Thursday, 28 March 2013

Recognising effective consultation

Our tax counsel team and I were reviewing the new legislation, the Inspector-General of Taxation’s report of his Review into improving the self-assessment system, and emerging press releases related to superannuation.

The response: a series of timely press releases and media engagements leading to a number of quotes in the national press.

This is what happens when our volunteer members and our professional staff work effectively to deliver great outcomes. As president, I was extremely proud and grateful for the work done by all.

This is why The Tax Institute is the leading professional body in taxation.

As I visit various states, I continue to be impressed by the depth of our membership.

Of great interest to me is the number of hours we invest annually in consulting with government or government bodies.

Clearly, effective consultation with tax professionals, business and the community leads to better government policy and tax law design. As the leading professional body in tax, we are pleased to contribute to this process.

As part of this process, it is essential to recognise that effective consultation requires:

  • sufficient time for consultation;
  • the ability to adequately resource the process;
  • constructive opinions and contributions; and
  • feedback.

As with many such processes, participants should seek continuous improvement where possible. Nevertheless, of all potential improvements, the last issue above is of the greatest concern to me.

The Tax Institute engages in consultation on a voluntary basis and enlists both staff and volunteer members to provide our contribution.

In most cases, this involves travel costs and members contributing their professional time, both via attending meetings and preparing submissions. The Institute also engages our tax counsel staff to do a lot of heavy lifting in this regard.

At the moment, the effect of this input is unclear in most cases due to an absence of feedback from the decision-makers — whether that is Treasury, the ATO or another government body.

I am disappointed by the lack of feedback that we receive from our involvement in the process. Feedback is generally limited to thank you for our participation.

Feedback, in my book, consists of a constructive response to the inputs received. Such feedback changes behaviour and improves the process for the next consultation. Our members working on these projects are senior professionals and their input warrants appropriate acknowledgment and response.

I will be engaging with senior Treasury, ATO and other government staff to discuss this important issue and drive improvements to the consultation process. Our members deserve to know where they stand, and why, so that we may also improve our consultation efforts and ensure an effective return on member contributions.

I remain ever hopeful.

Stephen
Westaway
Stephen Westaway is President of the National Council at 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.

Wednesday, 27 March 2013

The operation of Div 7A rules – download four free case studies

Download a copy of four free case studies [PDF] taken from the Division 7a Handbook 2012-13 that illustrate several aspects of the operation of the Div 7A rules and possible implications.

The four case studies from the handbook cover:

  • loan and payment by company
  • payment to trust
  • unpaid present entitlement, and
  • use of company assets.

In addition, the handbook also covers the following case studies:

  • distributable surplus
  • unpaid present entitlement and the operation of TR 2010/3 and PS LA 2010/4, and
  • unpaid present entitlement created after end of income year.

Download the case studies [PDF], and purchase your copy of the Division 7A Handbook 2012-13 from our website today.


Division 7A Handbook
Division 7A Handbook
2012-13
John Gaal of TaxCounsel is the author of our Division 7A Handbook 2012-13.

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.

Monday, 25 March 2013

SME considerations for tax law

At The Tax Institute’s recent National Convention, much of the discussion and technical output was focussed on the multitude of tax issues in the SME sector.

As politicians love to say, small business is the backbone of the Australian economy, responsible for approximately half of all private sector employment of the Australian workforce.

However, as demonstrated by the raft of tax issues raised and discussed at National Convention, the SME sector continues to be strangled by excessively complicated tax laws which are themselves littered with cumbersome "integrity provisions". We remain concerned with this complexity and continue to advocate for the need to consider the unique investment, business and funding considerations that arise in the SME sector when writing tax laws.

To this end, we recently made a submission to the Productivity Commission with respect to their inquiry into "Regulator engagement with small business".

In our submission we highlighted the need to:

  • consider the impact of ATO practices and procedures; 
  • consider the effectiveness of tax measures intended to benefit small business; and 
  • maintain momentum on simplifying complex tax laws (such as Division 7A, taxation of trust income provisions in Division 6 and the personal services income rules).

In addition to the above, we call for an examination of creating a separate entity for small business, that is, an entity into which existing structures can be rolled over, allowing for the benefits of discretionary trusts (such as streaming and the CGT discount) and/or retention of profits. Such an entity will corral many currently available tax advantages into one entity that can be administered more simply and effectively by taxpayers, tax agents and the ATO alike.

We look forward to continuing our engagement on these issues in the months to come.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior 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.

Friday, 22 March 2013

Tax Knowledge eXchange – now with up to 17 CPD hours

Complimentary technical paper for members

This month’s complimentary technical paper for members provides an update on tax risk and corporate governance.

Have you used the Find a Tax Specialist service?

