Tuesday, 15 November 2016

Evolution or revolution - The 32nd National Convention

It is an interesting time to be a tax practitioner. The tax world is at the cusp of something quite revolutionary. With technology, digitalisation, globalisation and artificial intelligence converging to disrupt the entire industry, there is no doubt that we really are at the fulcrum of change. Here we take a closer look at the program and some of the presenters at The Tax Institute’s 32nd National Convention on how to arm yourself with the knowledge to navigate what is still a very uncertain future.

Tax practitioners are no strangers to change. Tax laws, rulings and policies are constantly in flux – we learn, we adapt, we even get creative when there is a lack of guidance. However, what is happening to the tax and accounting industry at the moment is completely unprecedented. When talk of robots and artificial intelligence become a serious topic of conversation [1], that’s when you know some serious change is about to happen.

The digital economy: our new normal

For the future generation of tax practitioners, this brave new world of tax will be their new normal – but what about tax practitioners of the current generation? For those of us who have lived and breathed the old order of things, how do we prepare ourselves for what is to come?

Without diminishing the importance of understanding the ins and outs of our incredibly complex tax system, we can no longer rest solely on our tax technical laurels to be effective advisers. Technology, innovation and globalisation are shaking things up. The digital economy is now becoming the new order of things.

The future of the tax professional

According to PwC’s report, The STEM Imperative: Future Proofing Australia’s Workforce, 44% or 5.1 million current Australian jobs are at risk from digital disruption over the next 20 years
[2]. Tax and accounting roles are up there as high risk roles due to developments in artificial intelligence and automation. Whilst it is anticipated that repetitive tasks and certain compliance work are likely to be taken over by computers and robots in the future, a more interesting question arises. What new issues and new markets should we be looking at as a result of these technological improvements? 

In their session, Kirsten Deards (NSW Bar) and Craig Jackson, CTA (EY) share their insights into the new sharing economy and how it is disrupting traditional industries and challenging current tax laws. The session will cover crowdfunding and other types of sharing economy transactions, compliance issues and the Federal Court’s Uber GST decision. Issues and markets that did not exist less than a decade ago are now becoming key points of concern for tax practitioners.

With the rise of the digital economy and globalisation, traditional tax laws and business models are about to be redefined and reinvented. Cloud-based transactions and technological advancements have meant that firms and regulatory bodies are now making use of innovative strategies to minimise cost, simplify processes and increase efficiency in a globalised world.

In ‘The Future of the Tax Professional’ session, speaker Steve Healey, CTA-Life (Grant Thornton) acknowledges the pressures that the tax profession is coming under with technological changes and will speak on what the ATO’s attitudes are towards compliance simplification. The burning question of what we need to do as advisers to cope with these changes are answered as Steve shares his thoughts on what a good tax adviser needs to be in times of rapid change.

Looking outwardly, speaker John Preston (Deputy President of the Institute of Taxation UK) also taps into this discussion and will speak on what qualities are needed for the future tax professional. His observations will be shared from a global perspective and challenges that tax professionals face in Australia will be highlighted against global tax policy trends.

Creating borders in a borderless tax world

Globalisation has made the tax world smaller, more agile and increasingly more transparent. Transactions across countries are on the rise, which leaves tax practitioners grappling with the multitude of different tax laws in order to best service clients.

Karen Payne, CTA (Board of Taxation) sheds light on the new anti-hybrid rules that have been proposed in Australia. Following the report issued by the OECD as part of the BEPS project, this session considers how the rules would operate and when they could be effective.

The need to draw up borders and boundaries to regulate the increase in global tax activity is high on the agenda for taxpayers, large corporations and SMEs alike. Mark Konza (ATO) and Jerome Tse, CTA (King & Wood Mallesons) explore how, when and why global revenue authorities are increasingly using their information-gathering powers to ensure that taxpayers are paying their fair share of tax in their jurisdiction.

For corporates, Angela Wood, CTA (KPMG) and Jonathan Woodger (ATO) will speak on multinational anti-avoidance law (MAAL) and the diverted profits tax (DPT). The OECD's BEPS action plan is tackling tax avoidance on a global scale and putting companies under the microscope to stay compliant in a stricter regulatory framework.

