Friday, 28 June 2013

Politicians and Tax Reform

I note, with appreciation, the Opposition’s announcement of a white paper on tax reform, from which any government proposals for change will be put to the Australian people for their approval at the 2016 election. The fact that someone is prepared to put tax reform on the table (including the GST) for an open and frank debate is to be applauded — we welcomed the Henry Review, and the promise of a white paper to build on this is encouraging.

With regard to the GST, our political leaders, both federal and state, have pussy-footed around this issue for too long. Recent history includes: let’s review the tax system but the GST cannot be part of this discussion; and let’s look at GST distributions but not the rate or base of the tax itself.

Goods and services tax revenue is estimated to provide $51b for our state and territory governments in 2013-14. It is our third largest tax revenue stream. We currently collect 90% of our tax revenue from only 10 taxes, with an additional 115 taxes generating the remaining 10%.

Tax professionals and business have been making the case for tax reform for too long. Our world is advancing at a rate of knots and, in some cases, faster than we can adapt. Having a 21st century tax system will underpin a modern economy that will allow us to better address the global challenges of the decades ahead. Reforming our tax system will necessarily lead to productivity gains.

Tax reform is not just a discussion about increasing the GST rate. It is about reviewing our tax system, including the multitude of state and federal taxes and their efficiency, taking stock of what was promised with the introduction of GST, what our economy can afford, how our tax system can work more efficiently, what changes are necessary in our tax system to recognise the rate of change in global trade and the mechanics of those transactions, and then setting a course in which individual and business can operate with certainty. Ken Henry started this journey; now, more than ever, it needs to continue.

Having hopped off my hobby horse, please join me in your continued support for The Tax Institute. Our team, both in our state and national offices, are working hard to provide and improve our services to you. I know each of them is working on improving your experience as a member. The external surveys we participate in continue to rank us very highly and again we welcome your feedback.

The Tax Institute has a number of continuing professional education sessions running, so please review our emails or website for opportunities to develop or maintain your tax expertise.

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.

Thursday, 27 June 2013

Tax Institute staff battle it out in the Domain

A couple of weeks ago if you were out and about in the Sydney CBD (or following @TaxInstituteOz on Twitter) you might have noticed some colourfully dressed, over-excited Tax Institute staff parading through Martin Place to celebrate the Institute’s 70th anniversary.

Having taken a well-earned day off from advocating for tax reform, Institute staff split in to several teams to battle it out for the winners title, with the purple team crowned victors.














In 2013, The Tax Institute is celebrating 70 years of supporting the tax profession.

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, 26 June 2013

A mixed bag of tax announcements (edition 2)

The sun has set on Summer and Autumn has just begun. The sun has also set on some long-running tax issues which have culminated in the introduction of the amendments to Part IVA and transfer pricing in the beginning weeks of the Autumn Parliamentary sitting season. All of our consultation efforts on both of these issues have seen some positive changes to the legislation, but more needs to be done. We have further argued the case for change in a submission to the House of Representatives Standing Committee on Economics.

However, this period has also seen the rise of the sun on emerging issues, particularly the Assistant Treasurer’s pursuit of multinational organisations to pay (in his words) “their fair share” of tax by setting up a Specialist Reference Group to consider ways to create greater transparency in the business tax system. We will be hot on the heels of this issue as the Specialist Reference Group’s review gets under way and we will be reminding the Government that abiding by the law is not evidence of paying an unfair share of tax.

With the announcement of the Federal Election on 14 September 2013 also happening this quarter, we anticipate gaining insight over the course of the next few months into possible changes to the tax system that a new Government may bring in Spring.

Finally, the new Tax Practitioners Board commenced on 22 January 2013 and we look forward to working with the new Chair, Ian Taylor, and the newly constituted Board on matters affecting tax agents for the duration of the new Board’s term.

As always, the Tax Policy team is available to you by email.