Make the most of your membership with The Tax Institute by promoting your services and specialities through our online Find a Tax Specialist listing so that potential clients can find you.

To set up your listing, simply select the “Show as Tax Specialist” option in your profile to add yourself to the listing or visit our website to find out more.

Asset protection online training

On 28 March 2013, the Institute will be hosting two asset protection webinars, including “Protecting assets before marriage” and “The Divorce — tips and traps to ensure a tax-effective separation”. Register now and top up your CPD hours without leaving the comfort of your office.

Superannuation roadshow

If you’re looking for a practical update on the latest superannuation news and developments and if you would like to learn about new superannuation strategies and opportunities for your clients, you can’t afford to miss The Tax Institute’s popular superannuation roadshow.

Register now for March and April seminars in Adelaide, Brisbane, Darwin, Melbourne, Perth, Sydney and online.

Tax Knowledge eXchange – now with up to 17 CPD hours

We’re pleased to announce that our online tax knowledge base, Tax Knowledge eXchange, now includes up to 17 CPD hours. Your subscription not only gives you access to the latest papers and presentations from our events, articles from our leading journals, news and commentary, but also includes seven CPD hours.

With both our online books and online research options including five CPD hours each, that’s a total of up to 17 CPD hours included, depending on your subscription.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer 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.

Wednesday, 20 March 2013

What is iCPD? Watch this video to find out

What is iCPD? It's tax training and development that you can access from your desk.

We understand that your time is valuable. That's why we've developed a range of web-based CPD options designed to suit the needs of the busy tax professional and complement our regular face to face sessions.

To understand how you can save time, and boost your CPD hours, with online tax training from The Tax Institute, watch the below animation.



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.

Monday, 18 March 2013

Tax Commissioner addresses National Convention in Perth

Last week The Tax Institute held its 28th National Convention in Perth. There were three action packed days of sessions and it was fantastic to be able to speak with so many members as they interacted with the tax profession's best practitioners.

In addition to the fantastic tax technical sessions, we also enjoyed keynote speeches from the core disciplines of law, public administration, business and politics.

These included the first keynote speech by Tax Commissioner, Chris Jordan AO. The Commissioner outlined his plan to address long-held concerns over perceived bias in the Tax Office appeals process and place renewed focus on producing timely guidance on emerging tax law.

Tax Commissioner, Chris Jordan AO, presenting at
28th National Convention.

The Tax Institute welcomes this, as currently the ATO is the judge, jury and executioner in determining the fate of taxpayers, with the expensive Court and Tribunal process left as the only other taxpayer recourse.  Access to an independent and relatively inexpensive appeals process will bolster taxpayer confidence in the integrity of our tax administration system.

In another positive step, the Commissioner announced a renewed focus on producing timely ATO guidance on emerging tax law and a renewed commitment to the tripartite tax law design process.

Whenever changes are made to tax law, the pertinent question on taxpayers’ minds is “How will the Commissioner administer the new law?” A specific ATO focus on providing a timely answer to this question will go a long way towards reducing uncertainty for individual taxpayers and businesses alike.

Tax law design produces best results in a tripartite consultation setting, when the ATO, private sector tax experts and Treasury address tax policy and implementation matters collaboratively. We have long advocated for well-resourced tripartite consultation focussed on developing laws in the national interest, so we look forward to working with the ATO and Treasury to ensure those members with the necessary expertise are involved in this process.

A greater focus on resourcing this process and providing timely input from both the administrator's perspective and from the Treasury will produce more effective tax laws the first time around - with fewer surprises and lower compliance costs for taxpayers and the Government alike.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior 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.

Friday, 15 March 2013

A hard day’s work

As national president, I attend a number of conventions and professional development forums during the year. First off the block was the Financial Services Taxation Conference in Queensland.

I have to take my hat off to the presenters, the convention organising committee and, of course, our conference staff.

It was an impressive conference, and full credit must go to the presenters. How many times have you volunteered your time to deliver a presentation, written the paper in time for it to be printed, completed your PowerPoint presentation, then arrived at the conference only to find out that the subject you are talking on has just had a major update? Well, the Financial Services Taxation Conference was one of those times.

As the speakers were arriving at the conference, the Assistant Treasurer, the Hon. David Bradbury, MP, was introducing the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 into the House of Representatives, containing amendments to Pt IVA and the transfer pricing rules. At about the same time, the OECD released its Addressing base erosion and profit shifting report.

The outcome: presenters were reviewing legislation and releases and amending PowerPoint presentations.

The response: high-quality presentations delivering up-to-the-minute informed consideration of issues at hand.

Thank you, you were all amazing.

In the meantime, I hope to see you in Perth at the National Convention. Please introduce yourself to me. I’d love to hear your views.

Stephen
Westaway
Stephen Westaway is President of the National Council at 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.

