25/03/2003 - 21:00

Government seeks 'black holes'

25/03/2003 - 21:00


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Government seeks 'black holes'

THE Federal Government has initiated a review of the taxation treatment of certain rights and business expenditures known as ‘black holes’.

Black holes are legitimate business expenses that get no tax relief. The expenditure does not qualify for a tax deduction, nor is it included in the cost of a capital asset.

Sean Neary of tax consultants Webb Martin said that, over the past two years, the Government had implemented measures to address a number of identified black holes.

These include feasibility studies and environmental assessments for mining projects, and the costs of establishing or dismantling a business structure.

However, there are still problems with some expenditure incurred between establishing a business structure and starting to earn business income.

Mr Neary said the most common problems related to marketing, location and feasibility studies for new businesses outside the mining industry.

The Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, said the Federal Government was “now inviting taxpayers to make submissions on specific examples of black hole expenditure and rights that are considered to be taxed inappropriately under existing tax law”.

“The examination of black hole expenditures and rights on this case-by-case basis will then facilitate the development of a legislative solution for black holes and rights more generally.” the minister said


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