Smaller enterprises are not excluded from this either. While transfer pricing has been the key focus in the multinational tax debate, the application of transfer pricing to SMEs has created significant compliance and technical issues that have largely gone under the radar. In his session, Chris Bowman, CTA (ConsultTPAustralia) looks at how transfer pricing and related documentation rules apply to SMEs and how to deal with self-assessment, transfer pricing audits and disputes arising from current law.

With globalisation continuing to serve as an enabler for SMEs looking to expand offshore, Denise Honey (Pitcher Partners) discusses foreign investment by successful growing businesses and will cover the challenges faced by SMEs, the impact on ultimate Australian owners, appropriate structures and dividend exemptions.

Are we fighting robots, or just fighting change?

There is no doubt the tax world is changing. The current generation of tax practitioners are facing a pivotal moment where everything old meets everything new. As unnerving as technology, digitalisation, globalisation and artificial intelligence may be, the key to tackling the new order of things is to keep learning, adapting and collaborating.

This year’s sessions have been developed to be both reactive and proactive in nature, to provide you with a holistic view of current and emerging trends. We hope that you find this year’s event insightful, inspiring and thought-provoking.

Join us

Join us to hear from the presenters above and other high calibre speakers at The Tax Institute’s 32nd National Convention in Adelaide, 15-17 March 2017.

Ranked by Lonely Planet's Best of Travel 2017 in the top five regions in the world [3], the Convention's networking and social activity program has also been designed to bring you some of the best South Australia has to offer. Incorporating the gala dinner and Tax Adviser of the Year Awards, make sure you don't miss this opportunity.

[1] http://www.smh.com.au/business/the-economy/artificial-intelligence-to-help-prepare-tax-returns-report-20160822-gqykq6.html

[2] PwC report, The STEM Imperative: Future Proofing Australia’s Workforce

[3] http://www.abc.net.au/news/2016-10-25/lonely-planet-ranks-sa-in-top-5-regions-in-the-world/7964920

Friday, 11 November 2016

The rise of a tax star

In 2014, The Tax Institute’s Tax Adviser of the Year Awards recognised Matthew Andruchowycz as the Emerging Tax Star for that year.

At the time, Matthew was a Senior Associate at Wallmans Lawyers in Adelaide. According to the judges, he demonstrated an ability to work on complex matters at a level significantly beyond the level expected of a tax professional with fewer than five years’ experience.

Fast forward to today and Matthew is already an accomplished senior tax professional. As a Principal at DMAW Lawyers, he works with accountants, financial planners, bankers, business owners and high net worth individuals on a range of intricate taxation and superannuation matters.

He is also a sought-after tax author and speaker, and has been included in both the Australian Financial Review’s “Best Lawyers” list and Doyles Guide to the Australian legal profession as a leading tax lawyer.

Choosing tax as a career

The Tax Institute asked Matthew about the factors that initially led him to pursue a career in tax. He told us he had always been a “numbers person” and that, as a young member of Wallmans’ general commercial team, he had been fascinated by the work and attitude of the specialist tax lawyers.

“I thought they were impressive,” he said. “They just seemed very focused, hard-working and busy. They stayed a bit longer after hours. They always seemed to be flat-out, walking around the office a bit faster than everyone else.

“I was interested and wanted to get in on the action, even though at that time I didn’t fully appreciate what tax law actually was.”

The attractions and challenges of tax law

Matthew began working in tax in 2009 and moved to DMAW in July 2015. So far, he has enjoyed every day of his career.

“I think it’s what I was meant to do,” he said, “in the sense that I’m naturally inclined towards the more technical, numbers-based, analytical type of law.

“There’s also scope for hard work, which I enjoy. It’s a bigger, more complex area of the law than most others. So there’s an opportunity to distinguish yourself.”

The Emerging Tax Star award

Winning The Tax Institute’s Emerging Tax Star award in 2014 was an enjoyable experience for Matthew. In fact, he still considers it one of his career highlights.

