Friday, 31 May 2013

Updates from the National Tax Liasion Group

We continue to monitor and respond to changes to the Tax Agent Services Act 2009, in particular the registration and educational requirements for tax (financial product) advisers. We note that the standard is currently set for tax agents and wish to ensure that consumers continue to be afforded a high level of protection by ensuring that the educational and ethical standards are maintained.

I attended the National Tax Liaison Group (NTLG) meeting with the Commissioner of Taxation and his senior staff. The new Commissioner’s views, expressed at our National Convention, were again articulated in his address to the NTLG. Importantly, this included the ATO’s review of its external consulting arrangements. It was pleasing to see that the view I expressed, in a previous President’s Report, about consultation being a genuine two-way process, is included in the review, along with other concerns expressed by The Tax Institute. We look forward to being part of this review. We continue to have fruitful discussions with regard to obtaining greater clarity around the ATO’s view on various aspects of tax legislation.

The Inspector General of Taxation (IGT) made reference to this in his review into improving the self-assessment system. He noted that “the ATO had not given full effect to the ROSA recommendations in relation to making ATO advice more accessible, timely and binding in a wide range of cases”. This is of concern as the rate of new or amended legislation continues to grow.

The IGT recommended better synchronisation of the release of legislation with ATO public binding advice — an approach the professional bodies have instigated in relation to the application of Pt IVA. We will continue to push this process as part of tripartite consultation practices with the ATO, Treasury and affected parties. We would appreciate feedback on other areas of tax law that you think would benefit from further public guidance via the same approach.

On a final note, thank you to all who contributed to our 28th National Convention in Perth. It was a pleasure to be part of such a well-organised and attended event. The feedback on the quality of papers confirms the continued high standard of delivery from our presenters. Congratulations to Ken Schurgott, CTA, who was awarded life membership for his services to The Tax Institute. I fully endorse this award as I know the enormous amount of time donated by Ken, not only during his year as president, but also in the many years prior to that.

At our National Convention, we formally acknowledged our 70th anniversary with a video presentation recognising our achievements during this time. Hopefully you will all get to see the video and help us celebrate at other functions during the year. We are 70 years young.

I look forward to next year’s 29th National Convention in Hobart from 26 to 28 March 2014. Please put it in your diary now.

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, 29 May 2013

Growing the recognition of CTA in Australia

At our National Convention in March, I launched our plans to raise the profile of members and the Institute through the Chartered Tax Adviser (CTA) and our new “T is for Tax” campaign.

As you would know, CTA is Australia’s only internationally recognised tax designation. Earn it and you’re in a network of thousands of tax professionals worldwide, recognised for leadership and expertise. It means you’re the best of the best.

I want to let you know our plans so that, over the coming months and years, you will recognise our progress and perhaps help us along the way.

From May, you will begin to see the first wave of the “T is for Tax” campaign on online channels. From there, we plan to extend the campaign further.

You can watch the new CTA promotional video below and view examples of some of the planned advertisements on our website.

We have also developed some of these messages on posters which I encourage you to print and display in your office so that your clients can see what sets you apart.

“T is for Tax” positions members and The Tax Institute as the leaders in the tax profession and grows the CTA designation by association.

With your help and our marketing, the CTA will be the sought-after tax designation in Australia, as it is today in the United Kingdom, Ireland and beyond.

I will keep you informed of our progress and more updates as they are at hand.

Are you missing out on the conversation?
If you’re not following The Tax Institute on social media, you could be missing out. Join the conversation — like us on Facebook and tweet us @TaxInstituteOz.

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, 28 May 2013

3 Duxes agree: CTA2 Advanced gives you CONFIDENCE

We caught up with 3 duxes of our CTA2 Advanced course (previously known as the Certificate in Applied Tax) to understand how the course has helped them.

Tammy Tang (CTA2 Advanced course dux)

“The CTA2 Advanced course has given me the confidence to assist our clients on a broad range of Australian tax issues.

The CTA2 Advanced course convenor and the course tutors are very knowledgeable and were helpful in assisting me with difficulties I encountered during the course. Being able to obtain their insight on how the law applies in a practical situation is a valuable aspect of the course.”

Clinton Lindqvist (CTA2 Advanced course dux)

“The CTA2 Advanced course has helped me to be more structured in my approach to tax-related issues and, through the use of the research-based model, has given me the confidence to prepare advice in areas of taxation that I was not previously confident in.

