Tax Reform Working Group Summary

G100 represents CFOs in Australia with the mission of leading the national debate on critical financial and business issues which impact on business performance, regulatory oversight and the nation’s competitiveness. The Tax Reform Working Group (TRWG) supports this mission by providing thought leadership on tax reform matters of importance to the G100 members. 

The G100 TRWG meetings in 2020 will be scheduled a few weeks before the ATO LBSG meetings, so any issues that need to be brought up at the ATO meetings will be prepared. The scheduled ATO LBSG meetings for 2020 are: 19 March 2020 – Sydney; 23 June 2020 – Melbourne; 24 September 2020 – Sydney

A summary of the discussion topics with key messages from the ATO LBSG July Meeting can be read here:

There are two inquiries recently referred to the Parliament that are of interest to the G100 TRWG. In the following weeks Marc Lewis, Head of the G100 TRWG and Vice President Tax at Woodside Energy will test interest into possibly doing submissions on these topics.

Inquiry into the Tax Treatment of Employee Share Schemes

  • The referral was made by the Treasurer, the Hon Josh Frydenberg MP, to the Standing Committee on Tax and Revenue re aforementioned.
  • Committee will inquire into the effectiveness of the 2015 Employee Share Scheme (ESS) changes and examine:
    • how effective the changes in 2015 have been in their goal of bolstering entrepreneurship in Australia and supporting start-up companies;
    • the costs and benefits of these concessional taxation treatments, and deferred taxing points for options, to the broader community;
    • whether the current tax treatment of ESS remains relevant to start-up companies and whether any changes are appropriate to ensure the taxation treatment remains relevant;
    • how companies currently structure their ESS arrangements and how taxation treatment affects these decisions; and
    • the challenges faced by companies in setting up an ESS arrangement and how the standard documents by the Australian Taxation Office, and introduced in 2015, assist this process and whether additional improvements should be made.
  • Due to report by Thursday, 19 March 2020.

Inquiry into the Development of the Australian Corporate Bond Market

  • The referral was made by the Treasurer, the Hon Josh Frydenberg MP, to the Standing Committee on Tax and Revenue re aforementioned.
  • Australian companies may issue bonds as a means of raising debt finance. Over the last decade, Australian Governments have made amendments to the regulatory regime for corporate debt to facilitate a deeper and more active retail, corporate bond market. However, the Australian retail bond market remains small in comparison to similar countries and, in terms of the amount of debt raised, Australian-based businesses make greater use of offshore bond markets.
  • The Inquiry will examine:
    • the tax treatment of corporate bonds for both issuers and investors to determine whether there are any impediments in the tax system to the issue of corporate bonds compared to other forms of debt financing for business;
    • related impediments within the Corporations Act to the further development of the corporate bond market, including how they interact with the tax system; and
    • comparable policy settings in other jurisdictions, with a focus on those jurisdictions that are significant sources of debt finance for companies operating in Australia.
  • Due to report by Thursday, 19 March 2020.