Trying to Make Sense of the Financial Arrangements Regime

Australian Tax Review, Vol. 36, No. 3, pp. 160-172, 2007

Sydney Law School Research Paper No. 07/61

26 Pages Posted: 16 Aug 2007 Last revised: 20 Nov 2007

Graeme S. Cooper

The University of Sydney Law School

Abstract

The proposed Australian regime for taxing financial arrangements ("TOFA") is presented as a unified coherent regime, based upon, and executed by reference to certain principles. These principles leave much important detail to be inferred, with sometimes unpredictable consequences. Moreover, the drafters have chosen to construct TOFA as a parallel regime alongside existing rules, rather than as a substitute for them, where it is triggered. This deliberate duplication then requires adjustment rules to manage the overlap between existing law and TOFA. These design choices - to insert a duplicate regime and then manage the overlap by a subtraction process - is used elsewhere in tax legislation and creates well known difficulties. The decision to repeat this system for TOFA re-creates many of the same kinds of difficulties, for no obvious benefit.

Keywords: income tax, financial transactions

JEL Classification: H25, H26, K34

Suggested Citation

Cooper, Graeme S., Trying to Make Sense of the Financial Arrangements Regime. Australian Tax Review, Vol. 36, No. 3, pp. 160-172, 2007; Sydney Law School Research Paper No. 07/61. Available at SSRN: https://ssrn.com/abstract=1007345

Graeme S. Cooper (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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