Stephanie Caredes, CTA, is Tax Counsel 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, 25 June 2013

Legislative certainty for consumer protection around tax advice

Last week brought with it welcome agreement to legislate consumer protection certainty for people receiving tax advice from their financial adviser. The agreement between the Government and the Coalition will ensure that legislative certainty for consumer protection is achieved before the 43rd Parliament rises for the final time next week.

As members would be aware, The Tax Institute has worked tirelessly for legislation that will ensure consumers of tax advice received from financial advisers have appropriate protections in place.

The measures ensure that financial advisers meet appropriate professional and ethical standards. They also lay the foundation to ensure that financial advisers have the educational qualifications and experience to be able to advise people about their investments and tax consequences.

This follows the report of the Parliamentary Joint Committee on Corporations and Financial Services, at which The Tax Institute presented evidence last week. The Committee recommended both minor changes and that the legislation be reintroduced and passed by Parliament.

However, we are disappointed at the decision to defer the start date of these reforms for yet another 12 months. This is the fourth delay to the start date of these 2010 reforms, with the new law now taking effect on 1 July 2014.

Over this period, we look forward to working with the Government to ensure that financial advisers have sufficient experience and educational qualifications in tax such that the true intent of the law is fully realised.
We are continuing our consultations with respect to the draft regulations that will set out the educational requirements and experience levels.

I would be happy to discuss in more detail, so please be in touch via 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.

Monday, 24 June 2013

Speaker Profile: Stephanie Caredes, CTA

Stephanie Caredes, CTA, Tax Counsel at The Tax Institute is presenting the free Financial Planners and Tax Advice webinar on Certainty and Clarity.

Tell us about yourself

I am a member of The Tax Institute’s Tax Policy and Advocacy team. Prior to this, I spent many years advising on a broad range of tax matters (Federal and State) in private legal practice as well as publishing several articles and commentary on tax issues. I am also a registered tax agent.

How long have you been affiliated with The Tax Institute?

Prior to joining The Tax Institute as Tax Counsel in January 2012, I had been a member since 2004.

Why do financial planners need to know about this legislation now?

The extension of the regulatory regime under the Tax Agent Services Act 2009 to apply to financial planners has been in the works for a long time. Legislation has just been introduced into Parliament that is expected to pass and become law before 1 July 2013. Though the start date of the regime isn’t until 1 July 2014, the next twelve months will fly by and financial planners should be making sure they are aware of how this regime may (or may not) impact them once 1 July 2014 rolls around.

What can attendees expect to take away from the webinar?

All the facts about how the regime could apply to them, how to register, how they can transition into the regime and what education and experience requirements will apply if they enter this regime.

What do you like to do when you’re not knee-deep in tax?

Keep fit and healthy and cook for my friends and family.

iCPD
Register now to attend the FREE Financial Planners and Tax Advice webinar and hear Stephanie discuss how the tax agent services regime may affect financial planners who provide tax advice.

Friday, 21 June 2013

Raising your profile: 15 x 15

Growing the recognition of CTA in Australia

In last month’s post, I mentioned our plans to raise the profile of members and The Tax Institute through the CTA and our new “T is for Tax” campaign.

Now I’d like to tell you about our “15 by 15 project”.

The 15 by 15 project recognises that, as more and more tax professionals become members and achieve CTA status in Australia, we will have greater capacity to increase the recognition of your “mark of expertise” in tax and for you to be sought out for your qualifications, experience and integrity.

It’s with that in mind that we set our sights on the ambitious goal of growing to 15,000 members by 2015.

We can achieve this one person at a time, but only with your help. If every member invites at least one colleague into The Tax Institute, we can reach this goal in no time.

With that in mind, can I ask you to help us achieve this? All you need to do is take two minutes to complete the online form at by nominating a colleague you know who is not a member but ought to be.

On completion, please advise your colleague that you have nominated them to be a member of The Tax Institute. We will then contact them to follow up.