Wednesday, 13 March 2013

Tax and alcohol...how do they mix?

The Tax Institute invites you to attend our brand new convention, "Tax Through the Bottom of a Glass", which has been carefully designed to give you the best possible technical content, while at the same time providing ample opportunity to network with the presenters and your fellow delegates.

You have worked hard to attract and retain your most entrepreneurial clients who are pioneering new products or new markets. Now, as their businesses grow, they are taking you with them into unchartered waters where you will encounter various taxation issues and opportunities of which your clients may not yet be aware. In fact, many taxation issues that might have been perceived as only for the "big end of town" can be highly relevant to small and medium, and even micro enterprises in any industry.

Working with your clients to discover and deal with their "unknown unknowns" will both challenge and reward you.

The alcohol industry is a perfect environment in which to look for tax unknowns that may impact on enterprises of any size. The industry may still be dominated by a few giant corporations, but at the same time there is a consumer movement back to wine from small wineries, craft beers and spirits, and renewed interest in cider, mead and other things given to us by Bacchus.

There are many small, medium and micro enterprises active in the industry – and they can face many of the same taxation issues and opportunities as the industry giants.

Our impressive line-up of speakers for this conference includes:

  • Dr Michael Dirkis, CTA, University of Sydney
  • Bill Lark, Founder of Lark Distillery 
  • Gil Levy, CTA, Gilsons Chartered Accountants and Chartered Tax Adviser
  • Dr Kerrie Sadiq, CTA, Queensland University of Technology.




Express your interest and reserve your place early, as the limited number of places available will sell out quickly. Early bird registration closes on Friday 22 March so register now or contact Megan Hough on 03 9603 2000.

Monday, 11 March 2013

Changes to Part IVA and Transfer Pricing reforms

Members will recall that last month the Federal Government introduced a Bill to implement changes to Part IVA and the second phase of the Transfer Pricing reforms. The Bill is titled: Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013.

Whilst it is yet to be debated in Parliament, it has been referred for further examination to the House of Representatives Standing Committee on Economics; The Tax Institute has made a submission to the Committee.

With respect to Part IVA, we support the maintenance of a robust general income tax anti-avoidance rule to ensure that tax is levied fairly, consistently and according to the policy intention of the tax laws.

However, the amendments in the Bill are an unnecessary overreaction to recent Court cases and not required to maintain the integrity of the system. Furthermore, we are concerned that the Bill as drafted will bestow excessively wide powers on the Commissioner to levy tax on the basis of an unreasonable alternative postulate. Such an unconstrained power will result in an inappropriate erosion of taxpayer rights and create potential for undesirable behavioural changes.

On transfer pricing, The Tax Institute is supportive of the Government's efforts to align our transfer pricing laws with OECD Guidelines. However, we are concerned that the Bill as currently drafted will:

  • bestow unnecessarily wide reconstruction powers on the Commissioner leading to taxpayer uncertainty;
  • impose excessively high documentation requirements, especially on small to medium enterprises; and
  • unnecessarily broaden the scope for penalties to apply.

Our submission contains a number of recommended amendments for the Committee's consideration.

The Government intends to debate the Bill in time to pass it through both houses of Parliament by 21 March 2013.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior 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.

Friday, 8 March 2013

New Course in Commercial Law

In line with the changes to tax agent education requirements from 1 March 2013, The Tax Institute has this month launched a commercial law course for those tax professionals who require this field of study to register as tax agents.

The Course in Commercial Law has three units available and specific “modules” which relate to Tax Practitioner Board (TPB) required topics. The units are delivered via distance, supported by webinar tutorials and a course convenor.

Now enrolling for the Chartered Tax Adviser Program

We have received a great response for the first intake for our Chartered Tax Adviser Program courses — CTA1 Foundations, CTA2 Advanced and CTA3 Advisory. You and your staff can enrol now in these practical and relevant courses for study period 2, 2013.

In particular, if you are considering becoming a Chartered Tax Adviser (CTA), ensure you enrol in the one and only CTA3 Advisory Exam in 2013 which will be sat on 27 August 2013.

The CTA3 Advisory Exam is the assessment-only pathway for leaders who wish to take the ultimate challenge and obtain the globally recognised CTA designation.

Join us in Perth at the 28th National Convention

This year’s National Convention promises to be bigger and better than ever. Join us in Perth from 13 to 15 March and catch up with your colleagues, make new connections and hear from the best and brightest in tax. For those already registered, we can’t wait to see you again.

And if you can’t make it all the way to Perth, follow @TaxInstituteOz on Twitter or like us on Facebook for live updates throughout the event.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer 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.

Thursday, 7 March 2013

Everything you need to know about super in 2013

Three minutes with Jemma Sanderson, CTA, the author of our SMSF Guide 2012 and Director at Cooper Partners Financial Services, who is presenting at our upcoming superannuation seminars.

