Australian bill closing tax consolidation regime loopholes passes Parliament

The Australian government today announced the passage through Parliament of the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018.

The bill would close loopholes in the tax consolidation regime, putting an end to the practice of “churning” entities between related parties. The law amends tax cost setting rules that apply when an entity leaves or joins a tax consolidated group.

This bill also improves the integrity and operation of the consolidation regime in other ways, including by changing the tax treatment of liabilities which give rise to a future tax deduction and by preventing double tax deductions from arising when value is shifted across entities, the government said.