Thank you for your support and leadership. Together, we can ensure that all members and CTAs are sought out for their “mark of expertise”.

Your CPD requirements

With 30 June fast approaching, don’t forget that, if you are a voting member of the Institute, there are certain CPD requirements you need to meet to qualify for membership.

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, 19 June 2013

Post-budget thoughts on reform

The half way mark of my term is fast approaching. So many things to do and so little time!

This last month brought many new issues to the fore that have been prominent in The Tax Institute’s thinking, stemming from both the Budget and the Opposition’s reply.

I joined with our Tax Counsel staff in the Budget lock up with some degree of excitement. Given the early leaks, I still held out hope that there may be something special left for the actual lock up release. I thought our time in the lock up may be used to analyse new initiatives and the pathway forward for Australia, a new vision for our country.

Unfortunately, as I was advised and should have expected, it had all been prereleased. I then waited for the Opposition’s Budget reply; I thought maybe a new pathway forward, a new vision for our country. Again, as I was warned, in the main, nothing new was announced. As I reflect on the expected size of the deficit, arguments abound with respect to whether our fiscal position is a wasted opportunity and whose fault it is that the estimates were so far from the actual numbers. The revenue shortfall has been caused by a drop off in corporate tax revenue, capital gains tax revenue, and a well-advertised drop in minerals resource rent tax receipts.

I note the continued pressure that is to be applied to business to protect these revenue streams: new thin capitalisation rules; tightening of the non-portfolio dividend income exemption; tax deductibility of interest expense in relation to certain foreign exempt income; tax consolidation changes; tightening the foreign resident CGT regime; dividend washing; restricting deductions regarding exploration expenditure; changes to R&D; and additional resources to the ATO for special projects.

I also note the ongoing discussions regarding “stateless income” and the inability of our current income tax systems to tax certain global profits. I hear our state governments continuing to defer election promises to reduce their own inefficient taxes because of their own budget pressures.

Commentary on the Budget leads to discussion about the need to recognise that the mining boom cannot continue to be our lone saviour while remaining competitive in a global economy. The rest of our economy needs to be able to compete on a global playing field driven by productivity gains.

So, with all of these issues to consider, you would think that tax reform should make it onto the discussion table.

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, 18 June 2013

Speaker Profile: Philip Keir, CTA

Philip Keir, CTA, Whitehills Business Advisors is presenting at the Accounting for Common Tax Transactions Workshops for the Accounting for Trusts topic.

Tell us about yourself

I’m a partner in a small firm which focuses mainly on the SME market. I have been working in tax and business services since 1987. I completed a Masters of Taxation in 1999. I like to stay involved at the practical side of both accounting and tax.

How long have you been affiliated with The Tax Institute?

I’ve been a member since 1991. I have been part of the Queensland education committee, presented papers and also been a workshop leader at the Noosa Tax Intensive in 2011 which looked closely at the trust streaming measures.

What do the Accounting for Common Tax Transactions Workshops mean to you, and more broadly, to the tax industry?

This series targets practitioners like me who advise SME’s and need to keep abreast of the challenges for clients who have trusts as part of their business or investment structure.

What is the topic that you are presenting?

I will be presenting on the Accounting for Trusts topic.

What can attendees expect to take away from your session?

Hopefully they will get a good mix of the theory and practical aspects of accounting for trusts. I would hope they can walk away from the session and put some of the ideas into practice straight away.

Which other sessions at the Accounting for Common Tax Transactions Workshops are you most interested in attending?

I hope to attend some of the other sessions in this series. All of them are very relevant to the area I work in daily.

What do you like to do when you’re not knee-deep in tax?

I’m a keen ocean swimmer which seems to be gaining in popularity every year. There’s an event in Spain I’d like to do – one day!

Accounting for Common Tax Transactions
NEW workshop series for 2013! The Accounting for Common Tax Transactions Workshops include four short sessions designed to step you through the accounting entries and related issues associated with a number of common tax transactions.

