Friday, 29 August 2014

August's free member tax presentations

Here’s a selection of presentations from our leading events series from August.

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.

Wednesday, 27 August 2014

Searching for a “savvy” tax administrator

The Pt IVA panel session at the Corporate Tax Retreat highlighted to me the importance of the approach that the ATO takes to the administration of our tax laws. One of the givens of our income tax system is that people should generally only pay tax on their economic gains, but a consequence of our increasingly complex laws is that transactions may, on a literal interpretation of the law, trigger significant tax liabilities even though they do not produce any economic gain.

One example provided during the panel session on Pt IVA was the acquisition by a non-resident of an Australian tax consolidated group. In the example provided, if the non-resident acquired the group directly, it might trigger CGT event L5. CGT event L5 can happen if the tax cost of assets is less than the liabilities. It is a quirk of the law that the acquisition of a tax consolidated group by a second tax consolidated group does not give rise to an L5 gain, whereas the acquisition of the same group by a single entity can give rise to a capital gain.
As an alternative to acquiring the Australian group directly, if the non-resident establishes a new Australian tax consolidated group to acquire the Australian group, it would avoid triggering CGT event L5. Could the creation of an Australian tax consolidated group to acquire another Australian tax consolidated group give rise to a tax benefit?
In an article published in the February 2014 issue of The Tax Specialist, Grant Wardell-Johnson suggested that a “savvy” tax administrator would not apply Pt IVA if an acquirer established a tax consolidated group simply to avoid the application of CGT event L5. But when the question was posed at the panel session on Pt IVA at the Corporate Tax Retreat, the ATO was unable to rule out the application of Pt IVA, although it appears that, if there were commercial reasons for the establishment of the tax consolidated group, Pt IVA should not apply.
This is but one example of many instances where a strict application of the law could give rise to an unexpected tax liability. The new Commissioner of Taxation, Chris Jordan, has indicated that he would like the ATO to exercise pragmatism in its administration of the law. I hope that that message filters down through the hierarchy to the auditors and the other individuals dealing on a face-to-face basis with taxpayers.

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.

Monday, 25 August 2014

Inaugural meeting of the new Tax Reform Committee

This week The Tax Institute's new Tax Reform Committee held its inaugural meeting. The Committee is comprised of an impressive and diverse line up of members from various backgrounds in public practice, commerce, government and academia, and is chaired by our President Michael Flynn CTA.

The creation of the Committee this year formalises the importance of big picture thinking on tax reform as part of the Institute's policy and advocacy activities. The calibre of the volunteers on this Committee is an indication that there is a genuine interest within the Institute's membership in contributing to the overall design of the tax system. 

There is no doubt the Institute's work on coal face issues is very important and has a significant and direct impact on members on a practical level. Having moved to the Institute at the beginning of this year from professional practice I am well aware that, as a tax practitioner, the concerns of specific clients, the vagaries of ATO guidance, the minutiae of the Tax Act and tax administration take up most of your day. Stepping back from these pressing daily issues and questioning how the tax system could be fairer, more efficient and simpler is no easy task. The Committee indicates that our members are up to the challenge.
Members do not need to be on the Committee to contribute to the Institute's conversation on tax reform. Please contact us at
taxpolicy@taxinstitute.com.au with your ideas.

Also please join The Tax Institute on LinkedIn for news and updates and to discuss key issues in tax with other professionals.


Thilini Wickramasuriya ATI is Tax Counsel at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 15,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 22 August 2014

Upgrading your tax qualifications and meeting your CPD requirements

Taxation and Practice

August sees us publish the long-awaited third edition of the pre-eminent source for immediate, authoritative answers to trusts and estates issues, with Marks’ Trusts & Estates: Taxation and Practice being fully revised and updated for 2014.
Find out more about this online title by visiting taxinstitute.com.au/publications.
CPD requirements for upcoming year

With the new financial year underway, it is a fantastic time to start planning for how you will acquire your CPD requirements.
We offer our members several industry-relevant publications and events that provide current information to help you stay up-to-date. These offerings are made available to you in a variety of formats — be that at one of our state conferences or seminars, online, in person or by DVD — and are continually being updated and developed to meet the needs of our members.
You will find upcoming events, courses and publications to help you meet your CPD requirements on our website at taxinstitute.com.au/professional-development/ upcoming-cpd-events.
Upgrade your tax qualifications

