Friday, 27 February 2015

Single Touch Payroll

The Government recently announced a red tape reduction initiative for employers in the form of simplifying tax and superannuation reporting obligations through Single Touch Payroll. An ATO consultation in relation to the initiative is under way:
https://www.ato.gov.au/General/Consultation/What-we-are-consulting-about/Papers-for-comment/

Under Single Touch Payroll, employers will be required to electronically report payroll and super information to the ATO when employees are paid, using Standard Business Reporting-enabled software. It will be available from July 2016, but employers will be required to use appropriate payroll software to access it. The Government is yet to make final decisions on its implementation and hence is seeking stakeholder views.

The ATO is seeking views on various facets of this initiative, including the potential for employers to remit employee pay as you go withholding and the super guarantee at the same time employees are paid.

Should members have any comments, please send them through to Tax Policy as soon as possible.


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, 23 February 2015

Is your accounting firm making the most of its new grads?

The role of graduates is changing. As low-level work is increasingly outsourced, firms are contemplating how to make accounting graduates effective in the early part of their career lifecycle. Are your graduates gaining the skills they need to be effective now and in the future?

The changing role of graduates – bearing the brunt of industry changes

As more firms send basic tax work offshore to benefit from lower cost labour, two issues are created: low-level compliance work, on which graduates ¬previously cut their teeth, is less readily available, while outsourcing engagements require a different ¬partner-to-staff ratio that includes fewer graduates and more managers.

These trends, which are already affecting the number of graduates firms take on, have the potential to dramatically alter the career path of accounting graduates and flatten the hierarchical management structure of accounting firms.

With these changes, many firms are being forced to consider how to make their graduates effective in the earliest part of their career lifecycle. They are questioning how to address the even wider skills gap between graduates leaving university and starting in the profession, and what impact this will have down the track when employees lack the fundamental knowledge that was traditionally built through compliance work.

Growing up quickly – advising clients earlier

A number of firms, particularly larger firms, are responding by adapting their training programs to make graduates more relevant to clients earlier in their career.

This involves young practitioners being exposed to more technical client work earlier and so becoming more skilled in advisory work earlier, generally with the added benefit of financial gain for both the graduate and the firm.

However some question whether graduates, at this early stage of their career, are mature and knowledgeable enough to deal directly with client issues and behave and respond appropriately.

Graduates themselves have told us  that one of their main challenges, in addition to understanding tax complexity and relevant tax laws, is meeting and managing clients.

Building well-rounded young tax professionals – are your training plans keeping up?

Whether you offer a formal or informal training program for your graduates, your new recruits require more than just technical training.

To become well rounded and valued members of the team, graduates need solid tax knowledge and skills, but they also now need the ability to apply this knowledge and make sound decisions and professional judgements, as well as the ability to interact with clients and colleagues in an effective, reliable and appropriate manner.

The Tax Institute is offering a new seminar series designed to transition your graduates from ‘book smart’ to ‘work smart’. It has been designed in response to employer and graduate feedback to help young practitioners become more well-rounded and valuable to their firm and clients earlier in their career.

The program has been developed exclusively for practitioners with less than three year’s tax experience who want to build their confidence in assessing client situations, contributing to client discussions, and making sound professional judgements in situations with both clients and colleagues. It will also help graduates understand the importance of self-awareness when building a strong personal brand and becoming a positive ambassador of their organisation.

This five part series will be held in Sydney commencing April 2015.

Training for young tax practitioners is held in each state. For more information please visit our website and search by your location.

To find out more visit our website or email Cherish Renshaw.


Jessi Towns is National Project Manager 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.





[1]Surveys and focus groups undertaken in 2014 as part of The Tax Institute’s Lifecycle Project.

Friday, 20 February 2015

Submission to Treasury

This week we finalised our submission to Treasury in relation to the draft legislation relating to look-through treatment of instalment warrants and receipts.

This is a positive initiative by the Government albeit this is a long-awaited legislative clarification.

We are supportive of the Government's stated policy intent behind this measure, namely to: 'provide look-through income tax treatment for instalment warrants and instalment receipts to remove uncertainty about the taxation treatment of such arrangements and to prevent disruption of the significant market that existed for such arrangements at the time of announcement of this measure'.

