The financing effect: Will a tax transparent form for closely held businesses in Australia assist with financing?

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Title The financing effect: Will a tax transparent form for closely held businesses in Australia assist with financing?
Author Freudenberg, Brett David
Journal Name Journal of the Australasian Tax Teachers Association
Year Published 2009
Place of publication Australia
Publisher Australasian Tax Teachers Association
Abstract One of the potential reforms to be considered by the Henry Review is a proposal by the Institute of Chartered Accountants Australia and Deloitte for the introduction of a tax transparent company (the ICAA proposal). The central proposition of the ICAA proposal is that the introduction of a tax transparent company will be beneficial to closely held businesses in Australia. An issue facing closely held businesses can be in terms of financing, and this article will consider whether the introduction of a tax transparent company is likely to assist closely held businesses with this. This analysis will consider the model outlined in the ICAA proposal, as well as a number of foreign transparent company forms, particularly: United States' S Corporations and limited liability companies (LLC), the United Kingdom's limited liability partnership (LLP) and New Zealand's Loss Attribution Qualifying Company (LAQC). Through this analysis, a number of areas of concern will be raised about the interaction of a tax transparent company with financing, particularly in terms of eligibility requirements, assessment for unpaid allocations, comparison to corporate tax treatment and active members. It will be argued that as currently structured the ICAA proposal is unlikely to substantially assist closely held businesses address their financing problems and that a partial loss transparent company would be preferable model in this regard.
Peer Reviewed Yes
Published Yes
Alternative URI http://www.atax.unsw.edu.au/atta/jatta/index.htm
Copyright Statement Copyright 2009 Australasian Tax Teachers Association (ATTA). The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 4
Issue Number 1
Page from 121
Page to 154
ISSN 1832-911X
Date Accessioned 2009-12-14
Date Available 2010-06-15T05:30:08Z
Language en_AU
Research Centre Socio-Legal Research Centre
Faculty Griffith Business School
Subject Taxation Law
URI http://hdl.handle.net/10072/30605
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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