Sunday, 27 July 2014

Update on the Winter Sitting of Federal Parliament and the MRRT

The Winter Sitting of Federal Parliament ended last week and despite the winter chill in Canberra, the debate about the repeal of the Minerals Resource Rent Tax (MRRT) was red hot. Caught up in this debate are the tax concessions and other social security measures that were to be funded by the MRRT. These include changes to the capital allowances for small business entities, the loss carry-back regime for companies, the payment of a superannuation co-contribution to low income individuals, the increase to the superannuation guarantee rate and the Schoolkids Bonus.

The Government made an election commitment to repeal the MRRT and its related measures and it is sticking to its guns. The end of the Winter Sitting period curtailed round two of trying to get the MRRT and its related measures repealed to no avail. There were a number of attempts made in the Senate to maintain some of the associated measures that were to be funded by the MRRT. For now, there is no clear answer on what measures will stay and what measures will go, so taxpayers relying on the concessions and social security measures remain in limbo. Compounding the situation is the proposal to backdate the repeal of measures (see our post from 30 June for more detail).

We are conscious of the difficult situation that members are in who are trying to advise clients in the face of uncertainty around these measures. We have been strongly advocating to the Government to end the impasse so that our members can confidently advise clients on these measures with certainty in the law supporting them.

The Spring Sitting that begins on 26 August 2014 should see the resumption (and hopefully the conclusion) of this debate, resulting in certainty for taxpayers. We will keep a close eye on proceedings and keep members informed.


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, 23 July 2014

National events and upcoming course intakes

Start planning for your CPD requirements early

We host a number of flagship events throughout the year to help our members stay up-to-date on industry news and to help them earn their CPD requirements. In mid-August we will be running our National Superannuation Conference in Melbourne. This conference has been designed for tax professionals from both the large fund and self-managed superannuation fund (SMSF) sectors. The event will feature speakers from the legal, accounting, audit and financial advisory services fields of the superannuation industry to discuss current challenges and opportunities.

In September we will be hosting our 2014 National GST Intensive in Sydney. This year’s intensive will feature the latest in GST issues, while also providing you the opportunity to network with colleagues and fellow GST enthusiasts.

For further information on both of these flagship events, including the program and how to register, visit us online at taxinstitute.com.au/professionaldevelopment.

Thinking of taking that next step in your career, or perhaps upgrading the qualifications of your staff?

The Tax Institute is about to commence Study Period 2 and have a number of course offerings available that can help you further develop your tax knowledge or upgrade the qualifications of your staff.

Below you will find the upcoming course offerings and enrolment dates:
You can find out more about our course offerings, enrolment dates, fees and course structure on our website at taxinstitute.com.au/education.



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, 21 July 2014

Dispute resolution with the ATO

The Tax Office’s handling of dispute resolution is receiving significant focus at present. Both the House of Representatives Tax and Revenue Committee and the Inspector-General of Taxation are conducting inquiries into the matter.

As reported to us by members, over the past 18 months, we have noticed genuine and significant improvements in the way that tax disputes are handled by the ATO.

However, there remains room for improvement in a number of areas, including:
  • Engagement and cooperation at review and audit stage;
  • Flexibility in internal ATO timeframes, in particular to avoid the unnecessary escalation or progression of a matter that may otherwise have been resolved or limited;
  • Opportunities for early engagement and resolution outside of the large business and high wealth individual areas;
  • Technical expertise within the ATO; and
  • Independence at objection and independent review stages.
Structural change to the way that objections, reviews and litigation are managed within the ATO may be constructive. On balance, The Tax Institute supports the establishment of a separate appeals area within the ATO.

You may view our complete submission to the Parliamentary Committee here.

We look forward to engaging further in the coming weeks with the Tax and Revenue Committee and the Inspector-General on these important issues. 
 
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.

Sunday, 20 July 2014

June's free member tax presentations

Here’s a selection of presentations from our leading events series from June.
 
Members of The Tax Institute can access these presentations for free by clicking the links below (make sure you’re logged in to our website first).
Non-members can purchase the presentations for only $15 each.

Don’t forget, a Tax Knowledge eXchange subscription gives you unlimited access to these papers, presentations, articles from our journals, and much more.
 
Tax Knowledge eXchange
The Tax Institute runs over 300 CPD seminars a year, and all papers and PowerPoint presentations provided by the speakers from our seminars are available through the website individually or through a Tax Knowledge eXchange subscription.
 