I now apply it to every advice assignment I am involved in.”

Ryan Curry (CTA2 Advanced course dux)

The most valuable aspect of the CTA2 Advanced course that I have taken away “would have to be the confidence to deal with client questions and issues knowing that my base knowledge on taxation is up to date.

It is also the understanding I have when and where a taxation issue exists – even when working with limited information.”

The CTA2 Advanced course builds confidence because it deals with real-world tax concepts and issues for aspiring tax industry practitioners who want to stake their claim as a technical tax expert and wish to take the next step in their career by dealing with more complex tax issues.

Study period 2 is now open for enrolments.

Monday, 27 May 2013

Finally – a mature debate on GST

The Federal Coalition’s proposed tax policy white paper marks the beginning of a mature political debate on the role of the GST in our tax system. The time for political scaremongering on the GST is over, with the sustainability of Australia’s tax base at stake.

We have long argued the need for a genuine public discussion on reforming Australia’s tax system, which must include the GST. As recent events have shown, our current tax base is dangerously exposed to changes in domestic and international economic circumstances. Australia’s tax base must be robust and capable of withstanding cyclical shifts.

Without reform, our tax system will not be able to provide sufficient revenue to meet the significant spending commitments of the coming years. Worse still, our current tax system continues to hamper economic growth, with State taxes such as stamp duties on homes and insurance duties amongst the most inefficient taxes in the country.

We know that 90% of the entire tax take in Australia is generated by only 10 taxes, with an additional 115 taxes generating the remaining 10% of revenue.

A mature debate on constructing a simplified tax system that supports economic growth and a shift towards more robust revenue streams is essential to safeguard Australia’s future. Such a debate is impossible without considering the role of the GST in replacing current inefficient State taxes and other much-needed reforms.

In other news last week, the Shadow Treasurer, the Hon Joe Hockey MP, gave his Budget Reply speech to the Press Club in Canberra. His focus on improving the ATO-taxpayer relationship is a welcome recognition of tax professionals’ concerns.

The ATO-taxpayer relationship is central to maintaining confidence in the integrity of our tax system. The Shadow Treasurer’s announcement of additional Parliamentary review to focus on the ATO’s operations and organisational structure will supplement the new Commissioner’s ongoing efforts to reform aspects of the ATO’s operations.

Members will recall that the Commissioner recently announced at The Tax Institute's National Convention that an independent review function would be set up within the ATO. The division should address actual or perceived biases in the handling of tax audits and disputes by offering a more independent evaluation process.

We strongly support any initiative that leads to a more open, transparent and productive ATO-taxpayer relationship.

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, 24 May 2013

Parliament, the ATO and beyond...

Last month must be labelled consultation month.

Recently, Robert Jeremenko, CTA, our Senior Tax Counsel, and I have spent some more time in Canberra with various MPs, senators and their advisers discussing various tax issues. We continue to advocate for the introduction into parliament of announced but unenacted tax changes. This list continues to grow and is of considerable concern to the Institute; we have asked for the process to be sufficiently resourced to bring the list to a reasonable position.

We continue our stance on Pt IVA and transfer pricing amendments and these now go before the Senate Economics Committee at which we will provide further evidence. We continue our stance on superannuation: that superannuation should not be tinkered with and that maintaining confidence in the system is paramount. We also discussed the issues facing revenue authorities around the world in having to deal with emerging developments in global economic trade and the tax concepts such as residency and source that are confronting them. We advised our continued willingness to contribute to consultation as the leading professional association in tax.

As we saw, there hasn't been any significant inroads to the tax legislative backlog introduced, given the 2013-14 Budget, together with other key government platform issues, that occupied the majority of parliamentary sitting time.

So where does this leave us? As I said above, Pt IVA and transfer pricing measures are before the Senate and the outcome may be determined during this Budget sitting. It is unlikely that any trust measures will be introduced as it appears that there isn’t consensus on an appropriate option for trust reform to progress and thus further consultation will probably be the outcome.

While we agree with the proposed process, trust reform should not be stalled or shelved. We have draft legislation for the removal of the CGT discount for non-residents, on which we have made a submission, and expect that there will be some redrafting. This may make these sittings. As to the announced superannuation changes, it is unlikely that we will see any legislation. The outcome of these announcements will probably be subject to the decision of the 44th parliament that forms after the September election.

