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Proposed reforms to tax losses recoupment regime

January 2012

The Treasurer has released a consultation paper on potential improvements to the tax treatment of losses. The consultation paper considers options available to improve the operation of the tax loss rules and promote innovation and investment in Australia.

The paper considers the removal of the company continuity of ownership and same business tests and substituting this with a different type of integrity test.

The paper comments that current loss recoupment tests operate in such a way that innovation and risk-taking in business is discouraged due to the inability to claim losses.

Other measures which are also being considered include the potential for losses incurred to give rise to a refundable tax offset and a reduction in the number of years (currently 5 years) over which deductions under the existing blackhole provisions can be claimed.

The Treasury is seeking submissions on these rules by 3 February 2012.

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Last updated January 2012. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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