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Submissions to Treasury - 2008
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26 November 2008 - Review of the UK treaty 
 
The Institute has lodged a submission with the treaties unit of the Treasury on the review of the 2003 tax treaty between Australia and the United Kingdom. These upcoming talks stem from an undertaking made by both Governments in the Notes to the Convention to agree that at intervals of not more than 5 years, they will review the terms, operation and application of the Convention to ensure that it continues to meet its purpose. 
 
17 October 2008 - Submission on latest TOFA exposure draft legislation 
 
The Institute has lodged a submission with Treasury on the Exposure Draft of Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 (ED Bill) and accompanying Explanatory Material released by the Assistant Treasurer on 1 October. Key submission points include the following:

  • the accruals method is excessively complex and needs financial statements short cuts  
  • additional considerations are required in Division 230 to address emerging issues, such as the proposed carbon emissions trading scheme, and the appropriateness of the exclusion for certain “earnout” arrangements  
  • an alternative framework should be adopted by Treasury, instead of applying the entry history rule to Division 230 liabilities 
  • additional clarification is required as to the notion of a “report [that] properly reflects your affairs” used in the ED Bill.
 
26 August 2008 - Further submission on revised thin capitalisation draft legislation  
 
The Institute has lodged a further submission on the revised draft legislation and the draft explanatory memorandum to amend the thin capitalisation regime to accommodate the departure from Australian equivalents to International Financial Reporting Standards (AIFRS). This follows an earlier submission on 5 August (see entry below). 
 
As stated in our submission, the Institute’s most significant concern was in relation to the irrevocable nature of the choice to revalue assets despite the absence of an active market. In this regard, we understand that Treasury acknowledged this concern and that this will be changed in the final version of the legislation. 
 
14 August 2008 - Submission on draft legislation to reform Division 6C 
 
The Institute has lodged a submission with Treasury on thedraft legislation to reform Division 6C of the Income Tax Assessment Act 1936. The draft legislation is intended to:
  • clarify the scope and meaning of investment in land for the purpose of deriving rent
    •  
  • introduce a 25% safe harbour allowance for non-rental, non trading income from investments in land
    •  
  • expand the range of financial instruments that a managed fund may invest in or trade, and
    •  
  • provide a further 2% safe harbour allowance at the whole of trust level for non-trading income.
The Institute has raised a number of concerns in its submission and has also restated its view that more wide ranging reforms to Division 6C are required. It is anticipated that these will be dealt with by the Board of Taxation as part of its review of the tax arrangements applicable to managed funds.  
 
5 August 2008 - Submission - Thin capitalisation: amendments to the application of accounting standards  
 
The Institute has lodged a submission with Treasury on the draft legislation to amend the thin capitalisation regime to accommodate the departure from Australian equivalents to International Financial Reporting Standards (AIFRS) in a number of instances. In particular, the draft legislation aims to exclude from thin capitalisation calculations:
  • assets and liabilities in respect of post employment benefits payable pursuant to defined benefit plan and  
  • deferred tax assets and liabilities.
The draft legislation also proposes to allow entities to revalue one or more of its intangible assets where this would be prevented under AASB 138 (Intangible assets) due to the absence of an active market.  
 
14 July 2008 - Joint submission on Treasury Discussion Paper “Consolidation and TOFA Interactions”  
 
The Institute, in conjunction with the Taxation Institute of Australia, has lodged a joint submission on the Treasury Discussion Paper of 23 June 2008 entitled “Consolidation and TOFA Interactions”. Key comments included that the proposed Division 230 rules should broadly align with the existing consolidation tax cost setting rules (not vice versa) and that there is no sound policy reason for excluding deferred tax liabilities (DTLs) on financial arrangements from the consolidation tax cost setting process.  
 
30 June 2008- Joint submission on the revised Exposure Draft Tax Agents Services Legislation 
 
The Institute, in conjunction with CPA Australia and NIA, has lodged a joint submission on the revised Exposure Draft Tax Agent Services Legislation and explanatory material. The covering letter and detailed submission are available via these links. 
 
In the submission, the joint accounting bodies acknowledge the numerous amendments and improvements to the policy and drafting evident in the revised legislation and explanatory material. 
 
16 May 2008 - Submission on distributions of certain managed investment trust income to foreign residents  
 
The Institute has lodged a short submission on the draft legislation to implement a new final withholding tax system for certain distributions from managed investment trusts to foreign residents either directly or through other entities. The draft legislation was released for public consultation following the budget. An abstract of the measures contained in the draft legislation, together with the draft legislation itself, are available on Treasury's website. 
 
26 March 2008 - Submission on Australia's treaty programme/policy and renegotiation of the tax treaty with New Zealand 
 
The Institute has lodged a submission with the tax treaties unit of Treasury on Australia's treaty programme/policy and renegotiation of the tax treaty with New Zealand. The submission is in response to the press release of 25 January by the Assistant Treasurer where he invited public comments and submissions. 
 
19 March 2008 - Consultation Paper on Potential changes to the eligible investment rules for managed funds 
 
On 19 March the Institute lodged a submission on Treasury's Industry Consultation Paper on "Potential changes to the eligible investment rules for managed funds, including property trusts". The Consultation Paper deals with possible interim changes to the trading trust rules pending a comprehensive review by the Board of Taxation of the taxation arrangements that apply to managed funds 
 
7 February - Institute lodges submission on consolidation and CGT rollovers 
 
The Institute has lodged a substantial submission with the Treasury in response to the Assistant Treasurer's media release of 11 January 2008 following the former Government's announcements of October 2007 in relation to modifications to the tax consolidation regime to prevent "inappropriate uplifts" in the tax costs of a joining entity's assets following certain CGT rollovers. More >