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, 22 May 2013

CTA: The global leaders in tax

The Chartered Tax Adviser designation indicates you've reached the pinnacle of the tax profession. A respected mark of technical excellence and professional integrity, Australian tax professionals who attain the CTA designation are regarded for their leadership and expertise at home and abroad, providing global mobility.

Don't take our word for it, hear from some of our CTAs.



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, 20 May 2013

It's time for a national conversation on tax reform

The implications (both real and political) of the Federal Government’s 2013-14 Budget have been analysed and commented upon ad nauseum this week. But what does it mean for tax reform?

Unfortunately, the Budget is yet another wasted opportunity to embark on a long-term tax reform plan that is vital to ensure that the country is well positioned for the challenges of the decades ahead.

Instead, the Government has chosen the easy path of tax grabs from business to fund its excessive spending commitments. Efforts to protect the integrity of our tax system by closing loopholes are worthwhile, but the Budget measures ignore the long-term vision laid out in the Henry Tax Review.

In addition, the Budget adds significantly to the stock of announced but un-enacted tax measures. An outstanding agenda of more than 100 tax measures in an election year will heighten uncertainty for business in an already volatile environment.

Through The Tax Institute’s technical sub-committees we will be working through the details of the discussion papers and participating in the consultative fora over the coming weeks and will keep members informed as the changes take shape.

Late yesterday the Opposition leader delivered his Budget reply speech. The promised tax white paper that builds on the work of the Henry Review is a positive step towards a vital national conversation on tax reform.

In other news last week, The Tax Institute and the Business Law Section of the Law Council of Australia wrote to the Treasurer and Shadow Treasurer to express our deep concern regarding the recently announced measure to reform the self-education expense deduction by capping the deductible amount at $2,000 per annum from 1 July 2014.

The imposition of a cap on the deduction is a very blunt instrument to achieve the object of preventing extravagant claims. The proposed measure would capture and limit all claims for self-education expenses, regardless of their nature. An educated workforce should be one of the key objectives of Government. Providing a financial penalty to those seeking to self-fund their education is a significant disincentive. The objective of building a smarter Australia will be compromised through the introduction of the proposed cap.

The imposition of a cap might well prevent large deductions from being claimed, but in doing so, it would also penalise Australians who are endeavouring to improve their qualifications for work or business who are not incurring unnecessarily excessive costs. Accordingly, many legitimate claimants would suffer higher out-of pocket expenses as a result of this measure.

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.

Wednesday, 15 May 2013

Tax reform: Short-term thinking, long-term pain

Media Release: Tuesday 14 May 2013 (7.30pm AEST)

Tonight’s Federal Budget is yet another wasted opportunity to embark on a long-term tax reform plan that is vital to ensure that the country is well positioned for the challenges of the decades ahead, The Tax Institute said today.

“Short-term revenue considerations have resulted in the Government yet again choosing the easy path of tax grabs from business to fund excessive spending commitments”, Tax Institute President Steve Westaway said.

“While Government efforts to protect the integrity of our tax system by closing loopholes are worthwhile, the Budget measures virtually ignore the long-term vision laid out in the Henry Tax Review.

“Tonight’s measures lack any holistic tax reform plan to correct fundamental flaws and restore sustainability of tax revenues,” Mr Westaway said.

“The measures will add significantly to the stock of announced but as yet un-enacted measures. An outstanding agenda of more than 100 tax measures in an election year will heighten uncertainty for business in an already volatile environment.

“After years of cloistered, on-the-run policy making, businesses are again left to make significant investment decisions in the dark.”

Mr Westaway said that tackling base erosion and profit shifting requires more than a few integrity measures designed to bolster the current broken system.

“To date, the Government’s efforts on a broader rethink of the fundamental underpinnings of our international tax system have been underwhelming.

“Government delays have added to base erosion problems. Isolated measures to tackle debt dumping would have been unnecessary if the promised broader rewrite of foreign income taxation laws had been progressed as planned,” Mr Westaway said.

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.

Please visit our website for media enquiries.

Monday, 13 May 2013

2013-14 Federal Budget perspectives before lock-up

This week brings the release of the Federal Budget. The Tax Institute's President, Steve Westaway CTA and Tax Counsel, Deepti Paton CTA will join me in the Budget “lock-up” starting tomorrow afternoon. This allows The Tax Institute access to all of the Budget papers and announcements ahead of their public release on Tuesday evening.