 

Friday, 18 July 2014

Project DO IT

I would like to remind members of the ATO’s offshore income voluntary disclosure initiative, Project DO IT, which the Commissioner of Taxation Chris Jordan, AO launched at our national convention earlier this year. It has been approximately three-and-a-half months since the initiative was launched and it is due to expire at the end of the year.

We at the Institute supported the initiative at the time of the launch as it reflected a pragmatic approach to encouraging taxpayers to return revenue that is currently outside the tax system. For taxpayers, it provides an opportunity to bring funds onshore in the shadow of increasing international cooperation on exchange of information.

There have been a number of other offshore income voluntary disclosure initiatives in the past but this initiative contains some unique features: the ATO won’t go back beyond the standard amendment period, which is usually four years; and it may also agree not to tax taxpayers on the winding-up of their offshore structure. However, there are features that taxpayers should be wary of, such as not being entitled to utilise certain losses and shortfall interest charges.

Three-and-a-half months on, taxpayers have been slow to take up the offer. Mr Neil Olesen, Second Commissioner, Compliance, ATO, testified to the Senate Estimates Committee on Thursday 5 June 2014 that approximately 100 people had come forward under the initiative to date. We understand that these 100 disclosures revealed total additional income of over $8m. It will be interesting to see whether the uptake accelerates in coming months.

Given the slow uptake, I want to make sure that members are aware of the ATO’s initiative. For those clients who satisfy the criteria, it provides an important opportunity to bring their money onshore on favourable terms.

The Institute is also keen to hear from members how they have found the disclosure process in practice. Please contact the tax policy team if you have any feedback on this initiative and how the material published by the ATO with respect to the initiative could be improved.


 Michael Flynn CTA 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, 16 July 2014

Launch of a new course, membership renewals and an updated SMSF Guide

Announcing our new course: Tax for Financial Advising

The Tax Institute’s education offerings continue to grow with the launch of our new Tax for Financial Advising course. From 1 July 2014, the Tax Agents Services Act 2009 (Cth) (TASA) brings financial planners and advisers into the fold by requiring advisers who provide tax advice, during the provision of financial advice, to register as a tax (financial) adviser.
Our new course provides candidates with an opportunity to better service their clients with a solid grounding in ascertaining and advising clients on their tax affairs and to meet competence requirements under the TASA and Code of Professional Conduct.
The course delivers content on entities, superannuation, CGT and tax concepts, as well as the online course in the Code of Professional Conduct. By undertaking the course, notifying tax (financial) advisers will meet the 20 hours of tax-relevant CPD requirements which apply from 1 July 2014.
For more information, visit taxinstitute.com.au/education.
Final online membership renewal winners
We would like to congratulate Alan Hawke, CTA, Geoffrey Walker, CTA and Thelma Macgowan, FTI, the final three winners of iPad minis with Tax Institute eBooks (valued at $1,000!), including the new The Tax Adviser’s Guide to Part IVA, just for renewing their membership online.
If you haven’t renewed yet, please make sure you do so as soon as possible to ensure continuity of your membership. Once renewed, and as an ongoing member of The Tax Institute, we ask that you continue to use your existing membership card, certificate and decal.
You can renew your membership online at taxinstitute.com.au/renewal.
Publishing soon: SMSF Guide, 6th edition
In 2014’s new edition, Jemma Sanderson, CTA, looks at recent developments including: the new rules with respect to excess concessional contribution refunds and the traps to watch out for; reserving strategies in practice; recent cases with respect to the operation of binding death benefit nominations; trustee discretion and the importance of full consideration of the succession of an SMSF and more. Find out what else is new in the sixth edition by visiting our website.

Marks’ Trusts & Estates: Taxation in Practice, 3rd edition

We’re very excited to publish a new edition of Bernard Marks’ text in August. The new third edition publishes in an online-only version and comprehensively covers both recent issues and foundation concepts, providing detailed analysis of the new streaming provisions introduced after the decision in Bamford. Find out more 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.


Tuesday, 15 July 2014

Registration requirements for tax (financial) advisers

As I mentioned in last week's TaxVine, the Government has released draft regulations outlining the proposed registration requirements under the Tax Agent Services regime for financial advisers giving tax advice.

This week The Tax Institute finalised our submission to Treasury on the proposed regulations, expressing our deep concerns with respect to the proposed education and experience requirements for financial advisers who gain registration by joining a recognised financial adviser professional association.

The draft regulations fail to create an adequate framework that includes appropriately stringent tax and commercial law education requirements for financial advisers giving tax advice. This outcome is of grave concern, as it risks undermining the fundamental principle of the Tax Agent Services regime, which is to protect consumers of tax advice.
  
