Explanatory Memorandum
(Circulated by authority of the Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP)General outline and financial impact
Access to losses
Schedule 1 to the Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) and the Income Tax Assessment Act 1936 (ITAA 1936) to supplement the same business test with a more flexible similar business test. The similar business test improves access to losses for companies (and certain trusts) that have changed ownership and allows those companies and trusts to seek out opportunities to innovate and grow without losing access to losses.
Date of effect: The amendments apply to income years starting on or after 1 July 2015.
Proposal announced: The proposal was announced on 7 December 2015 as part of the Government's National Innovation and Science Agenda.
Financial impact: The amendments will have an unquantifiable financial impact.
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - paragraphs 1.59 to 1.62.
Compliance cost impact: The similar business test has an estimated compliance cost impact of $5.6 million per year. This cost has been fully offset within the portfolio.
Intangible asset depreciation
Schedule 2 of this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to provide taxpayers with the choice to self-assess the effective life of certain intangible depreciating assets they start to hold on or after 1 July 2016, rather than using the statutory effective life currently specified in the law.
Date of effect: The amendments apply to certain intangible depreciating assets that start to be held on or after 1 July 2016.
Proposal announced: The amendments are part of the Government's National Innovation and Science Agenda announced on 7 December 2015.
Financial impact: This measure has the following revenue implications:
| 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 |
| - | - | - | - $20.0 m | - $60.0 m |
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.32 to 2.36.
Compliance cost impact: Minimal.
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