Monday, 17 June 2013

The Institute presents evidence to parliamentary committee on TASR

Last week The Tax Institute presented evidence to the Parliamentary Joint Committee on Corporations and Financial Services during its inquiry into proposed legislative changes to bring financial advisers into the Tax Agent Services Regime.

This continues our extensive advocacy on this issue to ensure that these long sought after consumer protection measures are applied to financial advisers who operate in tax.

An extract from our evidence to the Committee follows:

“Mr Jeremenko : Tax is an inherently complex discipline. I think many of us would be aware of that. His Honour Justice Patrick Keane when he was Chief Justice of the Federal Court—he is now a High Court Justice—described the tax act as 'like opening the door to a parallel universe.' In the context of the legislation before as today, it is very important to realise that what we are talking about is ensuring that those people who are trying to navigate through that parallel universe have the appropriate professional and ethical standards and the appropriate educational qualifications and experience to make that journey safely. That is also important for those who are relying on those people doing the navigation—that is, in this context, the people receiving the tax advice.

“In summary, it is extremely important in The Tax Institute's view that the consumer protection measures before us today—which is what they are about, they are measures that are aimed squarely at people receiving tax advice from their financial planner—are passed into law before 1 July 2013.

[...]

“CHAIR: Could I ask you to put a view on the question of: what is the problem that requires this legislation? It has been disputed—it has been said that there is not a problem and that there is going to be an unnecessarily high financial burden on the industry to comply. What is the problem that is being addressed by this legislation, that you say is urgent and should be brought before the parliament, passed and the implementation of which should be commenced by 1 July 2013?

“Mr Jeremenko : The problem is that any consumer, anyone from the general public, who speaks to a financial planner and receives advice of any nature regarding tax—the complex parallel universe of tax—has no protection should this legislation not pass, and has no protection should that advice be incorrect. So this legislation makes sure that the Tax Agent Services Act applies to that advice. What that means is that the extensive code of conduct within the legislation and the extensive disciplinary procedures of the Tax Practitioners Board, which is the agency charged with administering the Tax Agent Services Act, can apply to anyone who gives tax advice incorrectly and does not do that in a fit and proper way. That is the reason for the legislation needing to be implemented. I question the need for another 12-month delay. As I said, there have been three 12-month delays for the purposes of getting further detail and further consultation, and that consultation has occurred.”

The Committee will report on Monday 17 June and the Government is committed to reintroducing the measures into Parliament as a priority.

I would be happy to discuss in more detail the nature of the Committee hearing and our appearance before it; please be in touch via 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, 14 June 2013

2013 Mid year sale now on

Mid-year sale

Our mid-year sale kicked off on 1 June and gives you the opportunity to take advantage of savings of up to 60% across our range of books, journals, CPD on DVD, and more. Take a look at the sale flyer inserted with this month’s Taxation in Australia or visit our website to see what’s on offer.

Renew your 2013-14 membership online before 14 June to win!

We would like to congratulate Ms Bee Lim, FTI, and Ms Lauren Moses, the first two winners of $1,000 cash prizes in Day to Day accounts with HSBC Bank Australia just for renewing their membership online.

With two more draws to go, will you be next? Renew your membership of The Tax Institute online before 14 June 2013 to make sure you are in with a chance.

Renew your 2013-14 membership on our website.

CTA Program – choose the level that meets your needs

Enrolments for all of our Chartered Tax Adviser Program courses close next month.

The program provides different levels of dedicated tax education to meet the needs of all tax professionals. The courses — CTA1 Foundations, CTA2 Advanced, and CTA3 Advisory Exam — build on each other to ultimately produce tax advisers with the professional tax skills required to join our growing international network of CTAs.

Register now for upcoming national conferences

The 13th Annual States’ Taxation Conference is coming up in July and will be held in Adelaide. It’s the only national conference covering all state and territory taxes in one technical program — register now so you don’t miss out.

