Chartered Accountants ANZ and CPA Australia have lodged a joint submission for the Senate Committee inquiry into Treasury Laws Amendment (2023 Measures No.1) Bill 2023. In the joint submission, we comment on Schedule 5 of the Bill dealing with franked distributions funded by capital raisings.

Our key concerns in the submission include:

• The drafting of Schedule 5 is unnecessarily broad, making it difficult for companies to practically apply proposed section 207-159 of the Income Tax Assessment Act 1997 (ITAA 1997).
• The 15 September 2022 application date to distributions is now untenable as Australian companies will need ATO guidance to practically apply the new section.
• There is not enough clarity for private groups and we request that either Schedule 5 be not applicable to private companies, or the EM should be amendment clarify the treatment of private companies’ scenarios outlined in the submission.
• It is our view that the new section will not be easier to administer or comply with compared with existing law and administration.
• We are concerned with the ramifications on shareholders where section 207-159 applies.
• The legislation and EM do not provide enough clarity (and certainty) for dividend reinvestment plans (including underwritten dividend reinvestment plans) which are not at the “extreme end”.