We are all so busy throughout the year, it can be easy to put off taking courses that help us stay up-to-date with our tax education requirements. With your membership renewed for the upcoming financial year, it is the perfect time to map out a plan to update the qualifications of yourself or your staff in 2014-15.
The Institute offers courses to cater for all of your tax requirements, with courses that lead into the CTA designation, in GST, tax law and financial advising. Although Study Period 2 is already underway, you can still register for several of our courses in 2014, including:
If you or your staff are looking to achieve BAS agent status, our Course in Basic GST/BAS Taxation Principles is available at any time. Similarly, if you or anyone you know is looking for a way to meet the requirements under the Tax Agent Services Act 2009 for financial advisers advising on tax, we now offer a Tax for Financial Advising course which you can undertake at your own convenience.

Find out more about our course offerings, important study dates and how to enrol on our website’s education section 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.

Friday, 15 August 2014

Dispute resolution and Project DO IT

Dispute resolution

This week The Tax Institute appeared before the House of Representatives Tax and Revenue Committee to give evidence relating to our submission to the Committee’s inquiry into the ATO’s handling of dispute resolution. The Tax Institute's President, Michael Flynn CTA and Co-Chair of our Dispute Resolution Committee, Dr Niv Tadmore CTA, joined Tax Counsel, Thilini Wickramasuriya ATI at the Committee hearing.

The Committee comprises ten members of the House of Representatives, with six Government MPs and four non-Government MPs. It is Chaired by former tennis great, John Alexander OAM, MP.

The Hansard containing our evidence will be available on the Parliament House website in the coming days. We look forward to again engaging with the Tax and Revenue Committee on future hearings into other important issues affecting members.

Project DO IT

Members would be aware of the ATO’s offshore income voluntary disclosure initiative, Project DO IT.

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 of the tax system. For taxpayers it is a chance 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; and it may also agree not to tax taxpayers on the winding-up of their offshore structures. However, there are features that taxpayers should be wary of, such as not being entitled to utilise certain losses and shortfall interest charges.
Five months on, the uptake amongst taxpayers has been quite slow. The ATO advises that more than 100 disclosures have been received, with total additional income disclosed of around $12 million. The ATO has also received almost 200 expressions of interest from taxpayers that intend to lodge a disclosure but are seeking more time to finalise. There are clearly many issues to consider, such as:
  • How does the Tax Office regard taxpayers with legacy issues?
  • How long does it take to get a resolution?
  • Will the ATO only seek to collect tax for the past 4 years or will it go to the principal sum?
  • What is the go forward position of the taxpayer?

I encourage Sydney-based members to register for The Tax Institute’s upcoming event:  “Project Do IT: what does the Tax ‘Amnesty’ really mean to you?” on 21 August in Sydney.  Hear from ATO Deputy Commissioner, Michael Cranston, as well as practitioners including Ken Schurgott CTA-life, in this three hour session. There will also be a Q&A Panel with all of the speakers.  You can register or read more about the event here. For our members not in Sydney, keep an eye on our website for a webinar on the subject later in the year.
 
  
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, 13 August 2014

Critical consumer protections at risk due to poorly planned Government move

A Federal Government move to allow financial planners to provide tax advice fails to set appropriate tax and commercial law education requirements and threatens critical consumer protections, according to The Tax Institute.

Michael Flynn, President of The Tax Institute, said, “We are concerned that recent Government Regulations will allow relatively inexperienced financial advisers to gain registration under the Tax Agent Services Regime by simply joining a recognised financial adviser professional association.
  
“The Government’s actions result in there being no requirement for financial advisers to have completed a course in tax or commercial law, and yet the effect of this will be to allow them to provide wide-ranging tax advice.

“This means that consumers will be at risk of receiving tax advice and services provided by inadequately qualified advisers or those with out-of-date skills,” he said.

According to Michael Flynn, the Government’s move is surprising given the recent Senate Economics References Committee’s investigation of a number of rogue financial advisers.

The report found the activities of some advisers were ‘unethical, dishonest, well below professional standards and a grievous breach of their duties’.

Mr Flynn said, “Given that the report recommended imposing minimum education, experience and continuing professional development requirements on the financial advising industry at large, it is illogical that the Government is withdrawing some of these conditions for the provision of tax advice.

“The law must ensure robust consumer protection. Recent financial planning scandals such as Storm Financial and Opes Prime, have highlighted the risk posed to people’s life savings, their investments and indeed their livelihoods, as a result of poor consumer protection.

