Tag Archives: tax losses

The new similar business test – a golden opportunity for businesses or a playground for lawyers

The Government has recently introduced draft legislation (Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 (Bill)), which proposes to amend the Income Tax Assessment Act 1997 and Income Tax Assessment Act 1936 to create a new framework for determining whether a business can carry forward and use tax losses and bad debts that it incurred prior to a change of control or ownership of that business.

The proposed legislation introduces a new and more flexible ‘similar business test’ to supplement the existing ‘same business test’. Broadly, the similar business test gives companies (and certain trusts) more scope to innovate and expand their business without losing their tax losses.

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