A Guide to the TOFA Tax Laws

All relevant provisions brought together in one place in what is a practical working guide to the TOFA tax laws.

Containing straight forward, practical explanations of Div 230 and its interaction with key accounting standards, the Guide to Taxation of Financial Arrangements will provide tax practitioners and accountants with an indispensable entry point to understanding the core TOFA rules.

After sixteen years of discussion papers, consultations and exposure drafts, the comprehensive rules for the taxation of financial arrangements (TOFA) in Div 230 of ITAA 1997 commence on 1 July 2009 (for early adopters) or 1 July 2010 on a mandatory basis.

These core rules represent the final instalment of the TOFA regime and for those taxpayers affected, the income tax treatment of financial arrangements will be fundamentally changed.

TOFA marks a significant turning point in the interaction between the accounting standards and taxation law. The accounting standards now play a central role in valuing and bringing to account gains and losses from financial arrangements for income tax purposes.

The Guide to Taxation of Financial Arrangements is being written by a specially assembled team of in-house Thomson Reuters tax writers and external practitioners. Taking a lead role as consulting author to the guide’s coverage of Div 230, Tony Frost of Greenwoods & Freehills Sydney is an acknowledged TOFA expert whose involvement in the TOFA project goes back to the early 1990s.

The new TOFA regime, with its elective methodologies and links to financial accounting rules, fundamentally reshapes the Australian income tax treatment of financial transactions, from simple debt through to complex derivatives. There are many novel concepts and approaches that affected taxpayers and their advisers will have to understand and master.” 

– Tony Frost, Greenwoods & Freehills Sydney