Tax and Superannuation Laws Amendment

Last week saw the introduction into Parliament of the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014.
The Bill contains two noteworthy measures, being the integrity measure targeted at arrangements where taxpayers obtain additional franking credits through ‘dividend washing’ arrangements and the ‘taxpayer protection’ measure promised by the Government to protect taxpayers who complied with certain announced un-enacted measures in anticipation of their enactment which the current Government has decided not to proceed with.
The purpose of the integrity measure is to limit the ability of taxpayers to obtain a tax benefit, in the form of multiple franking credits, from arrangements involving ‘dividend washing’. We also remind members of the compliance action the ATO is taking in this space concurrently focused on these types of arrangements. Please refer to TaxVine No. 10 for further information. 
The ‘taxpayer protection’ measure is a one-off measure and only covers certain announced measures that are not proceeding which are listed within the provision itself. Measures included relate to certain changes to CGT, simplifying the imputation system and certain proposed changes to the consolidation regime which are not going ahead. Members are advised to check which measures are covered by this protection mechanism that might impact their clients.
In other news, the States and Territories are releasing their 2014-15 Budgets throughout May and June. This week saw the release of the 2014-15 ACT Budget which sees the ACT once again showing initiative in taking independent steps to reform inefficient State taxes in its own tax base, such as cutting the conveyance duty rate by a quarter of a per cent for land transfers over the highest threshold amount and removing insurance taxes.
We have also put our submissions up to the Board of Taxation in relation to the post-implementation review of Division 7A, tax system impediments facing small business and the review of the debt/equity rules. We look forward to seeing the results of these reviews, particularly in relation to the review impacting small businesses as we are keen to see what improvements the Board of Taxation recommends be made to assist small businesses. Our submissions can be found on our website at these links:
Please see below for other activities. As always, members are welcome to contact us at Tax Policy.
Robert Jeremenko

Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.


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