Monday, 29 April 2013

New regulatory framework for financial advisers

The end of the financial year will soon be upon us with many law changes set to start on 1 July 2013. One of the most significant of these law changes is the new regulatory framework to apply to financial advisers who provide tax advice.

Since the Tax Agent Services (TAS) regime began on 1 March 2010, an exemption has been in place to permit financial advisers to continue to provide tax advice in the course of providing financial planning advice without complying with the TAS regime.

The Tax Institute has long held the view that financial advisers who provide tax advice in the course of providing financial advice should be subject to the TAS regime on the basis that it provides a mechanism for the protection of consumers of tax advice.

With the exemption due to expire on 30 June 2013, the Government recently released the "Creating a regulatory framework for tax advice (financial product) services" Exposure Draft.

As the Exposure Draft amends the Tax Agent Services Act 2009 to bring financial advisers into this regime, we are supportive of the overall intention behind the Exposure Draft. Our submission focuses on ensuring the policy objective of consumer protection is attained. One of our key concerns relates to the education and experience requirements that will be required of financial advisers who apply to register with the Tax Practitioners Board and become subject to this regime.

Shortly following the release of the draft legislation, the Tax Practitioners Board released a draft guideline on the "Australian tax law" requirements that financial advisers applying to the Board will need to meet. The Tax Institute is currently preparing its submission on this.

Members are welcome to provide any comments they have to us by email to Tax Policy.

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, 26 April 2013

Tax debate won’t win election

We continue our efforts to foster reviewed debate on our tax system, in particular ensuring GST is part of the debate. We acknowledge that such a debate now is not an election winner, but we are hopeful that the new parliament, whom ever that may be, will take the opportunity to start renewed discussion on the issue.

We need to find ways to maintain internationally competitive tax rates yet fund government policy objectives. I’m not here to push a barrow on what the government should or shouldn’t spend money on, that’s for voters to decide. What concerns me is the impasse between state and federal governments. We need to have a debate. We need alternatives explored.

In this regard I notice the comments made by Mr Richard Court AC at our National Convention in relation to the expected tax revenue to be generated by the LNG projects in Western Australia and how they could be used to bridge the gap between state and federal government. This may or may not be an answer but unless it is explored, debated, together with other options, we will continue to be the subject of inefficient taxes and risk Australia’s competitiveness.

I recognise the importance of our volunteer network and its alignment with our goals and vision. I will be writing to each state councillor to engage with them and get their valued input in respect to our goals. Consultation ensures our continued alignment and reinforces the strong links that exist within our Institute.

Thank you to those members who have made themselves known to me at various functions or conventions. I appreciate your feedback and your kind words. I know our staff and presenters do also, so please make yourself known.

Till next time.

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.

Tuesday, 23 April 2013

We reveal your election priorities

Last week The Tax Institute released the results of our member survey of election priorities. Thank you to all members who took the time to share their views.

We conducted an extensive media campaign to promote the results of the survey and we will continue to represent members’ interests in improving the tax system with key political stakeholders.

The question posed in the survey was: "With the federal election date set for 14 September 2013, what are the top three tax issues you regard as the most important for our political leaders to address?"

The responses show that the overwhelming priority amongst members is an equitable and sustainable superannuation system for the long-term. While the responses were gathered prior to the Government announcing its intended reforms to superannuation earlier this month, it is clear that if the superannuation tax system is to be changed, members want a real long term, sustainable plan for reform, not mere tinkering around the edges. When Governments tinker with the system this risks harming people's confidence in it and in putting their hard-earned money aside to save for their retirement.

Another top priority is the simplification of tax laws to alleviate the compliance burden on small business. The Government must continue the significant work that remains to be undertaken in this area. This includes exploring the possibility of creating a separate "small business entity" structure; streamlining definitions and access to small business concessions; and simplifying carry-forward loss integrity measures.

Also featuring as a high priority is the reform of State taxes supported by increased funding from the GST.  It is clear that tax professionals want the Government to take a leadership position on State tax reform, which includes increasing reliance on the GST and abolishing inefficient and complicated State taxes, such as conveyance duties and insurance duties.

The survey also found strong support for modernisation of the complex trust tax law provisions, as well as greater certainty in the application of tax laws by legislating unenacted measures sooner after their announcement.

Our media release with further details of the survey can be accessed on our website.

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.

Monday, 22 April 2013

Online membership renewals

2013-14 membership renewal

Being a member of The Tax Institute means you have demonstrated a strong level of technical knowledge of the tax system and the highest level of ethical and professional conduct. It is this “mark of expertise” which sets members of The Tax Institute apart.

I invite all members to maintain this mark and renew your membership online. All online renewals made on or before 14 June 2013 will go into the draw to win one of five $1,000 cash prizes in a Day to Day Account with HSBC Bank Australia.

