EVEN with the accounting firepower of WA’s biggest listed company, dealing with the new tax consolidation regime is a fairly daunting exercise.
Wesfarmers general manager taxation Luigi Mottolini said while the first tranche of legislation had helped, it was not really what business needed first.
“This legislation is not setting out how to form a consolidated group in the first place,” Mr Mottolini said.
“The rules are so complicated and detailed that we still need the proper legislation before we can do some proper planning.”
Wesfarmers is a classic example of the sort of company affected by tax consolidation. It is a sprawling conglomerate with interests in areas such as agribusiness, transport, coal and retail.
Mr Mottolini said the group was collecting information to get market valuations as at June 30 in case it decided to consolidate from July 1.
“You have to be doing the work now if you want to gain the flexibility to do that,” he said.
However, Mr Mottolini is not convinced there will be big cash benefits for companies from the transitional measures.
“There’s been a lot of talk about potential uplifts in value of depreciatory assets but these transitional rules are so tight,” he said.
“There is probably not as much scope in these rules as people thought there would be. “The biggest benefit to us comes from having dividend and franking credit traps in groups removed.”
