The complexities surrounding the current RTFI rules mean that it is imperative that taxpayers examine deductions claimed to ensure that they are accurately reflected in the 2013 Form C disclosures. Different rules apply to acquisitions that took place before 12 May 2010 (the pre-rules), after 30 March 2011 (the prospective rules) and the intervening period (the interim rules). Different tax outcomes will also arise depending on the types of assets held at joining time, past filing positions and whether the consolidated group received a Private Binding Ruling (PBR) or entered into an Advance Compliance Agreement (ACA) with the ATO.
Head companies of tax consolidated groups (and MEC groups) will need to complete the Form C’s new Item 11, disclosing deductions claimed in the income year relating to RTFI, consumable stores and work in progress accordingly, depending on which of the abovementioned rules apply.
Another change to the 2013 Form C is to incorporate the new loss carry-back rules, passed on 25 June 2013. Under these rules, companies will be able to carry back up to $1 million of deductions against profits made in the previous tax year and receive a refund of up to $300,000 from tax previously paid. A one-year loss carry-back will apply for the 2013 income year. For 2014 and later income years, tax losses will be able to be carried back and offset against tax paid up to two years earlier. Taxpayers can claim the loss carry-back offset when lodging their 2013 company tax returns once the rules receive Royal Assent.