Tuesday, 1 September 2015

Nominations sought for Australia’s best tax professionals

The Tax Institute has announced the opening of nominations for the 3rd Annual Tax Adviser of the Year Awards (The Awards), which showcase the profession’s leading experts and rising stars.

The Awards recognise tax professionals across all levels of experience for their professionalism, leadership, high ethical standards and commitment to excellence.

Nominations for the four categories – Emerging Tax Star; SME Tax Adviser of the Year; Corporate Tax Adviser of the Year; and Chartered Tax Adviser of the Year – close on 5 November 2015, with winners announced in March at The Tax Institute’s National Convention.

The Tax Institute’s Chief Executive Officer Noel Rowland said the Awards were designed to celebrate and recognise the shining stars of the Australian tax profession.

“The Awards recognise the best and brightest professionals in the industry for their commitment to clients and the wider community,” said Mr Rowland.

“The calibre of applications across all categories continues to strengthen each year, and we expect nominees for the third annual Awards to be no different.”

Previous winners include the ATO Second Commissioner Andrew Mills, KPMG tax director Minh Dao and Peter Bobbin of Rockwell Oliver.

Matthew Andruchowycz, CTA, Principal at DMAW Lawyers was named the 2014 Emerging Tax Star Winner, and credits it with his career success trajectory over the past six months.

The Emerging Tax Star Award is open to all practitioners with less than five years’ tax experience, with the SME Tax Adviser, Corporate Tax Adviser, and Chartered Tax Adviser categories open to The Tax Institute membership body.

Nominations close on 5 November 2015. For further information please visit thetaxinstitute.com.au/taxawards.
The Tax Institute is the country’s leading professional association and educator in tax. Its 15,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.  The Tax Institute supports the tax profession through education and professional development and works to continually improve tax law and its administration.


Friday, 28 August 2015

Discussing Tax Reform with the Treasurer

On Monday 24 August 2015, Federal Treasurer, the Hon. Joe Hockey MP discussed tax reform at 'Morning Tea with the Treasurer', a free event for members which we co-hosted with Chartered Accountants Australia and New Zealand.

The Treasurer's speech argued the case for personal income tax cuts mainly by reference to income tax rates in other OECD countries. Our President, Stephen Healey, tied the discussion back to the tax reform priorities of the Institute.

The key issue for us in this debate is Australia's tax mix and its dependency on income tax for the bulk of revenue collections, particularly given an ever increasing mobility of capital in the modern economy and our country's future revenue needs given the increasing dependency ratio as highlighted in the intergenerational report.

In our Tax Discussion Paper submission we have recommended that the Government consider shifting away from income tax and increasing reliance on simpler and more efficient consumption taxes, such as the GST. Australia's corporate income tax rate should also be lowered as part of the overall tax reform agenda.

Last Friday, State and Territory Treasurers met in Canberra and agreed to broaden the GST to cover overseas online transactions under $1,000. The Treasurer was tight-lipped on broader tax reform discussions at the meeting but it is encouraging to see that all parties remain committed to working together to achieve a better tax system.

If you are interested in tax reform, next stage of the process is coming soon and you can get involved by contacting us at Tax Policy.

Thilini Wickramasuriya FTI is a Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

3rd Annual Tax Forum speaker profile: Paul Abbey

Paul is a Partner in the International Tax and Transaction Services group of PwC in Melbourne. He has over 20 years’ experience advising local and international clients on income tax issues. Paul drives PwC's Tax Reform project, aimed at building momentum within the community around the need for comprehensive tax reform in Australia.

What is the topic that you are presenting at the Forum?

“The Need for Genuine Tax Reform in Australia”

What can attendees expect to take away from your session?

We need a balanced debate that keeps all issues on the table. The public and indeed participants need to better understand why tax reform is needed. All stakeholders have an obligation to sell that message.

Join us in Melbourne for The Tax Institute's 3rd Annual Tax ForumIt is Tasmania's premier annual taxation event with an outstanding line up of speakers that are sure to educate and stimulate.  

Wednesday, 26 August 2015

2015 Tasmanian State Convention speaker profile: Matthew Cridland

Matthew Cridland is a Partner in the Tax group of DLA Piper and is based in Sydney. He has advised on GST and other indirect taxes, across all industry sectors, for more than 15 years.  He also assists clients to manage indirect tax audits and disputes. Matthew is a member of the GST committees of the Property Council of Australian and the Retirement Living Council. He is also a Chartered Tax Adviser.