“I received amazing encouragement on the night of the presentation and afterwards,” he said.

“I was completely surprised when they announced I was the winner. I had spoken with the other finalists and dismissed the idea that I could win, because they were from serious firms in Melbourne and Sydney and seemed so switched-on.

“Receiving the award made me feel very positive about my chosen career and the idea that I would likely choose to keep doing it for 30 more years.”

The award has also helped to boost Matthew’s professional reputation over the two and a half years since.

“A couple of times I’ve overheard business referrers talking to their clients about the award,” he said.

“I’ve actually heard them say ‘That's Matt, he won The Tax Institute’s Emerging Tax Star Award’. They’re using it as part of their sales pitch on my behalf. It’s happened a few times.”

Advice for entry-level tax practitioners

Matthew doesn’t hesitate to recommend tax as worthwhile career choice for someone who has the right qualities.

“I love my work,” he said. “For me, tax law is a brilliant profession because it’s so challenging. If you’re the kind of person who enjoys work, wants to excel in a particular area, and likes taking on the hard tasks that other people are often not willing to do, tax can be rewarding.

“It requires many different disciplines and skills — including technical, creative, communication and investigative skills — and I couldn’t recommend it more highly.

“The only caveat is that, to get the most out of it, you have to love it and you’ll probably have to work at least 10% harder than the next person.”


Winners of the 2017 Tax Adviser of the Year Awards will be announced at the 32nd National Convention in Adelaide on 16 March 2017. Find out more about the awards at taxinstitute.com.au/leadership/tax-adviser-of-the-year-awards.

Friday, 4 November 2016

Tax and small business - there's work to be done

by Noel Rowland *

On 10 October in Canberra, the Australian Chamber of Commerce and Industry Business Leaders Summit featured a panel session on small business. It included input from the Minister for Revenue and Financial Services, the Hon. Kelly O’Dwyer, MP, and the Shadow Assistant Treasurer, the Hon. Dr Andrew Leigh, MP, who acknowledged that small business represents the engine room of the Australian economy and that the tax system has a significant impact on small business.

So where are we at with reforms to the tax system that support small business?

Two reports help to answer this:

  • the Australian Government’s Re:think tax discussion paper; and
  • the Board of Taxation’s Review of tax impediments facing small business.

The government’s discussion paper was issued in March 2015 and influenced the tax measures targeted at small business included in the last federal Budget.

The Board of Taxation’s 2014 review, although preceding the above report, highlighted the fact that a lot of work needed to be done in the area.

Re:think tax discussion paper

Chapter 6 of the government’s Re:think tax discussion paper identified the characteristics of the tax system that impact small businesses, and the challenges small businesses face in terms of the complexity of the tax system.

It explained that “small businesses are numerous, diverse and make an important contribution to the Australian economy”. They adopt “different legal and management structures, and may be driven by different preferences and profit motives than larger businesses”.

Small businesses are disproportionately burdened by a complex tax system, especially where “features of the system encourage them to adopt particular legal structures that are costly to establish and maintain”. While tax law provides concessions that may benefit small businesses, they “may add to the complexity and compliance burden”.

Review of tax impediments facing small business

The Review of tax impediments facing small business was a report that the Board of Taxation submitted to the government in August 2014 and released in early 2015.

Many of the points made in the report are echoed in the Re:think tax discussion paper in terms of describing the importance of small businesses in the economy and the complexities of tax legislation and compliance matters.

It noted that frequent change (ie incremental reform) is often seen as a contributing factor to the compliance burden facing small businesses. It therefore “identified and recommended key reform priorities that aim to reduce tax impediments facing small business”.

A key recommendation was for a further, more detailed review of tax impediments facing small business.

Although the last two federal Budgets contained a few welcome measures to benefit small businesses (eg a reduction in the corporate tax rate and the changes to accelerated depreciation), it appears that comprehensive reform is not on the agenda.

Aligning law and guidance

The Board of Taxation review also suggested that small businesses face considerable compliance and complexity issues in terms of their administrative relationship with the ATO.

