Friday, 1 July 2016

Alternate Dispute Resolution and Transfer Pricing - 49th Western Australian Convention

We spoke to Dr Niv Tadmore, CTA, a Tax Partner at Clayton Utz, who joins Andrew Orme of the Australian Taxation Office, about the session ‘Alternate Dispute Resolution and Transfer Pricing’, at the 49th Western Australian Convention in August.

Niv’s main areas of practice are in the public groups and international space, in particular large-scale projects, energy and resources, transfer pricing, alternative dispute resolution and ATO engagement.

In their session Niv and Andrew will look at the practical issues that arise when resolving transfer pricing disputes in the context of large-scale and complex transactions.

He pointed out “Some of the current issues facing practitioners include the funding and financing in transfer pricing arrangements. From the more ‘vanilla’ debt arrangements to the more complex finance and currency derivatives present new challenges in transfer pricing.”

Looking at how transfer pricing disputes interact with the Independent Review Function, Niv and Andrew’s session will also look at the role for ADR processes in working through issues.

Niv also pointed out that “The ATO have higher expectations of taxpayers - this manifests in the scope of the ATO's reviews which will often consider a taxpayer's Australian and global operations. It can also impact the timing and comprehensiveness of information requests by the ATO. Taxpayers and their advisors sometimes need to have good discussions with the ATO about scope and timing.”

The session will also provide an update on recent ATO consultation on transfer pricing dispute resolution options which both Andrew and Niv have both been involved in. Niv notes “The ATO seems increasingly confident in transfer pricing disputes, especially following the decision in Chevron and Orica, and in addition the ATO is of the view that Division 815B appears to give the ATO new and / or broader powers.” 1

Niv and Andrew will also present during the panel session ‘The Life Cycle of a Transaction in the Era of Constructive Engagement’, alongside Geofrey Fooks (Wesfarmers) and Jeremy Hirschhorn, CTA (ATO).

The 49th Western Australian Convention takes place 11-12 August 2016 at the Novotel Vines Swan Valley Resort. Choose from 21 sessions over two days, across two streams – SME & Corporate. Includes up to 13 CPD hours. Find out more.

1 Chevron Australia Holdings Pty Ltd v COT (No 4) [2015] FCA 1092. Orica Limited v Commissioner of Taxation [2015] FCA 1399.

Thursday, 30 June 2016

Inherited client problems: new clients, old problems… The 49th Western Australia State Convention

Often when taking on new clients, tax practitioners get lumped with a large inheritance. A large inheritance of old problems, that is. New clients, old problems seems to be an everyday experience for tax practitioners. Same same but different, right?

“Often a previous adviser may have unintentionally or otherwise acted in a manner that leaves issues which need to be addressed and often require realignment,” says Ken Schurgott, CTA (Life) of Brown Wright Stein Lawyers.

That ‘realignment’ or adjustment can range from a relatively innocuous self-amendment to a full-blown disclosure to the ATO and a consideration of significant penalties. Ken will be passing on his considerable experience in ‘Solving Inherited Client Problems’ at The Tax Institute’s 49th Western Australian State Convention on 11-12 August 2016. Ken will provide practical insights and options to manage these situations. “I’ll also be discussing what an adviser’s obligation is when a client presents with these issues,” Ken comments.

First, seek to understand

Dealing with inherited client issues is always difficult. Ken notes, “Understanding time limits for amendment is crucial, both in an advantageous and disadvantageous way. The delicate issue of whether there has been fraud or evasion will sometimes need to be addressed.”

When discussing issues with a new client, they will often need to be convinced that there is a need for amendment and that will often turn on being able to explain how time limits work for a range of taxes. Ken believes it’s vital to fully understand section 170 of the Income Tax Assessment Act 1936 and other provisions which deal with time passing.