What does 2015 Tasmanian State Convention mean to you, and more broadly, to the tax industry?

While I practice law in Sydney, I'm a Graduate of the University of Tasmania. I graduated at the end of 1999 and moved to Sydney shortly thereafter to accept a Graduate position in the GST team at Ernst & Young, about 6 months prior to the commencement of the tax on 1 July 2000. I regularly stay connected with other UTAS graduates. It is a pleasure to be able to return to Hobart some 15 years later to present to the State Convention on GST issues.

What can attendees expect to take-away from the session?

The session will provide an update on the GST issues that most commonly arise for property developments. It can be a complex area and the session will ensure that attendees are up-to-date on the latest developments.

Which other sessions at the 2015 Tasmanian State Convention are you most interested in attending?

I plan to get to most if not all of the sessions. Josh Cardwell's session on property development will be of particular interest.

What do you like to do when not knee deep in tax?

I enjoy following sport, in particular Rugby and NRL.

Join us in Hobart for The Tax Institute's 2015 Tasmanian State ConventionIt is Tasmania's premier annual taxation event with an outstanding line up of speakers that are sure to educate and stimulate.  

Tuesday, 25 August 2015

Understanding the ESS changes: Five things you need to know

Recently, changes to the tax rules surrounding employee share schemes (ESS) were made, with the intention of making it more attractive for employers and employees to participate in them.

The changes to the ESS rules came into effect from 1 July 2015 and effectively allow potentially longer deferral periods for taxing points. In addition, the changes introduce a new concession for startup companies.

Here are five things you must know about the changes.

1. Changes to the tax treatment of employee share schemes take effect on 1 July 2015

The 2015 changes apply to ESS interests issued on or after 1 July 2015. They apply to shares, stapled securities, rights and options to acquire shares or stapled securities.

2. Additional concessions are available for startup companies

Under the new rules, where shares are issued to employees in a startup company at a discount of up to 15 per cent (relative to market value), the discount is exempt from income tax. The shares will only be subject to capital gains tax on disposal.

The rules apply to startup companies from any industry, but they must be a company that has been incorporated for less than 10 years, have no equity interests listed on a stock exchange and aggregated turnover of less than $50 million.

For the concession to apply, the ESS must satisfy the following criteria:
  • For share interests issued under the ESS, a share must be provided at a discount that is no greater than 15 per cent of the market value.
  • For rights issued under the ESS, a right must have an exercise price (or strike price) that is equal to or greater than the market value of an ordinary share in the issuing company.
  • The ESS must require that employees hold ESS interests for at least three years.
3. In tax-deferred schemes, the taxing point may be deferred from vesting to the date of exercise

This change has the effect to, in some circumstances, postpone the occurrence of the first taxing point for rights. Under the new rules, the taxing point in tax-deferred schemes is the earlier of:

  • For rights, when the employee has exercised the rights and there is no risk of forfeiting the resulting share and no restriction on disposing of that share.
  • For all ESS interests, when there is no risk of forfeiting the interest and any restrictions on its sale are lifted.
  • The time when the employee ceases the relevant employment.
  • 15 years after the ESS interests were acquired (previously the deferral was only for 7 years).
4. The test for significant ownership or voting rights limitations has been eased

The limitation on shareholding and voting power has increased from 5 per cent to 10 per cent. However, previously only share ownership was considered in the significant ownership test, but now all interests in the company, including rights to acquire shares, are taken into account.

This effectively allows employees to own a greater share of the company, but takes unexercised options into account.

5. An income tax refund is possible where an employee acquires rights but does not exercise them

Where an employee chooses not to exercise his or her option to acquire shares under an ESS but was taxed on the discount upfront, the employee will be entitled to a refund of any income tax paid. However, the refund will only be available if the ESS was not structured to directly protect the employee from a fall in the market value of the shares (i.e. downside market risk).

The 1 July changes have been eagerly awaited by professionals in the tax, accounting and legal professions. Of them, Louise Boyce, of Squire Patton Boggs says, “[the changes] have been welcomed by employers. We have seen a rush of interest in establishing employee option schemes, particularly by companies who qualify for the startup concessions.”

The new standard

Along with the above changes, the Australian Tax Office (ATO) recently released standard share plan documents to help make ESS easier for startup companies to implement. Available on the ATO website, this library of templates includes a standard employee Option plan and letter of offer to kick off the proceedings for you.