TY  - JOUR
AU  - Brown, C
AU  - Davis, K
Y2  - 2021/01/06
Y1  - 2020/07/01
SN  - 0812-695X
UR  - http://hdl.handle.net/11343/258564
AB  - Tax-driven Off-Market Buybacks (TOMBs) have been used by large Australian companies to distribute cash and stream franking (tax) credits to low-tax-rate shareholders. While small in number, the amounts are significant, involving an estimated cost to government tax revenue in 2018 of around $2 billion. This paper reviews the current and historical evolution of the regulation and taxation of TOMBs and argues that there are fundamental problems with corporate use of TOMBs. These include inequitable treatment of shareholders, government tax revenue costs, inconsistency with good principles of taxation, arbitrary tax determinations and practices which are difficult to justify. Since corporates can distribute cash to shareholders using other, quite standard, capital management techniques, we argue that a social cost-benefit analysis leads to the conclusion that TOMBs should be prohibited.
PB  - The Tax Institute
T1  - Tax-driven Off-Market Buybacks (TOMBs): Time to Lay Them to Rest
IS  - Australian Tax Forum: a journal of taxation policy, law and reform
VL  - 35
IS  - 2
SP  - 232-257
L1  - /bitstream/handle/11343/258564/Tax-driven%20Off-Market%20Buybacks%20%28TOMBs%29-%20Time%20to%20Lay%20Them%20to%20Rest.pdf?sequence=2&isAllowed=n
ER  -