Considering blackholes and rights on a case-by-case basis
Genuine examples of blackholes will be considered having regard to the following factors:
- recognition of the expenditure providing more appropriate tax outcomes in terms of economic efficiency and taxation equity;
- risks to tax law integrity in recognising the blackhole; and
- the Government's overall fiscal strategy.
Submissions should also be made on examples of rights that are considered to be taxed inappropriately under the capital gains tax (CGT) provisions.
Information requirements for blackholes and rights
Interested parties are invited to make a submission for case-by-case consideration of an amendment to the tax treatment of specific blackholes or rights.
Submissions seeking a tax law amendment for blackholes or rights should include the following information:
- a statement on whether the expenditure is incurred while carrying on a business (in the case of blackholes);
- details of the expenditure or right ( nature, size, timing, etc (to enable revenue impacts to be assessed);
- a statement on whether the expenditure or right is recognised in any way in the existing tax law and if so how; and
- an outline of what the taxpayer thinks the appropriate treatment should be, having regard to the economic characteristics of the expenditure or right ( for example, capital, revenue, wasting over time or other.
Developing a legislative solution
The framework for a legislative solution that is being considered for blackholes will be consistent with the approach that is being adopted for the case-by-case ( that is:
- the provision will only apply if the expenditure is business related;
- the provision will only apply if the expenditure is not recognised through the operation of other provisions of the tax law; and
- the treatment will be dependent upon the economic characteristics of the expenditure.
Interested parties are also invited to make submissions to the Government on the generic treatment of blackholes, based on the above framework, and rights.
Taxpayers or other interested parties wishing to make a submission on blackholes or rights are invited to write to:
The Manager, Business Tax Base Unit
Business Income Division
Canberra ACT 2600
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