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Australia’s re think tax discussion paper
The Australian government has heralded its 'Re:think Tax Discussion Paper' as 'opening the conversation' on tax reform. Taxand Australia discusses the paper.
Businesses that operate or invest in Australia should be alert to some of the key areas targeted by the Paper and keep a close watch on the following four issues.
Challenges to the dividend imputation system
Australia’s dividend imputation system allows Australian shareholders receiving dividends from Australian companies a credit representing the tax paid by companies on their underlying profits.
Lowering of corporate tax rate
Lowering company tax is strongly supported by the Paper. It suggests Australia’s tax system relies too heavily on corporate income tax at a time when the global trend has been to reduce corporate tax rates.
Treatment of inbound and outbound investments
The tax treatment of inbound and outbound investments is an area identified for potential reform.
Review of GST
One of the more contentious issues in the Paper, and one that has generated much media attention, is the proposal to review the GST.
The Paper reiterates the government’s position that it will only support changes to the GST if "there is a broad political consensus for change”.
Quality tax advice, globally
Considering the upcoming completion of the BEPS project and the broader media attention drawn to tax matters recently, which seems to be channeling a sentiment that Australia should get its share of the international tax pie, it seems certain that tax reform will be on the agenda between now and the next election.