We recommend that the draft regulations are changed to require financial advisers giving tax advice to complete both a course in Australian tax law and commercial law and meet an ‘eight out of the last ten years' experience test. 

Our submission can be accessed here.

The Tax Institute is continuing to argue the case on this issue with Ministers and key Parliamentary decision makers in the coming weeks. 

I would be pleased to provide further detail or to discuss this issue further with members; please feel free to be in touch with me via taxpolicy@taxinstitute.com.au.

 
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, 11 July 2014

Proposed changes to ATO IT systems

As the winds of change continue to blow through the ATO, the Institute is closely monitoring two new ATO initiatives. The two initiatives are its technology transformation project discussed at the decent Drivers for Change Conference and Project DO IT.

Drivers for change – new business tax return and reporting requirements

The first project is particularly important for any practitioner who lodges tax returns for businesses. It involves the end of the current electronic lodgement service (ELS) arrangements and will require practitioners to ensure that their clients’ charts of accounts comply with a standard format. The ATO explained the proposed changes at its National Tax Practitioner Drivers for Change Conference held on 17-18 June 2014 in Sydney, which our tax policy team attended. The conference focused on what might change in the next decade for tax practitioners, having regard to rapid technological advances and globalisation. A key initiative the ATO discussed at the conference was the transformation from ELS to standard business report (SBR).

SBR
The SBR concept has been around for some time. It is designed to provide a single system for businesses to input information for use government-wide, but my impression is that to date businesses have been slow to adopt the changes required to implement SBR. The government participants include the ATO, APRA, ASIC, the Australian Treasury, the Australian Bureau of Statistics and the eight state and territory revenue offices. Under SBR, Australian businesses are able to use SBR-enabled software to prepare and lodge key government forms directly from their software to the agencies participating in the SBR program. Businesses use a single secure log on, AUSkey, when sending reports to agencies via SBR (see further www.sbr.gov.au).
One of the beneficial outcomes of SBR is that it will allow the ATO to prepopulate business tax returns.
The critical date for practitioners who use ELS is 1 July 2016, after which no new forms will be available through ELS. The ELS system will be phased out altogether shortly afterwards. The ATO called on tax practitioners to begin liaising with their software developers as soon as possible to exercise some influence over the software products that will be available to them to process lodgements through SBR.
Unlike ELS, SBR is an internet-based system. A key emerging issue with respect to SBR is — what services will be offered to tax agents through the tax agent portal and what will be offered through SBR? We receive a great deal of member feedback regarding the portal. It is clear that our members have a love/hate relationship with the portal as it is both indispensable and at times unreliable. Only time will tell if SBR and the portal can coexist harmoniously and allow our practices to operate more efficiently. Past experience tells me that any new project requiring the ATO to change its IT systems can cause major disruptions to lodgements.
The potential for disruption is still greater in this case because the project requires practitioners and their clients to make IT system changes that are compatible with the ATO’s systems. Be assured The Tax Institute will be at the forefront to represent our members’ interests as this transition gathers momentum.


Michael Flynn CTA 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.

Friday, 4 July 2014

Proposed registration requirements under TASR for financial advisers giving tax advice

As members are all too aware, tax is an inherently complex discipline. As High Court Justice Patrick Keane (as Chief Justice of the Federal Court at the time) described it: ‘opening the Tax Act is like opening the door to a parallel universe’. Consumer protection is one of the key objectives of the Tax Agent Services Regime (TASR) of 2010. The regime aims to ensure that those people who attempt to navigate their way through this tax universe have the appropriate professional and ethical standards as well as the educational qualifications and experience to make the journey safely. This is particularly important for those people relying on the complex navigation required: consumers of tax advice.

The Government has now released draft regulations outlining the proposed registration requirements under TASR for financial advisers giving tax advice. It is extremely disappointing that consumer protection is not foremost in the Government's mind in subjecting financial advisers to TASR. I say this because the draft regulations do not ensure a robust framework that includes appropriately stringent tax and commercial law educational requirements for financial advisers.

 
This is clearly inadequate and risks undermining the fundamental principle of TASR: to protect consumers of tax advice.

The Tax Institute will continue to relentlessly argue the case on this issue with the Government and key decision makers in the Parliament. Members who feel strongly about this may wish to consider writing to Treasury about the content of the draft regulations and/or contacting your local member of Parliament; (the Tax Institute is writing to Treasury and key decision makers in any event).

The draft regulations can be viewed
here, and please be in touch with me if you would like any further information.



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.