This year, we have also introduced the National Superannuation Conference. Taking place in Sydney in August, the event has been designed for tax professionals from both the large fund and self-managed superannuation fund sectors.

Your free member paper

As part of your membership of The Tax Institute, each month you can download a technical paper for free from the Institute website — this is advertised in the first TaxVine e-newsletter of the month.

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, 11 June 2013

A closer look at the Tax Agent Services regime

As members will be aware, recently the Government introduced a Bill into the House of Representatives to finally subject financial advisers who provide tax advice to the Tax Agent Services Regime.

The Tax Institute has worked hard to ensure that these long sought after consumer protection measures are applied to financial advisers who operate in tax. In addition to our regular briefings of Members of Parliament, this week we issued a media statement and wrote to key independent MPs on the issue.

In yesterday’s second reading debate in Parliament, Rob Oakeshott MP, Federal Member for Lyne said the following:

And my good friends at The Tax Institute I think put it best of all—and The Tax Institute are hardly a friend of government. Arguably, they are the country's leading professional association in tax, with 13,000 members, including tax agents, accountants and lawyers. Fundamentally, they support the tax profession to work to continually improve tax law and administration. They are very passionate about [this change] and say that it is an important consumer protection measure in tax law. I think they will be bitterly disappointed that because of the lack of numbers in this chamber the government has had to omit [the measures] at the expense of consumer protection in Australia today.

The upshot of the debate is that the provisions in the Bill dealing with financial planners and the Tax Agent Services Regime have been excised, such that the Parliamentary Joint Committee on Corporations and Financial Services can examine them in detail next week. The Government is committed to reintroducing the measures in a separate Bill when Parliament resumes on 17 June, with the clear intent to pass them into law before 1 July 2013.

So how did we get to this point? – a combination of legislative delay, politics and a last-minute dummy-spit by the financial planning industry.

After three years of extensive consultation, these developments have unfortunately jeopardised giving consumers of tax advice the confidence they need and deserve.

We look forward to actively participating in the further Parliamentary scrutiny of the measures before they are passed into law before 1 July 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, 7 June 2013

Gedenksschrift for Graham Hill

In a special tribute to the late Justice Graham Hill, Australian Tax Forum brings together many of the country's most respected tax writers and academics to offer their thoughts on Justice Hill's contribution to our tax system.

Taken from this issue, is Richard Giannone’s Gedenksschrift for Graham Hill, an abstract of which is below. You can download and read the full article for free.

Abstract

Donald Graham Hill was a gifted tax practitioner, an eminent judge and an outstanding teacher. His death in 2005 saddened all who knew him, including the many students whom he had taught over 38 years as a lecturer at the University of Sydney in the Master of Laws Course in State Taxes and Commonwealth Sales Tax. This article records the reflections of one of those students, who has practised for 25 years in the specialist area of stamp duty law in which Graham was renowned as the leading expert. Graham’s talent for teaching is acknowledged as the foundation for the professional expertise which the writer has developed.

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, 3 June 2013

Financial advisers now subject to the Tax Agent Services Regime

It has been a long time coming, but last week we saw a Bill introduced into the House of Representatives that will subject financial advisers who provide tax advice to the Tax Agent Services regime.

As members will be aware, The Tax Institute has worked hard to ensure that this strong regulatory framework enforced by the Tax Practitioners Board is applied to financial advisers who operate in tax.  Consumer protection is paramount, and this legislation will ultimately apply that protection to clients of financial advisers.

As the legislation is set to start on 1 July 2013, the Government is certainly cutting it fine to pass it into law. However, they are committed to doing so prior to Parliament rising in late June.

One of our key concerns - the education and experience requirements that will be required of financial advisers - still remains to be finalised via regulations. We will continue to work closely with the government and the TPB to ensure these standards are satisfactory.

If you have any thoughts on the above (or on any other topic) and would like to share them with your Tax Policy and Advocacy team, please email us at 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.