Member survey findings

To ensure that we continue to be responsive to members’ needs, The Tax Institute once again participated in the Annual Business and Professions Study run by Beaton Research and Consulting. This survey measures member satisfaction, engagement, and the overall performance of the Institute, and benchmarks the Institute against other associations in the market.

Key findings suggest that the Institute continues to be a strong performer against other associations, ranking in the top two associations, a strong improvement off an already high base.

Previous years’ research indicated areas where improvements were required, particularly in the area of credentialing and recognition of membership. We took steps to address these findings and are pleased to see that the strategies we initiated have paid off. In particular, there are significant improvements in:

  • building the standing of members; and
  • providing valuable credentials, registration, certification and post-nominals.

We want to thank all members who provided feedback as this helps to confirm that we are moving in the right direction and ensures that we quickly respond to any areas needing improvement.

Annual report and AGM

The Tax Institute’s annual report will be available online from late March. The Institute’s AGM will be held on Tuesday, 23 April 2013, at the offices of The Tax Institute at 3.30 pm.

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.

Monday, 15 April 2013

Reform of excess superannuation contributions

The Federal Government’s announced superannuation changes are far from the major changes that were being road tested through the media in recent months.

While some of these changes are welcome, sustainability and equity in the system can only result from a long-term, holistic plan. When Governments tinker with the superannuation system it risks harming people's confidence in the system and in putting their hard-earned money aside to save for their retirement.

Turning to the Government’s announcement, it includes an acknowledgement of the long-held concerns of tax professionals with respect to the tax treatment of excess concessional superannuation contributions.

The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws so that inadvertent breaches of the contributions caps are not unfairly penalised. The current system is extremely and unnecessarily punitive. The proposed reforms will prevent most well-meaning taxpayers from being caught in the crossfire. Allowing voluntary withdrawals of excess concessional contributions and taxing the excess at the marginal rate will alleviate the current harsh consequences.

The Government’s changes to lift the contributions cap for Australians approaching retirement will bolster balances that may be too low to provide adequately for retirement. Additional capacity to contribute at the age and stage of life at which taxpayers have necessary savings will improve sustainability of the superannuation system. While the Governments’ stepping back from the promised increase in the cap to $50,000 is disappointing, the removal of the restriction to taxpayers with balances less than $500,000 is sensible.

Of course, it is important to remember that the announced changes are unlikely to be drafted into a Bill before this Parliament rises for the last time in late June 2013. This means that they will constitute the Government’s election platform for superannuation.


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, 12 April 2013

Voicing Institute concerns to Parliament

Well, celebrations have started for our 70th anniversary. We are the mark of expertise. We are the leading professional body in tax and we are 70 years young. What a future we have. I am so proud to represent The Tax Institute.

Robert Jeremenko and myself have just spent time visiting various Federal Members of Parliament, Senators and their advisors to convey the Institutes’ concerns on a number of tax issues. We were thankful for the time given to listen to our issues and will continue to foster debate and, hopefully, change in respect to an ever growing list of issues. Robert Jeremenko’s updates will keep you posted on the Institute’s activities in this regard. I was pleased to hear, during our conversations in Canberra, how well respected the Institute is.

Our annual conference has come and gone. Thank you to all who participated. I recommend a visit to our website to access the papers presented. I’m sure these will be used as a standard reference source for members as the quality was so high.

The Tax Institute welcomed the new Commissioner of Taxation, Chris Jordan, as he delivered his first public address at our convention.

We were pleased to hear his agenda and look forward to working with the Commissioner and his staff to improve the operation of our tax system.

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, 10 April 2013

Tax transparency: benefit or risk?

Last week the Federal Government released a discussion paper on three transparency proposals, including the public disclosure of taxes paid by corporate entities with an annual income greater than $100 million.  Disclosure will include the company’s name, ABN, total income, taxable income and tax payable.

Australia’s current international tax rules are based on out-dated concepts of source and residence. It is important that the Government focuses on revising our international tax rules in conjunction with our major trading partners to make sure that Australia collects an appropriate share of corporate tax.

Tax transparency may assist revenue authorities and policy makers to stay ahead of the curve. It may also better inform the Australian public.

However, tax transparency also risks causing widespread confusion.

By simply disclosing headline income and tax numbers, companies that have acted legitimately risk being unfairly tarred with the tax avoidance brush unless the Government fully explains the numbers.

It may also impact upon small businesses, as the $100 million transparency threshold is well within the Tax Office’s definition of SMEs, which is: those with a turnover of between $2 million and $250 million.

The Tax Institute will be formally contributing to the consultation on the Government’s proposals and any thoughts you would like to feed into this process are most welcome.

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.

Tuesday, 9 April 2013

Global Leaders in Tax meet in Australia

Last month, on 19 March 2013, Chartered Tax Advisers from The Tax Institute’s sister bodies in the UK and Ireland joined some of our own CTAs in Sydney for an exclusive networking event.

