Wednesday, 18 May 2016

9th NSW Annual Tax Forum - The usual suspects?

With the Budget just passed and a Federal election around the corner, 2016 has certainly (positively) geared up to be the year of tax. Perhaps it hasn't been the rigorous tax reform that the country was holding its breath for, but new changes still affect both the SME tax adviser and corporate practitioner. And in typical tax style, more complexities emerge from the usual suspects – superannuation, Division 7A and multinational tax avoidance. What do these mean for you and your client? Hear from Australia’s leading tax minds at the 9th NSW Annual Tax Forum.

Post-Budget, pre-election and everything in between

It’s officially election season! What does this mean for the tax world? Hear about it first hand from Assistant Treasurer, the Hon Kelly O’Dwyer MP and Shadow Assistant Treasurer, Dr Andrew Leigh MP, who will both speak at a new breakfast session on Friday 3 June to shed light on key tax measures post-Budget and pre-election. A Q&A session at the end of each presentation will ensure delegates have their say.

The long arm of the (tax) law

The SME and corporate sector have both had their fair share of attention this year. Small businesses seem to have come out the winner from the Budget and the Panama Papers leak has thrown large multinationals into the limelight with issues of tax avoidance. All of a sudden, all eyes are on the tax profession.

This year’s event offers three streams to delegates to tailor their understanding of the long arm of the (tax) law. The SME, corporate and hot topics streams each boast keynote speakers who are respected leaders in their fields.

Different perspectives, one objective

For practitioners at the bigger end of town dealing with M&A transactions, the tax consolidation landscape remains in a constant state of flux. Wayne Plummer’s (PwC) session will provide an analysis of recent and proposed consolidation changes as part of the broader tax reform process.

In addition, the acquisition of businesses continues to represent an important linchpin of corporate growth strategies. Julian Cheng and Michael Jeffreys (Deloitte) discuss the complexity of the existing legislative framework amidst financing considerations such as thin capitalisation, transfer pricing and maximising recoverability through appropriate structuring.

From the SME perspective, Ken Schurgott, CTA (Life) will delve into trust streaming issues and how to steer your clients through the practical problems of compliance with tax laws. Laid out on the table are issues on absolute entitlements, bare trusts, CGT events A1 and E1 and speculation as to what impact new legislature might have on trusts.

And then we come to the usual suspect: Division 7A. New, as well as recurring issues rear their heads. What do you do about a pre-December 1997 loan that is still on the balance sheet? What structuring opportunities are available to minimise the impact of Div 7A? Professor Gordon Cooper, AM, CTA (Life) will speak on why Div 7A is still an ongoing issue for practitioners.

Insider information: the ATO’s perspective

Want some insider intel on how to get your issue dealt with at the ATO?

Hear from senior members of the ATO on when a ruling might be a good idea, and what other options are available if a ruling isn’t appropriate or available. Find out about the ATO "safe harbours" and administrative guidance. How reliable are they? Tim Dyce (ATO) will also discuss the ATO’s “test case program”, which is not widely known. Insider information indeed!

Join us 

2016 has ramped up to be a year of high tax activity. With SME and corporate tax activity comes opportunities and risks. SME advisers have their hands full with new small business and superannuation changes, whilst larger corporates deal with the increasingly active M&A market against a favourable lending market. Join us, the Treasurers, ATO representatives and high calibre tax advisers at this year’s 9th NSW Annual Tax Forum to grapple with these issues together. 


The 9th NSW Annual Tax Forum takes place 2-3 June, at the Sofitel Wentworth Sydney. Featuring 42 sessions over two days, it includes up to 14 CPD hours, and features a range of flexible ticketing options. Find out more

Tips and Tales: A Tax Student’s Life

We understand that studying while working full-time can be daunting. To help you manage your studies we have peeked into the lives of our graduates to find out how they juggle work and study whilst maintaining a life balance.


Ready to get started?
With the option of face-to-face or distance study, our education Programs and Single Subjects can be completed in a flexible format that suits you.

Find out more by visiting our website or calling 1300 TAX EDU (1300 829 338).

Wednesday, 4 May 2016

13 Budget takeaways from the 13 times the Treasurer mentioned “jobs and growth”

Jobs and growth, jobs and growth, jobs and growth. Did someone mention something about jobs and growth?