“In effect, the Government’s Regulations fail to meet the minimum educational standards consumers are entitled to expect,” said Mr Flynn.

For more information on the above, or if you have any questions, contact Robert Jeremenko, Senior Tax Counsel, The Tax Institute, 0468 987 300.

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.
 

Monday, 11 August 2014

Media Release: Launch of Inaugural Postgraduate Qualification


DATE: 11 August 2014

The Tax Institute has been formally recognised as a higher education provider and is now the only professional association in Australia providing a postgraduate qualification in tax.

As Australia’s leading educator and professional association in tax, The Tax Institute has gained accreditation for its new Graduate Diploma of Applied Tax Law qualification.

According to Noel Rowland, CEO of The Tax Institute, “Over the next decade and beyond the complexity of the tax environment will intensify. This complexity will be driven by shifts right across the taxation system.
“As a result, tax professionals need to equip themselves with the skills and capabilities to provide higher-order professional tax advice.

“The new postgraduate course, Graduate Diploma of Applied Tax Law, to be launched in the coming months is designed to meet the changing needs of, and demands on, tax professionals in the next decade and beyond.

“This is a significant milestone for the tax profession and for The Tax Institute as it anticipates the changing needs in the skills of tax professionals in the coming decade,” said Mr Rowland.

The Tax Institute is the only designator of the internationally recognised ‘Chartered Tax Adviser’ title in Australia.

Contact:

Noel Rowland, Chief Executive Officer, The Tax Institute: 02 8223 0001
Dylan Malloch, Sefiani Communications Group: 0407 620 613

The Tax Institute is the country’s leading educator and professional association in tax. Its 15,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.  The Tax Institute supports the tax profession through education and professional development and works to continually improve tax law and its administration.

The need for minimum education requirements for financial advisers

As I have mentioned before in TaxVine, a Federal Government move to allow financial planners to provide tax advice fails to set appropriate tax and commercial law education requirements, thereby threatening critical consumer protections.

The Tax Institute is concerned that recent Government Regulations will allow relatively inexperienced financial advisers to gain registration under the Tax Agent Services Regime by simply joining a recognised financial adviser professional association.
 
The Government's actions result in there being no requirement for financial advisers to have completed a course in tax or commercial law, and yet the effect of this will be to allow them to provide wide-ranging tax advice.
 
This means that consumers will be at risk of receiving tax advice and services provided by adequately qualified advisers or those with out-of-date skills.

This is a particularly curious move by the Government, given the recent Senate Economics References Committee's investigation of a number of rogue financial advisers. The report found the activities of some advisers were ‘unethical, dishonest, well below professional standards and a grievous breach of their duties'.

Given that the report recommended imposing minimum education, experience and continuing professional development requirements on the financial advising industry at large, it is illogical that the Government is withdrawing some of these conditions for the provision of tax advice.

The law must ensure robust consumer protection. Recent financial planning scandals such as Storm Financial and Opes Prime, have highlighted the risk posed to people's life savings, their investments and indeed their livelihoods, as a result of poor consumer protection.

In effect, the Government's Regulations fail to meet the minimum educational standards consumers are entitled to expect.
 
The Australian Financial Review reported on our concerns in its 6 August 2014 edition. The article: Row over changes allowing financial planners to advise on tax, may be accessed here.

You can read more about this issue in our submission to Treasury on the draft version of these Regulations. The Tax Institute is continuing to argue the case on this issue with key Parliamentary decision makers.

I would be pleased to provide further detail or to discuss this issue 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, 8 August 2014

Education requirements for financial planners and issues with ATO IT systems

Corporate Tax Retreat

In the first week of July, I attended the Corporate Tax Retreat at Sanctuary Cove on the Gold Coast. The Corporate Tax Retreat is an event that the Queensland Division has held for a number of years. This year, for the first time, the organising committee included a number of members from New South Wales and Victoria and the event was marketed nationally.

