Wednesday, 26 April 2017

Paving the way for Australia’s infrastructure sector - The 2017 National Infrastructure Conference

by Cheryl Goh, FTI *

The first ATO Taxpayer Alert for the year has packed a punch for Australia’s infrastructure sector. Following the controversial release of Taxpayer Alert TA 2017/1 and the hotly anticipated draft of the Australian Tax Framework, stapled structures are now, more than ever, on the ATO watch list. How will TA 2017/1 impact stapled groups and their investors? Amidst the uncertainty, advisers are left to fill in the blanks once more.  Industry leaders and senior members of the ATO will converge in May at The Tax Institute’s National Infrastructure Conference 2017 to shed some light on the tax treatment of stapled structures.

ATO’s approach to stapled structures

Investment in infrastructure is critical for the Australian economy and governments are increasingly looking to the private sector to develop essential infrastructure assets to attract sufficient capital investment and boost economic growth. Stapled structures play an important part in this.

Stapled structures have been around for the last 30 years and it is no secret that the use of these structures offers tax advantages to certain investors when compared with the use of a company structure for the same type of investment. The ATO, however, are not after traditional stapled structures. What they are coming for are arrangements that are entered into for the dominant purpose of obtaining a tax benefit.

Monday, 24 April 2017

10th Annual NSW Tax Forum - A closer look at Australia's largest tax program

The NSW Tax Forum is the largest tax program in Australia, making it a must attend event for the profession. With the event now only weeks away, here’s a closer look at some of the Forum’s key sessions and presenters, from the corporate, SME and ‘hot topic’ streams.

Setting the scene in the corporate stream, Savanth Sebastian of CommSec looks at the ever-changing state of the business environment. This session, 'A snapshot of the current economic climate' will deliver a pacey and dynamic examination of the economic changes and demographic shifts that are currently shaping the business world.

In his session 'What is Happening with BEPS and Other Elements of International Taxation?' Professor Richard Vann will explore a number of topics linked to this always-moving area of tax including a multilateral instrument to implement treaty-related BEPS measures; BEPS follow-up work in 2016–17; international dispute resolution; BEPS peer review mechanisms and the "inclusive framework"; as well as the diverted profits tax.

Challis Professor of Law at the University of Sydney, Richard is a Consultant at Greenwoods & Herbert Smith Freehills. Having taught at NYU Law School, Harvard Law School and the University of London, he has also held many government consultancies in Australia, and has also been involved in varied work with the Board of Taxation and as a member of Treasury's BEPS Advisory Group.

Thursday, 20 April 2017

A new initiative: tax debt reporting

by Robert Deutsch, CTA *

It’s now more important than ever that your clients get their tax debts under control so as to avoid an adverse credit report being made.

As from 1 July 2017, the government proposes to have legislation in place to allow the Australian Taxation Office to disclose to credit reporting bureaus (CRBs) tax debt information of businesses where those debts have been outstanding for more than a designated period of time and the taxpayer is not effectively engaging with the ATO in managing those debts.

Currently, the ATO does not provide such information to credit reporting agencies.

The rationale for allowing the ATO to disclose such debt information to CRBs is to:
  • reduce any unfair advantage which may currently exist for businesses that do not pay their tax on time, and may have artificially established greater competitiveness against operators who do comply with their obligations
  • provide valuable information to credit providers and other businesses when determining the risk of extending credit or terms of trade to a business with unpaid tax debts which are not being addressed with the ATO
  • provide an extra incentive for taxpayers to engage with the ATO and enter into a plan to repay their debts which will exclude them from credit reporting.

Wednesday, 19 April 2017

How can we simplify the tax system?

by Matthew Pawson, CTA *

At the time of posting, we approach the 2017-18 federal Budget. As in many years past, The Tax Institute has been invited to make a formal submission to the Budget process. During February, I worked with our Tax Policy & Advocacy team and many Institute members to formalise our annual submission. I thank all those involved and I refer members to the Institute’s website for a full copy of that submission.

Our position on the tax system

The Tax Institute’s position is that government, and the administration generally, should use every possible opportunity to simplify Australia’s tax system. One important opportunity is the annual federal Budget process, an important part of Australia’s political, economic and social landscape.

In an ideal world, the tax system should be simple, efficient and transparent. It should promote willing compliance, although, as stated recently at the 2017 Financial Services Conference, the ATO doesn’t expect that compliance by taxpayers need be “too willing”. Our specific position on this point is that all taxpayers, including individuals and corporates, should pay their proper and fair share of tax.

As the Budget approaches, we are mindful that tax and tax issues belong to the revenue side of the equation and we note the public debate around potential changes to capital gains tax and negative gearing.

Wednesday, 12 April 2017

The past, present and future of tax advocacy

by Noel Rowland *

When Harold R Irving and Clarence Montague Orr met at 11c Castlereagh Street, Sydney, on 16 July 1943 to establish the entity now known as The Tax Institute, their intention was to create a specialist organisation that would represent the interests of registered tax agents.

This organisation, first known as the Institute of Registered Tax Agents, became The Taxation Institute of Australia in 1946. For more than 70 years, it has supported tax professionals and has advocated on their behalf for improvements to tax policy and administration.

Over the decades, we have drawn on our members’ practical views and experiences to generate, articulate and promote strategies that will enhance the development and administration of tax law for the benefit of the system, the community and the national economy.

The Tax Institute has contributed to the debate on every major item of tax reform since 1943. The Institute’s president participated in the Tax Summit during the years of the Hawke Government in the 1980s. We provided input into business tax reforms and GST implementation during the Howard/Costello years, the Rudd Government’s 2020 Tax Forum and, more recently, the Abbott/Turnbull Governments’ reform agendas. We were also involved in the major reviews of the tax system undertaken by Asprey (1975), Ralph (1999) and Henry (2010).