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Policy Forum: A Few Observations on Managing the Taxation of Corporate Groups - The Australian Experience

31 Pages Posted: 22 Jun 2011  

Graeme S. Cooper

The University of Sydney Law School


Regimes for aggregating the position of related entities are undertaken for a variety of seemingly worthwhile reasons. Even if the regimes turn out not to be effective, they are nevertheless usually considered relatively harmless aspects of a tax system, perhaps adding a touch of desirable realism to corporate taxation. The Australian experience - attempting and then abandoning its aggregation system, and then starting again - shows, however, that these rules can be dangerous: aggregation rules working in combination can lead to outcomes that are not welcomed by government. A country contemplating an aggregation regime must therefore make a judgment as to whether it is possible to enact measures that accomplish enough of what is sought to make the exercise worthwhile without at the same time opening new avenues for avoidance. If that conclusion cannot be reached with confidence, there appear to be two choices: to abandon the exercise altogether, or instead to accept some type of highly engineered consolidation system that will likely prove costly and difficult to enact, implement, and administer.

Keywords: corporate taxes, consolidation, tax reform

JEL Classification: K10, K30, K34, H25, G38

Suggested Citation

Cooper, Graeme S., Policy Forum: A Few Observations on Managing the Taxation of Corporate Groups - The Australian Experience. Canadian Tax Journal/Revue Fiscale Canadienne, Vol. 59, No. 2, pp. 265-294, 2011; Sydney Law School Research Paper No. 11/36. Available at SSRN:

Graeme Cooper (Contact Author)

The University of Sydney Law School ( email )

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

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