On June 28, 2010, the Tax Law Act (2010 GST Administration Measures No. 2) Act 2010 (Cth) (the Law) (the Act) (the Act) was passed with Royal Approval (1).1 The Act sets out the legal framework for companies that are members of a GST group or a GST joint venture to enter into an indirect tax-sharing agreement (ITSA). Overall, an ITSA has a similar purpose to that of a Tax Participation Agreement (TSA) under the Consolidated Income Tax Group (Consolidated Provisions). 2 To date, most consolidated tax groups have decided to allocate their income tax liabilities on the basis of the fictitious and taxable income of each member of the group or on the basis of each member`s net income as a percentage of the group`s total accounting income. Acceptance of the allocation on these bases will ultimately depend on the facts and circumstances related to the tax situation of the various groups, as well as legislation, regulations and ATO guidelines, which generally apply to tax-sharing agreements. We find that, unlike as ASDs, for which the TSA is an agreement on each tax debt, an ITSA is an agreement for each tax period during which an indirect tax debt is due. This means that the ICC covers each tax period during which one or more indirect tax liabilities are billed. Tax financing agreements also determine tax accounting inflows into the financial statements of tax group members (i.e., deferred tax assets and deferred tax liabilities). Although the article does not cover specific financing regimes to be put in place, it is seen as encouraging business groups to consider entering into tax-sharing and tax financing agreements as part of their entry into the tax consolidation system.

1 Act 74 of 2010. 2 Since the beginning of the income tax consolidation scheme in 2002, members of a consolidated income tax group or consolidated group (CME) (consolidated groups) (all consolidated groups) can enter into an ASD and, if valid, provisions that jointly account for each member of the group or joint venture for the various group income tax liabilities apply. , no application.