This report lists 290 tax expenditures and, where possible, provides an estimate of the dollar value or order of magnitude of the benefit to taxpayers.

Introduction
A tax expenditure arises where the actual tax treatment of an activity or class of taxpayer differs from the benchmark tax treatment.

• Tax expenditures typically involve tax exemptions, deductions or offsets, concessional tax rates and deferrals of tax liability.
• A positive tax expenditure reduces tax payable relative to the benchmark. A negative tax expenditure increases tax payable relative to the benchmark.

 Benchmarks represent a standard taxation treatment that applies to similar taxpayers or types of activity.

• Benchmarks may also incorporate structural elements of the tax system; for example, the progressive income tax rate scale for individual taxpayers.

Determining benchmarks involves judgment. Consequently, the choice of benchmark may be contentious and benchmarks may vary over time. The choice of benchmark should not be interpreted as indicating a view on how an activity or taxpayer ought to be taxed.

• To facilitate discussion and understanding of the impact of using different benchmarks, the 2013 TES included an illustrative case study which showed the differences in the estimates for superannuation tax expenditures if an expenditure tax benchmark was used rather than the usual income tax benchmark — see Appendix A, 2013 Tax Expenditures Statement. Although that exercise has not been repeated for this year’s TES, the conceptual points that were discussed in the 2013 TES remain.