The intensive was very successful. A highlight for me was the panel session on the application of the amended Pt IVA. I hope this event continues to grow in stature and attracts more participants from interstate.
The Tax Institute will continue to encourage the state divisions to develop and market conferences that can draw participants from across Australia. It is a feature of the current tax education landscape that the events that are successful and well-supported are those organised on a national basis. This provides a challenge to the State Education Committees which are accustomed to organising events aimed at local practitioners and promoted in their local markets. But if they take up the challenge, it will provide opportunities for interacting with colleagues from interstate and attracting the best practitioners from around the country.
For more information on events run at the Institute, visit us online at taxinstitute.com.au/events.
Financial planners
As I write, there is still uncertainty about the final shape of the standards that financial planners will need to satisfy before they can provide tax advice. The Tax Institute is continuing to press Treasury and parliamentarians to require financial planners to meet appropriate education and experience requirements.
Issues with ATO IT systems

The two most recent issues of TaxVine (No. 24 and No. 25) record problems that a number of members have picked up with the annual PAYG instalment notices for 2014 issued to some of their clients — they are based on the 2012 assessment even though the 2013 assessment was issued some time ago and no annual instalment should be required. If our members find this confusing, imagine the confusion for taxpayers who do not have tax agents! We will continue to monitor members’ complaints about the ATO’s IT systems and raise them in the appropriate forums.
Please bring to our attention any systemic issues that you come across, either with the ATO’s systems or with the interpretation of the law.


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.

New Tax for Trusts, Estate Planning and Wealth Management course

New Tax for Trusts, Estate Planning and Wealth Management course

Another month, another exciting education course launch!

Building directly on a strong foundation in the areas of trusts, estate planning and wealth management currently supported through our publications, CPD events, and online resources, The Tax Institute is meeting the profession’s demand by distilling our expertise into a formal education course.

The Tax for Trusts, Estate Planning and Wealth Management course gives you the skills to advise on wealth accumulation and management strategies, and is essential for any practitioner who wants to understand complex tax matters relating to trusts and estates.

Not only is this course taught by the highly respected industry expert Harry Rigney, CTA, it is also supported by the revised edition of Marks’ Trusts & Estates: Taxation and Practice.

For more information, go to taxinstitute.com.au/education.

Tax rates table 2014-15

In this month’s journal, you will find your complimentary copy of the Institute’s handy desktop tax rates table — an indispensable aid with the most commonly used tax rates at your fingertips, including the Medicare levy, tax offsets, superannuation, eligible termination payments, FBT, CPI indexes, and more.
We hope you find this resource valuable.

Download our new app

We’ve recently made some exciting changes to our Taxation in Australia app. If you haven’t downloaded it yet, make sure you try it soon. If you are already using our iPad app, be sure to tap “update” when prompted when you next open the app to enjoy some great new features and content. Android users, we now have a version available for your devices too.

Visit taxinstitute.com.au/app to find out more.

Membership renewal contest
Congratulations to all five members who won one of the iPad minis along 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. The winners are:

  • Alan Hawke, CTA;
  • Geoffrey Walker, CTA;
  • Leonardo Di Battista, CTA;
  • Michael Battersby, FTI; and
  • Thelma Macgowan, FTI.

Our new eBooks are compatible with your Kindle reader, iBooks for the Apple iPad, and most other major eReaders. I hope you enjoy your prizes.
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.
 
 
 

Friday, 1 August 2014

Improving access to child care through the tax system

The Productivity Commission recently released its interim report into child care and early childhood learning.

The Tax Institute contributed to the Commission’s inquiry earlier this year and argued that two options for improving access to child care through the tax system would be to allow a tax deduction for child care costs and to use a refundable tax credit or cash grant.

Tax deductions for the costs of child care, if appropriately targeted, would encourage highly educated women who bear the primary responsibility for domestic duties to return to work.

Tax deductions should only be available to reduce the tax on income from employment or self-conducted business income so that they are unequivocally tied to enhancing productivity.  That is, there is no point giving a subsidy to reduce the tax on investment income.  As such, we do not support subsidising the child care expenses of a parent who is still at home earning bank interest or share dividends.
 
The advantage of making child care costs tax deductible is that it relies on market forces (rather than Government intervention) to determine work force participation and to allow legitimate costs of work force participation to be appropriately deducted from income.
Tax deductibility would assist in eliminating existing incentives for primary carers to stay out of the workforce, yielding a variety of benefits for individual families as well as the nation.
 
Tax deductibility of child care costs therefore deserves careful consideration and study. We accept that any such scheme would need to be supplemented with means-tested payments, to ensure that women in lower marginal tax brackets who cannot benefit as greatly from deductibility of child care are also appropriately supported.

However, this assistance should be in addition to a wider consideration of deductibility of child care costs. Of course, reducing costs is only half the battle. Availability of childcare places and workplace flexibility allowing part-time employment are also key factors.

But if we can make the tax system better recognise the true income-dependent nature of child care costs, we’ll take a significant step in the right direction.
 
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.