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Clear Exit Tax Sharing Agreement

By • Sep 14th, 2021 • Category: Uncategorized 9 views Cetak Artikel Ini Cetak Artikel Ini

Under the new International Financial Reporting Standards, tax groups must ensure that they have a tax financing agreement that applies an “acceptable allocation method” according to the Urgent Issues Group`s (UIG) 1052 Tax Consolidation Accounting interpretation. If the tax financing agreement does not provide for an “acceptable allocation method”, group members may be required to account for dividends and capital distributions or capital injections considered capital deposits in their accounts. We draw attention to the fact that, unlike ASDs, for which the TSA is an agreement for any tax-related liabilities, an ITSA is an agreement for each tax period during which an indirect tax debt is due. This means that the ITSA covers any tax period during which one or more indirect tax debts are collected. Based on the Commissioner`s opinion on the obligation to pay an amount before the exit date in accordance with the consolidation provisions, it is expected that an amount will be paid for clear exit purposes, if: ultimately, the question of whether there is an adequate allocation is a matter left to the courts. In McGrath & Ors as liquidator of HIH Insurance Ltd [2009] NSWSC 1244, Barrett J. of the Nsw Supreme Court considered the issue of adequacy in the context of a tax-sharing agreement. His honour was highlighted: business groups are encouraged to consider entering into tax-sharing agreements and tax financing agreements as part of their entry into the tax consolidation system. Where an ITSA applies to an indirect tax debt, an outgoing member may benefit from a clear exit from an indirect tax debt that was not due before the exit date, provided that it has paid the amount of the contribution thus fixed by the ITSA for the tax period for which the maturity period was not paid or a reasonable estimate thereof. The elimination of joint and several liability and the benefit of a clear exit are not possible if the representative member files two or more ASTIs over the same tax period.17 This is a point that is very easy to overlook, especially when the composition of the GST group changes over time and changes are made to existing ITSAs or new ITSAs are received. .

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is Masim "Vavai" Sugianto, Professional IT. Tinggal di Bekasi, bekerja di Jakarta. Aktif pada Komunitas OpenSUSE Indonesia. Berminat pada dunia Open Source dan pengembangan program Java. Keseharian dapat dimonitor pada Blog Pribadi
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