The period of review (“POR”) is an important feature of the tax system, providing taxpayers with a certainty as to their tax affairs by limiting the time during which the ATO can amend their income tax assessments, generally either two years or four years.
In August, Treasury released draft regulations that would exclude entities with “complex affairs or significant international dealings” from the shorter two-year POR that had been extended to medium businesses (aggregated turnover less than $50m) in 2020.
While the draft regulations limiting the two-year POR for certain taxpayers was foreshadowed in the original Budget announcement, the proposed regulations went beyond the stated policy by applying to small businesses (aggregated turnover of less than $10m) and individuals that already qualified before the extension.
In our response to Treasury, we recommended that the proposed changes only apply to entities that are medium businesses and not small businesses as well as making a number of other recommendations.
You can read our submission below.
You can find out more about our advocacy work on the website here.