One positive step has been the timely development of ATO public guidance.

Previously, a delay would typically occur between the issuing of tax legislation and the corresponding ATO guidance.

Guidance material released at the same time the law is introduced is a great initiative — especially for small business advisers who can immediately see both the law and how the ATO will interpret it.

Digital by default – single touch payroll

The Institute supports initiatives that may reduce red tape for businesses. We do, however, have concerns that implementing some digital initiatives, such as single touch payroll, will increase rather than decrease the compliance burden on small businesses.

The Institute argues that such initiatives should be optional for small businesses until the government clearly expresses the benefit to them.

The possible benefit of single touch payroll to small businesses will be tested in a pilot soon to be run by the ATO.

Division 7A tax rules

One issue that preoccupies small business tax advisers is the complexity of Div 7A of the Income Tax Assessment Act 1936 (Cth).

The last Budget included a measure to improve the administration of Div 7A that will come into effect at the beginning of the 2018-19 income year. We are yet to see the extent to which this measure will simplify processes for small businesses.

The Budget announcement of “targeted amendments to Division 7A” offers a glimmer of hope for some change, hopefully constructive, on these rules. We cannot be sure until the consultation process begins, as the announcement does not contain much detail.

So, back to the earlier suggestion — while there’s some progress, there is much more to be done.


* Noel Rowland is Chief Executive Officer of The Tax Institute.

Wednesday, 2 November 2016

The Tax Institute comments on the ATO's public advice and guidance

The Tax Institute’s Tax Counsel, Stephanie Caredes, recently participated in an ATO panel discussion with three other tax experts. The moderator was Channel 7’s David Koch.

The discussion centred on how the Tax Office is partnering with industry to improve the experience of tax payers and tax professionals through better public advice and guidance.

Alongside Stephanie, the panel included the ATO’s Deputy Chief Tax Counsel, Will Day, the Corporate Tax Association’s Executive Director, Michelle De Niese, and Prolegis Lawyers’ Consultant, John King.

The discussion covered a range of specific issues around the main theme, including measures to improve public advice and guidance services, the provision of public advice and guidance on changing legislation, and the new law companion and practical compliance guidelines.

The panel also answered a number of public advice and guidance questions.

You can see a video of the discussion, produced by Pinstripe Media, on the ATO’s YouTube channel.

Thursday, 27 October 2016

Plan now to make the most of upcoming super changes

The 2016/17 Federal Budget was the start of announcements to introduce sweeping changes to superannuation. The taxation arrangements are changing significantly and while the ability to build superannuation balances will be greatly hindered for some people, new opportunities are also available for others grow theirs. 

“No strategy previously created for clients can be assumed to be appropriate or complying from 1 July 2017 – revisiting those strategies and adapting them to new laws will be imperative for advisers and their clients,” says Liz Westover, Director with PwC Private Clients.

With most of these reforms taking effect from 1 July, 2017, the 2016/17 financial year provides one of the last opportunities for many to contribute to their super balances under existing laws, but importantly to get their superannuation affairs in order to be ready for the new era of saving in super.

There are opportunities for Australians to make provision for the new super laws to assist in maximising superannuation savings but it is vital to understand what the changes will be, how transitional arrangements impact clients and what opportunities are available in this current financial year.

Liz believes that “Planning is required now to make the most of opportunities available. Many options will not be available after 1 July, 2017 and preparation will be key to ensuring the transitional arrangements are utilised correctly and appropriately for clients. With the introduction of other new measures and increased thresholds, no client will be left unaffected by the new changes and for many their ability to grow their super will be enhanced.

Education for advisers is a must during this period. “All advisers need to consider how their clients will be impacted and how they might avail themselves of opportunities this year and in the future,” she warned. 

Liz and others will be discussing these changes at the ‘Superannuation – What You Need To Know’ half-day seminar on 29 November at Citywest Function Centre, West Perth. Clients will need to be guided through these changes, so for accountants and advisers, it’s game on. To learn more on how to assist your clients, receive the latest guidance from local and interstate experts, as well as the ATO at the event. Find out more.