With the catchphrase “jobs and growth” mentioned 13 times in his Budget speech, Treasurer Scott Morrison’s first Budget is all about the Turnbull Government’s 10 year Enterprise Tax Plan to support jobs and boost the economy by directing spending where it is needed and most effective. The question is, what key tax and superannuation measures has the Government brought to the table to actually promote jobs and growth?

13 Budget takeaways

1. Small business

The small business entity turnover threshold will increase from $2m to $10m from 1 July 2016. An additional 90,000 to 100,000 businesses with an aggregate annual turnover of less than $10m will be able to access tax concessions such as the lower small business corporate tax rate, accelerated depreciation and depreciation pooling provisions.

The tax discount for unincorporated small businesses will increase incrementally over 10 years from 5% to 16%. The tax discount will increase to 8% on 1 July 2016.

2. Superannuation

From 1 July 2017, the threshold at which high income earners pay additional contributions tax will be reduced from $300,000 to $250,000. The annual cap on concessional superannuation contributions will also be reduced to $25,000.

3. Personal income tax

The threshold at which the 37% marginal tax rate for individuals commences will increase, from taxable income of $80,000 to $87,000 from 1 July 2016. This stops around 500,000 taxpayers from being taxed at the second highest marginal tax rate.

4. Medicare levy low-income threshold

For singles, the threshold will increase from $20,896 to $21,335. For couples with no children, the threshold will increase from $35,261 to $36,001. The additional amount of threshold for each dependent child or student will be increased from $3,238 to $3,306. The increased thresholds will apply to the 2015-16 income year and later years.

5. Company tax

The company tax rate will progressively reduce to 25% over 10 years, phasing in changes from 1 July 2016. Businesses with an annual aggregated turnover of less than $10m will have a tax rate of 27.5% from the 2016-17 income year.

6. Div 7A

Targeted amendments will be made to improve the operation and administration of integrity rules for closely-held, private groups (in Div 7A of the Income Tax Assessment Act 1936) from 1 July 2018.
A few of these include a self-correction mechanism for inadvertent breaches of Div 7A and appropriate safe-harbour rules to provide certainty for taxpayers.

A post-implementation review will apply from 1 July 2018.

7. Consolidation – deductible liabilities 

Integrity measures are in place that prevent a consolidated group from obtaining a double tax benefit when an entity joins the group. The start date is deferred from 14 May 2013 to 1 July 2016.

8. GST 

Currently the GST threshold for imported online purchases is $1,000. However, with the new rules, taxpayers will now need to pay GST on low value goods imported from 1 July 2017.

The intent of this measure is that low value goods imported by consumers will face the same tax regime as goods that are sourced domestically.

9. Multinational –  diverted profits “Google tax”

A 40% diverted profits tax (DPT) (aka Google tax) on the profits of multinational corporations that are artificially diverted from Australia will be introduced for income years commencing on 1 July 2017. The new tax will target companies that shift profits offshore through arrangements involving:

  • related parties that result in less than 80% tax being paid overseas than would otherwise have been paid in Australia;
  • where it is reasonable to conclude that the arrangement is designed to secure a tax reduction; and
  • that do not have sufficient economic substance.

10. OECD hybrid mismatch rules implemented

Rules developed by the OECD to eliminate hybrid mismatch arrangements will be implemented from 1 January 2018 to target multinational corporations that exploit differences in the tax treatment of an entity.

11. Tax administration

The ATO will establish a tax avoidance taskforce to undertake enhanced compliance activities targeting multinationals, large public and private groups and high wealth individuals. It will conduct operations to improve tax compliance in high tax risk sectors.

12. Tobacco excise

Tobacco excise and excise-equivalent customs duties will be subject to four annual increases of 12.5% from 1 September 2017

13. Wine equalisation tax rebate (WET)

The Government will extend the current brewery refund scheme to domestic distilleries and producers of low strength fermented beverages such as non-traditional cider from 1 July 2017. The scheme will not be extended to most alcopops producers nor wine which benefits from the wine equalisation tax rebate.

Members of The Tax Institute can access our Special 2016-17 Budget Edition of TaxVine for a detailed summary of the Budget.