Members will receive our initial comments on the Budget and a summary of the tax measures by way a special Budget edition of TaxVine that will be sent shortly after the Treasurer delivers his Budget speech at 7.30pm.

With the surplus commitment long-gone and with the tax revenue shortfall ballooning at a rate of $50 million every day since the Mid-Year Economic and Fiscal Outlook in October 2012, the scene is set for an atypically tight election year Budget. The actual size of the deficit and the details of the tax changes that are being pursued in order to minimise its size will be revealed on Tuesday. This will then set the scene for the final 19 sitting days of Parliament before the election, which is still another four months away.

The Tax Institute’s priorities for the Budget are contained in our submission to the Treasurer earlier this year.  We note that the growing stockpile of announced yet unenacted tax measures is fuelling uncertainty in the business community and hampering investment. The Budget submission also outlines a number of priority areas of the tax law that are in need of urgent and significant reform.

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, 10 May 2013

Enrolments now being taken for new Course in Commercial Law

The Tax Practitioners Board approves the Institute’s Course in Commercial Law

We are proud to announce that the Tax Practitioners Board approved the Institute’s Course in Commercial Law on 4 April 2013.

Alongside our Course in Australian Taxation Law, the Institute not only provides an additional education pathway to tax agent registration, but a broader education offering to strengthen the skills of tax professionals.

Renew your 2013-14 membership online and win!

Membership renewals are now due. All online renewals made on or before 14 June 2013 will go into one of five draws to win $1,000 cash prizes in Day to Day accounts with HSBC Bank Australia.

Free TaxLine research service

TaxLine is a dedicated member research service, supported by our research librarian team. This complimentary service to members provides information on specific tax-related enquiries.

Key events in May

Several of our key events are taking place in May — register now to ensure that you don’t miss out securing a place at the 46th South Australian Convention (2 to 4 May, Barossa Valley), the 6th Annual Tax Forum (16 to 17 May, Sydney) and Tax Through the Bottom of a Glass (23 to 24 May, Hobart).

CTA exam assessment option now taking enrolments

With over 7,500 (and growing) tax professionals now claiming CTA status in Australia, it’s only a matter of time before a client asks you if you’re a CTA. Why? Because by holding this designation, you are recognised in a number of international jurisdictions (including the UK, Europe and Ireland) as a tax industry leader.

To achieve the CTA designation, enrol in the CTA3 Advisory Exam.

New editions for 2013

Our publishing team is gearing up to publish the new editions of the SMSF Guide and Discretionary Trust Distributions in the coming weeks. Both are available in print and online, and offer structured CPD hours.

Don’t forget, a Tax Knowledge eXchange subscription with our online books option gives you full access to these and four other practical guides and handbooks, along with over 65,000 documents and up to 17 CPD hours.

Taxation in Australia iPad app

We’ve recently made some changes to our iPad app. If you’ve been having difficulty accessing the app, you’ll find help under the Taxation in Australia section on our website.

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, 6 May 2013

Update on cut to company tax rate

There is a chorus of support in Australia for a cut to the company tax rate. It will deliver economy-wide benefits that are necessarily in the national interest. We saw this played out in last year’s Business Tax Working Group process headed by Chris Jordan.

This is why The Tax Institute continues to support reducing the company tax rate in the medium term from its current 30% to the 25% recommended by the Henry Review. In addition to increasing Australia’s attractiveness as a destination for foreign investment, a 25% rate is comparable to rates in similar sized OECD countries. Even a modest cut to say 28% would be a step in the right direction and Australians across the board stand to share in the benefits. Companies are able to pass on the benefits to their employees, either in the form of increased wages or additional recruitment, thereby increasing productivity and employment.

It is in this context that it is worth noting that the Federal Coalition proposes to increase the company tax rate for the largest 3,200 companies by 1.5 percentage points. The revenue from this change would fund a paid parental leave scheme that is more generous than the currently legislated scheme.

Such a proposal flies in the face of the many positives that a rate cut would bring. In addition, as the recently released ATO Tax Statistics indicate, increasing the rate for the top 3,200 companies will impact on some SMEs with turnovers between $10 million and $100 million. This is because there are less than 3,200 large companies (as defined) in Australia.

We look forward to further engaging in the public debate on this and other tax proposals as the election year progresses.

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.