The Closely Held Companies bill was reported back last Friday from the Finance and Expenditure Committee.
As you will recall the Bill proposes several changes in an attempt to make tax simpler for businesses. Some of the proposals include changes in relation to Closely Held Companies including Look Through Companies, changes in relation to non-resident withholding tax (NRWT) and approved issuer levy (AIL) rules that relate to interest paid on debt provided by non-residents, and several provisions in the Goods and Services Tax Act 1985.
Some of the proposals included within the key headings above are:
- Tightening requirements in relation to who can have an interest in an LTC - several controversial changes here
- Debt remission in relation to look through entities - a positive change
- Changes in relation to the loss limitation rule - another positive change
- Changes in relation to related party debt remission - some positives here
- Changes to the GST zero rating provisions to include the supply of certain financial services - some logical changes
- Changes in relation to aircraft overhaul costs - some initial complexities but positive overall
While some of the changes are expected to come into effect at a future date some will apply retrospectively.
There appear to be many submissions received some of which make for interesting reading.
Given that we are nearing the end of the 2016 year and the other more urgent matters before Parliament this bill is not expected to pass into legislation until early next year.
The bill including the submissions made can be accessed via the tax policy website here.