In a recent speech in Sydney, the Assistant Treasurer spoke on a range of tax matters. Points of note made by Mr Bradbury included:
- The Government considers that amendments are necessary to ensure that Pt IVA “operates as it was always intended to operate” ie “to counter arrangements carried out in an artificial or contrived way to avoid tax”.
- The Government’s focus with the Pt IVA reforms is on lawful conduct carried out in an artificial and contrived way to prevent a liability to tax from arising that would have arisen if the form of the transaction had matched its substance.
- Broadly speaking, the Government thinks the dominant purpose test in Pt IVA is working effectively to distinguish tax avoidance from legitimate planning.
- The Government considers that a problem exists with the way in which Pt IVA goes about identifying and measuring the “tax advantage” secured by an arrangement entered into for the purpose of avoiding tax. That is, how it identifies and measures the “tax benefit”.
- In a transfer pricing context, the Government is “giving serious consideration” to introducing a time limit on the Commissioner’s power to amend assessments.
[LTN 197, 11/10]