The draft statement addresses the application of specific anti-avoidance rules related to the business continuity test for carrying forward tax losses. The business continuity rules permit a company to carry forward tax losses if there has not been a major change (except permitted changes) in the nature of its business activities during the business continuity period. 

It focuses on sections: 

• GB 3BA - pre-emptive changes
• GB 3BAB - injecting income into the loss company (to utilise losses quicker than otherwise would be the case), and 
• GB 3BAC – shifting costs out of the loss company (to use up the losses more quickly). These sections are designed to counteract arrangements that improperly allow a company to carry forward tax losses despite changes in ownership. 

The draft statement clarifies what constitutes an arrangement, including any plan, action, agreement, or transaction that affects tax obligations. It emphasizes the importance of the parliamentary contemplation test and the commercial and economic reality of the arrangement. Detailed examples are included which illustrate how these rules apply. 

CA ANZ supports the publication of the draft statement once finalised which will be a valuable resource for taxpayers and their advisers. 

CA ANZ additionally recommends reviewing and further clarifying specific aspects of the draft.