This submission was originally published on 6 October 2017.
BDO welcomes the opportunity to provide feedback in response to Treasury Laws Amendment (2017 Measures No. 9) Bill 2017: Consolidation (‘Exposure Draft’), released by Treasury on 11 September 2017, which proposes the introduction of various changes to the tax consolidation measures in Part 3-90 of the Income Tax Assessment Act 1997 (‘ITAA 1997’).
This BDO submission identifies the following issues as outlined in the Appendix:
- The churning measure applies to retain the tax cost of a joining entity’s assets even where part of the participation interests in the joining entity are acquired from outside the consolidated group, which could result in double taxation for the consolidated group;
- The churning measure does not take account of capital gains of CFC’s that are included in the attributed income of the Australian parent companies, which could result in double taxation for the consolidated group.