But there is more in the tangle of tax laws which deal with fixing up past problems, and difficult interpretive issues often arise. For example, how do you apply the principles emerging from the Metlife case when the unlimited CGT amendment period is in question? [1]

“Then there’s the worst issue of the lot: what is to be done when it is you, or your firm, that has provided the bad advice,” Ken warns.

A roadmap to manage these issues

During his session Ken will look at past Div 7A non-compliance defective restructures, inefficient structures, non-compliance with the personal services income rules and exposures arising from alienated personal exertion income, as well as historical aggressive tax strategies.

Tax and Commercial Law Director with Schurgott & Co Lawyers, Ken Schurgott CTA (Life) is also Special Counsel with Brown Wright Stein Lawyers, Sydney. He has extensive experience in all aspects of tax, as well as business structuring, business sales and acquisitions, asset protection, trust and estate law. Until recently he was a member of the Advisory Panel to the Board of Taxation.

Ken will also be running a workshop session at the Convention, ‘Exiting Business Structures’, which will illustrate some of the more difficult issues in selling to third parties, transferring control in a corporate joint venture, accessing cash without disproportionate tax liabilities, and using concessional tax treatments.

Hear the latest thinking on inherited client problems, exiting business structures, and a wide range of other topics at the 49th Western Australian State Convention taking place 11-12 August 2016 at the Novotel Vines Swan Valley Resort. Choose from 21 sessions over two days, across two streams – SME & Corporate, and includes up to 13 CPD hours. Find out more.

[1] Metlife Insurance Ltd v Commissioner of Taxation [2008] FCAFC 167.

Tuesday, 28 June 2016

The opportunities for a common charity definition: Australian Charities and Not-for-profits Commission

For the first time, the Australian Charities and Not-for-profits Commission (ACNC) have been invited to present at The Tax Institute’s States’ Taxation Conference, taking place in Darwin in July 2016.
David Locke, Assistant Commissioner, Charity Services at the Australian Charities and Not-for-Profits Commission spoke to us about why the time was right for the ACNC to speak directly to practitioners on charity related taxation issues.

David said ‘The ACNC works closely with the State and Territory Offices of State Revenue but have not previously engaged with The Tax Institute to a significant extent. My presentation, with Nicole Rowa, also of the ACNC, is an important next step in the ACNC’s relationship with the Offices of State Revenue. These relationships have helped us to understand the differences in the legislation and regulations that impact on the taxation concessions available to charities’.

‘The ACNC is presenting on the opportunities for a common charity definition. The definition of charity has an impact on a number of Commonwealth and state regulators, but we are obviously focussing on the taxation revenue impact on the states’, he said.

‘We will be asking delegates to think of the charity taxation environment as having two distinct stages; the Charity Determination stage and the Tax Assessment stage. We are proposing that the Charity Determination stage be undertaken by the ACNC and the Tax Assessment stage by the Commissioners of State Revenue. We hope that attendees will see the value to regulators, charities, the public and the beneficiaries of charities in the model that we are proposing’.

David mentioned ‘The new model that the ACNC is proposing for managing charity determinations will be a significant change and is a hot topic in itself. We are proposing a model that we believe will make life much easier for charities without compromising the Commissioners of State Revenue’s jurisdiction to determine which charities receive tax concessions. The model proposed means that once they are recognised as a charity by the ACNC, this status has universal application for all Office of State Revenue and other state and territory purposes. Under this model, the Professional delegates (as opposed to Government delegates) will still need to understand the particular state and territory charity Tax Assessment rules.’

Looking at the wider conference, David told us he was particularly keen on catching the panel discussion on ‘Tax Reform – the Federal/State Interplay’, with Robert Carling, Senior Fellow, Centre for Independent Studies, Rob Schwarz, SA Dept of Premier and Cabinet and The Tax Institute’s Stephanie Caredes, CTA. He told us ‘the session has direct relevance to the role of the ACNC. One of our statutory objects is to promote the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector. This involves us having direct relationships with the not-for-profit regulators, which are mainly the states and territories’.

