Groups may use an ITXSA for other purposes, provided these do not affect the reasonableness of the allocation under the ITXSA or prejudice the rights of the Commissioner to recover the debt. For instance, the following internal arrangements are not relevant to determining whether there has been a 'reasonable allocation', even if they are included in the ITXSA:
- financing of ongoing tax liabilities (even if this requires different contributions from group members than would be ascertained under the 'reasonable allocation' clauses)
- the treatment of refunds received
- the requirements for balancing adjustments between the ITXSA liabilities and other tax liabilities as shown in entities' accounts.
It is anticipated that a group may choose to incorporate the terms of the tax funding or other private contractual arrangements in a separate agreement. Again, these agreements are generally of no concern to the Commissioner, subject to the 'prejudice recovery' provisions in the legislation – that is, while a tax funding or other arrangement may have no bearing on the determination of whether there has been a 'reasonable allocation', if it is designed to frustrate the ability of a member to pay its contribution amount, it would be seen to 'prejudice recovery' under paragraph 444-90(1C)(b) of Schedule 1 to the TAA.
See also