What hot topics will you be covering?

The last six months has seen some great guidance from the ATO, as well as draft legislation with respect to pensions and the pension exemption.  We have been waiting impatiently for such guidance since the release of TR 2011/D3 in July 2011, so there will be a bit of time spent on this area, as well as the ATO’s practice when a fund fails to pay a minimum payment in a particular year.

Contributions are always a hot topic, so I’ll also be outlining some new areas to watch in that space.

What can participants expect to take away from the day?

Some practical tips and traps for them to apply to their client bases with respect to pensions and contributions, as well as consideration of the opportunities available. We often concentrate on what the legislation says we can’t do, rather than what we can do in terms of planning in SMSF’s.

What do you enjoy most about presenting at the roadshows?

It’s always great to see new faces around the country and chat to the delegates about the sorts of issues they are facing in this space. Often a quick chat can lead to a solution for a client, so that is always a positive.

Give your CPD hours a boost - don’t miss the 2013 Superannuation Roadshow, coming to a capital city near you in March and April. Also available as a webinar.

Jemma Sanderson
Jemma
Sanderson
Jemma Sanderson, CTA is the author of the SMSF Guide 2012 and Director at Cooper Partners Financial Services.

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.

Wednesday, 6 March 2013

Inviting you to the 2013 Private Business Tax Retreat

It is with great delight that we extend to you an invitation to participate in the 2013 Private Business Tax Retreat.

Building on the success of the Private Business Tax Retreat in recent years, we have once again put together a challenging, unique and interactive programme that gives direction, resolutions and outcomes to critical questions that are asked of private business tax advisors with a specific focus on CGT small business concessions.

On the first day of the Retreat, the programme will address the following key topics:

  • when your client sells assets from a trust – the key issues to raise with your client and what you need to be able to answer 
  • when your client sells the business – the key issues when signing off internally and how to direct your client 
  • what you need to know about contemporary issues impacting private business at the moment.

The day will conclude with a wrap-up, providing The Tax Institute’s view of critical private business tax issues.

On the final day of the retreat, prominent practitioners will participate in a forum on the critical reform of the taxation of private business, followed by a final workshop session on maximising retirement CGT concessions.

Hear from leading professionals in their respective fields including:

  • Ken Schurgott, CTA – Schurgott Noolan 
  • Brian Richards, CTA – BDO 
  • Mark West, CTA – McCullough Robertson 
  • Mark Robertson, CTA – Barrister at Law 
  • Fiona Dillon – Australian Taxation Office 
  • Keith James – Board of Taxation 
  • Allan McPherson, CTA – McPherson Super Consulting

There has been a high volume of interest for the 2013 Private Business Tax Retreat; don’t miss this opportunity to attend this unique and interactive program.

Download the brochure and register before the 25th of March to receive the early bird discount.

The Tax Institute is the leading provider of tax education for tax professionals and provides tax training through continuing professional development (CPD) activities as well as The Chartered Tax Adviser Program courses.

Monday, 4 March 2013

A fair share of company tax burden

In the context of multinational taxation, the Federal Government’s phrase of choice seems to be: "fair share".

The Tax Institute welcomes the Government’s recognition of the need to update current international taxation laws in conjunction with our treaty and major trading partners. The integrity of the tax base is essential to making a lowering of the company tax rate possible.

An internationally co-ordinated effort to tackle tax avoidance and re-examine the relevance of existing source and residence doctrines is essential to ensure that Australia’s international tax and treaty network adequately addresses the challenges posed by the increasingly digital international economy and levies taxation on the economic substance of the transaction.

Nevertheless, consideration of the current activities of multinationals and any proposed changes to tax laws need to take into account the challenging and competitive circumstances faced by businesses operating in an international environment.

In Australia, where the company tax typically acts as a withholding tax due to the imputation system, concepts of a "fair share" of company tax burden need to be tempered by recognition of the high level of share ownership amongst Australians either directly or via superannuation investments (and the resulting flow-through of franking credits). Furthermore, a wealth of evidence suggests that the incidence of company tax falls on capital owners in the short to medium term and on labour in the longer term.

The effect of such changes in tax laws on inbound investment and potential flow-on ramifications of changes in tax treatment by our trading and treaty partners of outbound investment also need to be appropriately taken into account.

Any efforts to increase transparency that allow tax authorities to properly understand taxpayer circumstances and apply tax laws correctly and in a timely fashion is welcomed, but not at the cost of an increased regulatory burden.  Every effort should be made to ensure that the current information gathering powers of the ATO are not duplicated or excessively complicated.

We recently raised this as one of our Federal Budget priorities and you can read the full Budget submission.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior 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.