomes – particularly in relation to corporate

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