Tax and super
Making our tax system more sustainable so we can cover the Government’s responsibilities for the next generation
Simpler tax rules, cutting red tape
Simpler tax rules support businesses to grow and get on with what they do best
Tax laws can be complex and, at times, do not work as intended. It is important that the meaning of the law is clear so that more time can be spent building a business rather than navigating compliance with complex tax laws.
To streamline our tax system, the Government will introduce designated Regulatory Reform Bills into the Parliament.
Stakeholders will be encouraged to suggest matters to be included in these Bills, including through the new Board of Taxation Sounding Board, accessible at taxboard.gov.au.
The Government will also support the ATO to produce public guidelines on the meaning of new tax laws in a timely way. The guidelines will not have the same formal legal status as legislation, but will help taxpayers understand how to comply with the new law.
Previously, advice and guidance was published some months after legislation was enacted, which could leave taxpayers confused about how the legislation would be applied.
In future, guidelines will be publicly released as legislation is introduced into or is being considered by Parliament.
Targeted amendments to simplify tax law
The Government will make it easier to comply with currently complex integrity rules to ensure appropriate tax is paid on funds extracted from private companies, including by providing a self-correction mechanism for inadvertent breaches and creating new safe harbour rules.
Consolidation integrity package
The Government will simplify, strengthen and better target the consolidation integrity package, originally announced in the 2013-14 Budget. The changes will provide increased certainty for wholly-owned groups that lodge as a single entity (‘consolidated taxpayers’).
The package will ensure consolidated taxpayers cannot obtain a double tax benefit or other tax advantages when recognising certain liabilities. It will also align the tax treatment of securitised assets for consolidated groups with that for consolidated financial institutions.
Taxation of financial arrangements
The taxation of financial arrangements regime is complex and applied more widely than is necessary. The Government will improve this regime with a simpler, more targeted system. The rules will apply to a much smaller group of taxpayers, relieving many taxpayers from undertaking complex calculations.
This will cut red tape and associated administrative costs for those businesses that are no longer caught by the framework.