The ABA agrees with the Working Group that Australia should have an ambition to reduce its corporate tax rate over the medium term.
A lower rate would improve productivity, drive GDP growth and should lead to increased tax collections for the Government. And as banks are linked to Australia’s economic performance – GDP improvements could also benefit banks because businesses and individuals should increase their demand for banks’ products and services.
The ABA would like to see a change to the Income Tax Assessment Act 1997 (ITAA) in order to mitigate adverse commercial consequences for Australian ADIs and non-operating holding companies (NOHCs) and other regulated financial institutions, from 1 January 2013, as a result of changes to prudential capital standards.
In this submission, the ABA provides comments on the review and potential prospective rewrite of Australia’s transfer pricing provisions which are contained in Division 13 of the Income Tax Assessment Act 1936 (‘Division 13’) and the retrospective legislative changes which were announced by the Assistant Treasurer in the Media Release No 145.