The event was hosted by KPMG and provided CTAs with the opportunity to hear from leading tax experts on the latest hot tax topics in Australian direct and corporate tax.

A great night!

Chartered Tax Adviser Networking Event
CEO of The Tax Institute Noel Rowland with CEO
of the Chartered Institute of Taxation (UK) Peter Fanning
and CEO of the Irish Tax Institute Mark Redmond [L-R].


Chartered Tax Adviser Networking Event

Chartered Tax Adviser Networking Event

Chartered Tax Adviser Networking Event

Chartered Tax Adviser Logo
Do you want to receive specialist recognition for your skills and attract new clients? Join The Tax Institute and become a Chartered Tax Adviser (CTA) to gain recognition in your field in Australia and overseas.

Monday, 8 April 2013

Why are we delivering a course in commercial law?


We interviewed Dale Pinto, CTA, the Professor of Taxation Law and Head of the Department of Taxation at Curtin Law School, the Chair of The Tax Institute’s Education, Examination and Quality Assurance Board, and board member of the TPB (2009 – 2012) (got all that?!) to present his views on why commercial law is critical to developing skills for tax professionals.

In the video, Dale also discusses the content and structure of the course, and what makes the Institute’s commercial law unique.

Course in Commercial Law
Approved by the Tax Practitioners Board (TPB), The Tax Institute can help you meet your specific education needs for registering as a tax agent with our new Course in Commercial Law.

Friday, 5 April 2013

Will you meet your CPD requirements before 30 June?

With 30 June fast approaching, we’d like to remind all voting members of your CPD obligations.

It is vital to ensure that you maintain your professional status by keeping up to date with all the developments in the tax system. CPD ensures that you stay abreast of all of the developments in the tax system to maintain the highest level of technical knowledge.

We have expanded our CPD offering using the latest technology to make it as easy as possible for you to meet these obligations. Download the CPD booklet to find out all the different ways you can meet these requirements.

Tax Knowledge eXchange – now with up to 17 CPD hours

To support members in meeting their CPD obligations, we have now added CPD to our online knowledge base, the Tax Knowledge eXchange. This is a simple way to keep up to date with the latest developments in tax and take care of up to 17 hours of your CPD requirements. Find out more about the service and register for your free trial on our website.

Course in Commercial Law

The completion of a Course in Commercial Law is now a minimum requirement for registering as a tax agent. More importantly, it is no longer possible for you to undertake and provide the services required as a tax agent without regular, and consistent, engagement with Australia’s commercial law environment.

Become the very best tax practitioner you can be by enrolling in the CommLaw2 — Entities and Business Structures unit before 15 April 2013.

Membership benefits – TaxLine

Make full use of your membership benefits. TaxLine is a completely free research service provided to members. Simply submit the issue you need more information on and our expert researchers will scour the vast resources at their disposal and send you information in the form of published commentary, articles, legislation and similar to assist you with your query.

We aim to get back to you in a maximum of five working days, but you can fast-track your request for an $80 fee. Please note that we cannot provide you with advice or an opinion.

iCPD – tax training and development you can do anywhere

You’re probably already familiar with our range of iCPD products. These allow you to obtain CPD hours from the comfort of your home or office. Need a refresher? Visit our YouTube page to view our new animation which details the range of options available to you.

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.

Tuesday, 2 April 2013

Reviewing Division 7A

As members have told me consistently, Division 7A has been a bugbear almost since its introduction into Parliament in 1997. As with many well-intentioned integrity measures, the ensuing years have resulted in ongoing tinkering and a continual game of catch-up. The result is our current Division 7A, which is riddled with significant complexity, unintended consequences and inappropriate or punitive application.

We welcomed the Assistant Treasurer’s announcement at our Annual NSW Tax Forum last year, that the Board of Taxation would be undertaking a post-implementation review into Division 7A. You can view our submission in response to the Board’s Discussion Paper.

In our submission we note that the underlying policy rationale of an integrity measure such as Division 7A remains relevant in our tax system of differing marginal tax rates. In order to fulfil this policy rationale, the operation of Division 7A should be restricted to the identified mischief. That is, only profits that are paid, loaned or in relation to which a debt is forgiven that are used for private purposes should be caught within the ambit of Division 7A.

On this basis, we have recommended that in addition to technical amendments that will simplify the current rules, the Board should consider recommending that the operation of Division 7A be restricted by way of a thorough examination of the Statutory Interest Model (please refer to our submission).

Of course, regardless of which model for reform is ultimately adopted, the unpaid present entitlements issue and narrow operation of the current Commissioner’s discretion will need to be adjudicated upon by the Board of Taxation and then the Government. If unpaid present entitlements were intended to be caught within Division 7A, the law should be amended to clearly prescribe such an outcome.

We look forward to the Government’s release of the Board’s final report in coming months.

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.