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Treasury Laws Amendment (2020 Measures No. 1) Bill 2020 – Second Reading
This bill contains two measures that maintain the integrity and efficiency of Australia’s tax system.
Schedule 1to the bill amends the Income Tax Assessment Act 1997 to extend the definition of a significant global entity to include members of large business groups headed by proprietary companies, trusts, partnerships, investment entities and individuals.
SGE is a concept to define, generally speaking, a group of entities under the control of a large multinational. Such groups are a key focus for tax authorities to prevent profit shifting.
Many of the significant measures undertaken by this government to tackle multinational tax avoidance rely on this SGE definition. These include the multilateral anti-avoidance law, the diverted profits tax and penalties applying to false or misleading statements, late lodgement of documents or tax schemes. SGEs are also required to prepare and submit general-purpose financial statements to the Australian Taxation Office.
Extending the definition therefore will ensure that multinationals cannot structure to avoid our multinational tax integrity rules, which remain amongst the strongest in the world.
Schedule 2 to the bill makes permanent the current temporary capital gains tax relief for merging superannuation funds, which is otherwise due to expire on 1 July this year. The current arrangements remove unnecessary impediments that would otherwise apply to mergers by allowing super funds to transfer revenue and capital losses to a new merged fund and to defer taxation consequences on gains and losses from revenue and capital assets.
Extending the relief will give fund trustees certainty when planning merger activity and will provide wider benefits to fund members and the superannuation system as a whole through increased fund scale and efficiencies.
This measure implements recommendation 21 of the Productivity Commission’s final report, titled Superannuation: assessing efficiency and competitiveness.
Full details of the measures included in this bill are contained in the explanatory memorandum.
Please click here for a PDF copy of the Hansard extract for this speech.