David is a qualified lawyer who has served as a board member and volunteer of a number of charities and not-for-profits. David was formerly the Executive Director of Charity Services at the Charity Commission of England and Wales. David has worked as an adviser to several international governments on the regulation of non-government organisations. A keen traveller, David mentions he’s looking forward to a break in the warm weather in Darwin, and enjoys spending time exploring the many beautiful destinations Australia has to offer. He also loves cinema and theatre of all types.

Find out more about David and Nicole’s session on our website, where you can explore the rest of the program.

The 16th Annual States' Taxation Conference takes place 27-29 July 2016, at the Darwin Convention Centre. Find out more.

Monday, 27 June 2016

‘The Nature of a State Tax Appeal’ - David Marks, QC, CTA at 2016's States’ Taxation Conference

The States’ Taxation Conference remains the only national conference covering all State and Territory taxes in one technical program. We spoke to David Marks, QC, CTA, a commercial silk, specialising in tax who will present the session ‘The Nature of a State Tax Appeal’ on day two of the conference, to be held in Darwin in July.

David tells us that his session will help practitioners ‘understand which way to go when setting up an appeal, and how different types of matters need to be set up for appeal differently’. His session will look at the differences in the nature of an appeal from a tribunal, to an appeal panel of the tribunal, from a tribunal, to a court and from a court, to a superior court.

David’s session will look at how the basis of appeal may be discerned from the legislation, the difference between the court substituting its own decision, and the court giving directions to the decision maker, as well as providing guidance to the likely participants in these sorts of appeals as to the different approach to evidence or issues that are relevant for these different contexts. 

He mentioned that by ‘front-ending consideration of where a matter might go, you can negotiate more effectively for your client’ and that his session is designed to give delegates ‘a new perspective on how to approach matters’.

Affiliated with The Tax Institute since 1991, David sees the States’ Taxation Conference as one of those events that is ‘required attendance for all in the profession’. Amongst the rest of the program, David is particularly looking forward to Nicholas Clifton, CTA, and Jacqueline Wood, CTA, both of Deloitte and Shaun Pearson of the Department of Treasury and Finance Territory Revenue Office presenting the Cases and Legislation Update.

When he’s not knee-deep in tax, David is keen on chess, art and music, and when he is, he appears in Court as a specialist advocate, giving tax advice informed by his appearance practice. He was called to the Bar in 2000, taking silk in 2015, before which he worked in tax with a large firm of solicitors for 10 years. David has appeared for and against the revenue, as well as in the equitable, administrative law and commercial jurisdictions of the State and Federal courts, and in Tribunals.

The 16th Annual States’ Taxation Conference takes place 27-29 July 2016 at the Darwin Convention Centre. View the full program on our website.

Thursday, 23 June 2016

49th Western Australia State Convention

Move over Masterchef, there’s a new and more pertinent Masterclass in town.

An exciting addition to an already stellar line-up at the 49th Western Australia State Convention is the M&A taxation masterclass-style session on day one. With more and more companies looking to consolidate to rationalise operations, the main elements of Australia’s M&A-focussed tax code will continue to cause concern for tax advisers and their clients. The appetite for knowledge in this space continues to grow alongside the level of M&A activity in Western Australia, despite whispers that the economy is set for a downturn.

Read on to discover what’s on the menu for M&A at the convention, along with the rest of the program, designed to suit every appetite.

The bread and butter of it all…

As 2 July draws closer, many practitioners – and members of the public – are asking themselves what Australia’s GST and superannuation system will look like post-Federal Election. As with all areas of tax, these ‘bread and butter’ taxes will continue to morph according to the political landscape. Jemma Sanderson, CTA (Cooper Partners) and Tony Ince, CTA (RSM Australia) will unpack the day-to-day issues facing SME practitioners, as well as highlight potential risks and action items required for clients on day two of the convention.

