The draft Interpretation Statement examines the tax treatment of Emission Units under the Emissions Trading Scheme for industries other than forestry.

However, CA ANZ is not convinced that the current tax treatment sufficiently reflects how businesses manage their Emission Units. According to CA ANZ, some taxpayers have retained free units over time due to economic incentives, such as increasing unit value and business energy efficiency improvements.

Additionally, CA ANZ notes that the legislation does not clearly specify how units should be accounted for after two years.

CA ANZ recommends some aspects of the item be reviewed and clarified with additional references.