Insurance - PricewaterhouseCoopers

4.6
Insurance brokers
taxation
General developments
The Government has embarked on an ambitious plan for significant tax reform.
A comprehensive review of Australia’s tax system is currently under way under the
Henry Tax Review with the first paper issued on 6 August 2008 which highlights
some of the complexities of the current system.
The new Taxation of Financial Arrangements (TOFA) legislation has been introduced
which broadly determines the way gains/losses on financial arrangements are
brought to account for tax purposes. For June balancing companies these rules
apply from 1 July 2009 by election or otherwise from 1 July 2010. This legislation
is likely to have a significant impact on the timing of taxation of investment income
of brokers.
In addition, the Government issued a mandate to the Board of Taxation to undertake
a review of some elements of the Goods and Services Tax (GST) regime. Various
industry bodies lodged submissions including the Insurance Council of Australia (ICA)
and the Investment and Financial Services Association (IFSA). The Board was due to
report its findings to the Government by 31 December, 2008. At the time of printing
the Government had not publically released the Board’s report or their response.
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