Other bread and butter issues that will be brought to the table include Division 7A, unpaid present entitlements (UPEs) and a cheeky insider’s perspective on how to effectively run an AAT case. The keynote address from Justice Pagone on the current trends in tax disputes and the update from Inspector-General of Taxation, Ali Noroozi, are also two not-to-be-missed sessions for every practitioner.

This year’s convention also captures tax issues with a uniquely Western Australian flavour. The Hon Dr Mike Nahan, MLA, WA State Treasurer will discuss the opportunities and challenges of tax reform from a purely Western Australian perspective whilst Nicki Suchenia, WA Commissioner of State Revenue will outline the new and upcoming changes at State Revenue that will affect practitioners.

Finally, don’t miss our workshop session, Exiting Business Structures, in which Ken Schurgott, CTA-Life (Brown Wright Stein Lawyers) gets to the meat of the issues in advising successful clients about selling to third parties, transferring control in a corporate joint venture, getting access to funds without disproportionate tax liabilities, using concessional tax treatments and more.

M&A taxation: roasting old chestnuts

The key pillars of Australia’s M&A tax consolidation system has been in place for over 10 years, yet issues such as scrip-for-scrip rollover, consolidation, demergers and transaction-related distributions still continue to challenge advisers. The question is, why?

Australia’s tax consolidation regime is undoubtedly extremely complex and incredibly complicated. But the answer may just lie in the resurgence of M&A tax-related transactions in Australia. M&A activity fell silent in the years after 2008 but is making a comeback. Last year alone saw a 15% increase in the level of M&A activity in Western Australia compared to the previous year, where, interestingly enough, the bulk of transactions fell within the middle market space.*

With buy-side and sell-side transactions in Western Australia alone on the rise, tax advisers who were once shielded from M&A activity will now likely face a barrage of new tax issues stemming from those transactions. Join Nick Heggart, CTA (Greenwoods & Herbert Smith Freehills) for an in-depth, masterclass-style session focused on the major M&A issues that continue to cause concern for tax advisers and their clients, which will also incorporate several case studies to tease out the issues.

An expanded menu for the big end of town...

2016 brings a new corporate stream for the larger end of town and corporate practitioners. Hot topics such as tax transparency, the life cycle of transactions from the ATO’s standpoint, stapled entities, transfer pricing and the raft of new changes associated with multinational and anti-avoidance legislation (MAAL) will be analysed and unpacked at this year’s convention.

Respected speakers have been invited to dissect these topics with delegates, including Jeremy Hirschhorn, CTA (Deputy Commissioner, ATO) who will discuss focus areas and priorities for the large market, highlighting how companies can manage and benefit from greater tax transparency.

This year, the convention will also host a new Q&A session, encouraging open dialogue between delegates and speakers on the activities of the Board of Taxation and the Administrative Appeals Tribual (AAT). Stephen Frost, FTI (AAT Deputy President) and member of the Board of Taxation, Craig Yaxley, CTA (KPMG) will facilitate this interactive session.

A special panel session, ‘The Life Cycle of a Transaction in the Era of Constructive Engagement’ sees Geofrey Fooks (Wesfarmers), Jeremy Hirschhorn, CTA, (ATO), Andrew Orme, ATO and Dr Niv Tadmore, CTA (Clayton Utz) focus on practical insights from the life cycle of a transaction in the public groups and international (PGI) market using a case study as a practical reference point.

Join us

With the Federal Budget and Federal Election done and dusted by the time of this convention, tax advisers will be left with a new tax landscape and grappling with the issues that heightened M&A activity will bring, as well as continue to tackle the complexities of superannuation and GST.

The 49th Western Australian Convention takes place 11-12 August 2016 at the Novotel Vines Swan Valley Resort. Choose from 21 sessions over two days, across two streams – SME & Corporate. Includes up to 13 CPD hours. Find out more

*Pitcher Partners ‘Western Australian M&A: A year of consolidation, rationalisation and new beginnings’ (March 2016)