Part IVA and tax reform

Delany, Tom (2005) Part IVA and tax reform. Journal of the Australasian Tax Teachers Association (JATTA), 1 (2). pp. 293-317.


Determining the extent to which the Australian general anti-avoidance tax provisions in Part IVA of the Income Tax Assessment Act 1936(ITAA36) apply to particular transactions is a perennial piece of work-in-progress for our tax professionals, tax administrators and the courts. The introduction of new legislation as a result of the tax reforms emanating from the Ralph Review provides yet another forum to test the application of Part IVA. The personal services income (PSI) provisions (which are part of the tax reform measures) limit the availability of deductions against PSI where the person earning the income cannot satisfy the personal services business tests. A person or entity satisfying the relevant tests is no longer subject to PSI rules but still needs to consider the application of Part IVA to their particular situation. This paper initially clarifies the concept of PSI and the types of entities that will be either within or outside the operation of the PSI rules. The paper then critically evaluates the likely application of Part IVA to PSI that is not subject to the PSI rules. This evaluation is completed by analysing the existing law in relation to Part IVA as well as any ruling and public pronouncements made by the Commissioner relevant to this matter. The paper concludes that certain types of entities generating PSI that are outside the PSI rules may be captured by the application of Part IVA.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Faculty/School / Institute/Centre: Historic - Faculty of Business - Department of Accounting (Up to 31 Mar 2007)
Faculty/School / Institute/Centre: Historic - Faculty of Business - Department of Accounting (Up to 31 Mar 2007)
Date Deposited: 11 Oct 2007 00:18
Last Modified: 02 Jul 2013 22:31
Uncontrolled Keywords: tax reform; anti-avoidance tax provisions; personal services income; PSI rules
Fields of Research (2008): 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150107 Taxation Accounting
22 Philosophy and Religious Studies > 2201 Applied Ethics > 220102 Business Ethics
18 Law and Legal Studies > 1801 Law > 180125 Taxation Law
Fields of Research (2020): 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3501 Accounting, auditing and accountability > 350108 Taxation accounting
50 PHILOSOPHY AND RELIGIOUS STUDIES > 5001 Applied ethics > 500102 Business ethics
48 LAW AND LEGAL STUDIES > 4801 Commercial law > 480106 Taxation law
Socio-Economic Objectives (2008): C Society > 94 Law, Politics and Community Services > 9404 Justice and the Law > 940405 Law Reform

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