Infrastructure in an era of change

With the Federal Government looking to smooth the transition from the mining investment boom to a more diverse and broad-based economy, the private sector is being increasingly called upon to develop and maintain roads, ports, pipelines, power and other essential infrastructure assets.

The Government’s announcement of the ‘Smart Cities’ project, seeks to partly fund infrastructure including Sydney's second airport, Melbourne Metro Rail and Brisbane's Cross River Rail, while remaining vague on detail.

In this period of increased focus and rapid change, The Tax Institute’s National Infrastructure Conference remains only event focused entirely on the tax issues affecting infrastructure. 

We spoke with Jillian Gardner of Macquarie Group, who will be take part in a panel discussion at the conference with Karen Forster, CTA, REST Industry Super, Brendan O’Brien, CTA, AMP Capital and Andrew Helm, Future Fund Management Agency about what to expect from the conference. 
Based in Sydney, Jillian work as a Division Director in the Macquarie Infrastructure and Real Assets Division (MIRA) of Macquarie. MIRA manages more than 45 funds with A$138 billion of assets under management in infrastructure, real estate, agriculture and energy. 
Jillian told us that her panel session, Outbound Infrastructure Investment, ‘is primarily structured to provide insights from a group who manage global tax risk’. Australian institutional outbound investment is growing, and infrastructure funds need to understand and cater for their Australian investor base. The panel will discuss the common issues that arise for fund structures and co-investment deals in respect of European and US infrastructure assets.
Asked about the specific appeal of this conference, Jillian said ‘“Tax” covers such a broad range of topics, skills and experience that it is important for the sub-specialties like infrastructure to come together and discuss the issues relevant to it.’
When asked which other sessions at the Conference she was most interested in attending, Jillian noted ‘The agenda actually provides a long list of interesting sessions – it is too hard to pick!’
With the conference program covering everything from the meaning of “control” in the context of public trading trusts and the thin capitalisation rules, to BEPs and global infrastructure, as well as financing stapled structures, tax sharing and tax funding agreements, and an update on the managed investment trust (MIT) and a session on the ATO’s perspective on infrastructure investment from Jeremy Hirschhorn, you can see why it is difficult to choose.
The 2016 National Infrastructure Conference takes place over two days, on 26-27 May, at The Langham in Melbourne. Featuring 10 sessions, it includes 10 structured CPD hours. Find out more.

Thursday, 21 April 2016

The Tax Institute President says a lack of reform would be a national shame


We urge the Federal Government not to miss the boat on tax reform ahead of the 3 May Budget.

President Arthur Athanasiou, CTA, said it would be a national shame if the government didn’t unveil significant plans to reform the tax system.

We would like to a see a tax system which is fair, simple, efficient and sustainable. Currently, the debate around the system has stagnated despite the government committing to a holistic tax reform.

Though not optimistic about any significant structural tax initiatives in the Budget, we believe that the government should shift the country’s dependence on income tax to a more simple and efficient consumption tax.

“The government must determine the appropriate tax mix for Australia to provide sustainable revenue to meet future government spending promises” Mr Athanasiou said.

We believe the 2016 Budget priorities should include:
  • reducing company tax to 25%;
  • abolishing the ‘10% rule’ limiting superannuation contributions to self-employed Australians;
  • reforming superannuation laws that benefit the small wealthy minority that see superannuation as a wealth and estate planning vehicle rather than providing reasonable benefits for retirees;
  • continuing deregulation initiatives and publishing regulation impact statements for each reform;
  • concentrating on internationally co-ordinated efforts to address base erosion and profit shifting (BEPS) rather than introducing new Budget measures on multinational taxation; and
  • increasing digital resources at the Australian Taxation Office to improve inefficient systems.

Mr Athanasiou also suggests that the government must commit to reviewing issues surrounding individual tax, superannuation, general business and small business tax, not-for-profit sector tax, GST, state taxes, and the complexity, administration and governance of the tax system.

“Shifting from the current heavy dependence on individual and corporate income tax towards more efficient consumption taxes will create a simpler tax system to implement and regulate while providing the government with more sustainable revenue collections.”

Whatever the Budget does contain in terms of tax measures, members of The Tax Institute will be the first to hear what they mean for practitioners and for their clients in our Federal Budget edition of TaxVine, delivered direct to members’ inboxes on Budget night.