In summary, our submission offers the following comments to ensure that the legislation gives effect to the policy intent:
  • Broaden the underlying assets covered;
  • Include a saving rule for matters outside the investor's control;
  • Remove (or amend) the limited recourse requirement;
  • Allow charges over underlying assets;
  • Clarify that it is the immediate owner who is deemed to own the asset;
  • Clarify that other look-through provisions continue to apply if you fall outside these amendments;
  • Clarify that other look-through provisions do not apply if you fall inside these amendments;
  • Ensure that the qualified person rules will operate as intended; and
  • In relation to Limited Recourse Borrowing Arrangements, use consistent terminology and ensure that the amendments apply after any borrowing is repaid.

A detailed discussion of these issues may be found in our submission to Treasury. Thank you to members who contributed to this paper.


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, 16 February 2015

Website re-design

Free membership trial for your colleagues

Do you have friends or colleagues who would benefit from membership of The Tax Institute?
If so, let them know about our free membership trial running during March. Following the popular October trial, all registrants will get to experience a selection of the benefits and resources that members have daily access to.

Go to taxinstitute.com.au/member-trial to find out more.

Have you downloaded our app?

The Tax Institute app brings you Taxation in Australia each month on your iPad or Android tablet alongside a range of great content from The Tax Institute. You’ll also find each week’s TaxVine in the app, together with your free paper of the month. Download the app from iTunes or Google Play and discover what’s new for yourself.

TaxWise News

If you’re looking to grow your business in 2015 or need a way to add value to existing client relationships, TaxWise News can help. Full of up-to-date, relevant and practical information, this is a simple, cost-effective way to communicate with potential and existing clients.

Click here to find out more.

Summer Sale on now

Our summer sale includes some great offers on a wide range of books, CPD on DVD titles, and more. Save up to 50% and pick up one of our special CPD on DVD boxset offers, back by popular demand.

Click here to view the sale

New website design

You may have noticed some changes to the way our website looks and works. Late last year, we asked our members and website users for feedback on our website. Based on your feedback, we’re:
  • simplifying the layout to make it easier to find information;
  • reducing the volume of content on pages as some were considered “busy”, “confusing” and “cluttered”;
  • reviewing our language to ensure that we use “familiar” terminology;
  • changing the navigation on the website to reflect how products and services are searched for;
  • removing “unnecessary” content on the website, particularly on the homepage; and
  • creating an area where you can find and access the resources and benefits available to you as a member.

We hope you enjoy the new website experience. Keep an eye out for an updated home page which will be rolled out soon. For feedback and assistance please email
webassist@taxinstitute.com.au.


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, 13 February 2015

Proposed changes to Employee Share Schemes

This week in Canberra I had the opportunity to represent members' views with regards to proposed changes to the law covering employee share schemes. I attended a roundtable meeting with the Small Business Minister, The Hon Bruce Billson MP, where I spoke to the Tax Institute's recent submission to the Government on this matter.

As members have advised, we support the changes proposed to the taxation of employee share schemes. The proposed changes go a long way to reversing the unfavourable amendments made to these rules in 2009 that, in particular, hindered start-ups from providing shares or rights to employees in a cost-effective manner.

In particular, we strongly support the following proposals:
  • reversing some of the changes made in 2009 to the taxing point of rights;
  • extending the maximum tax deferral period from 7 years to 15 years;
  • changing the refund rules so they can apply to lapsed rights;
  • changing the option valuation tables; and
  • introducing employee share scheme concessions for start-ups.

However, there are a number of technical issues in the proposed changes that we suggest warrant further consideration.

The good news is that Treasury seem favourably disposed to addressing many of the issues we have raised. A detailed discussion of these issues may be found in our submission to Treasury. Thank you to members who contributed to this paper.

Treasury's new direction

The Department of the Treasury has a new Secretary, John Fraser, who has recently commenced in the role. Formerly the head of UBS Global Asset Management based in London, he is returning to Canberra and the Department that he last worked in in 1993 as a Deputy Secretary.

The Treasurer has asked him to conduct a thorough review of the Treasury's resources and capabilities. Already emerging from this, is the decision to establish a Treasury presence (by opening offices) in both Sydney and Melbourne. This is a positive step, as it can only serve to increase the engagement with business and other key stakeholders who invariably do not spend the majority of their time in Canberra.


Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Tuesday, 10 February 2015

National Convention Speaker Profile: Damien Browne

Damien is an Assistant Commissioner in the Review and Dispute Resolution line of the Australian Taxation Office. His responsibilities include ATO dispute resolution policy, practice and capability and managing the ATO’s relationship with the legal profession. Prior to joining the ATO in 2007, Damien was Special Tax Advisor to the Commonwealth Ombudsman.

How long have you been affiliated with The Tax Institute?

From about 2004/5, when I joined the Tax Team at the Commonwealth Ombudsman’s office.

What does the National Convention mean to you, and more broadly, to the tax industry?

A great opportunity for bringing together different perspectives from across the tax industry and profession.

What is the topic that you are presenting and what can attendees expect to learn?

I will be covering the latest on the ATO’s management of Tax Audits and Disputes” (jointly with Ashley King from PwC).

They can expect to hear insights on recent developments in tax administration, particularly around early engagement and dispute resolution.

How will attending your session help delegates help their clients?

Greater awareness of the ATO’s new approaches to engagement, especially in avoiding or resolving disputes.

Which other sessions at the conference are you most interested in attending?

Jeremy Hirschhorn and Greg Travers on Part IVA; Bernard Salt’s Demographic Trends session; the Commissioner’s address; Henry Ergas’s session on Tax Reform; Daniel Smedley’s session on Trusts; Mark Robertson on Fraud or Evasion; Phillip Bender’s review of recent cases.

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

Get lost in a good book – mostly history and alternative histories.


Join us on the Gold Coast for The Tax Institute's 30th National ConventionWith an expert team of leading tax professionals shaping the content and a growing list of delegates who are amongst the best and brightest in the tax profession, the National Convention is undoubtedly the premier taxation conference in Australia.

Monday, 9 February 2015

A Milestone for the National Convention

This year marks the 30th anniversary of the National Convention and it is set to be bigger and better than ever before.

Recognised as Australia’s premier taxation conference, the National Convention is being held at the RACV Royal Pines, Benowa, in Queensland on 18 to 20 March 2015.

As always, the convention has been developed by an expert team, with over 30 sessions addressing the latest tax issues and a program that is technically relevant and practical. It is designed to meet the needs of tax professionals in all industries, at all stages of their career.

Visit taxinstitute.com.au to find out more or to register.

Improve the quality of tax knowledge within your organisation
 
To ensure the success of your organisation, it is imperative that your employees have sound, up-to-date tax knowledge. The Graduate Diploma of Applied Tax Law will equip them with the skills and knowledge required of tomorrow’s tax professional.
 
The Graduate Diploma of Applied Tax Law will benefit your organisation and employees by:
  • strengthening their tax knowledge and honing their skills as tax professionals;
  • demonstrating to clients that they are serious about tax;
  • building on their tax knowledge and their ability to apply it to a range of complex situations;
  • earning a qualification and postnominal, GDATL, that is known for its rigour and high academic standards; and
  • providing well-informed tax advice confidently.

The first study period for the Graduate Diploma of Applied Tax Law commences on 2 March 2015.
 
For more information, go to taxinstitute.com.au/GradDip.

Financial Services Taxation Conference
 
Join us in Surfers Paradise for the 2015 Financial Services Taxation Conference, taking place on 18 to 20 February. The wide-ranging program covers TOFA, Pt IVA, infrastructure, transfer pricing, and more.

For more information, visit taxinstitute.com.au


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, 6 February 2015

A time of uncertainty

Uncertainty, instability and inaction: not the name of the latest trio to have taken the music scene by storm, but unfortunately these are becoming hallmarks of the current Federal Government.

All taxpayers require certainty in the identification and scope of tax laws that frame both their obligations and their liabilities.

Such certainty is essential to the proper functioning of our tax system for a variety of reasons, including the need to allow:
  • taxpayers to self-regulate behaviour in order to minimise tax risk;
  • the fostering of voluntary and informed compliance with tax laws;
  • taxpayers to make investment decisions and strike commercial bargains with certainty as to the tax cost resulting from the relevant transaction;
  • corporate taxpayers to make informed dividend policy decisions; and
  • listed companies to produce timely financial statements that accurately reflect their tax expense.

The more our political leaders play politics, the less they are able to focus on the main game of governing. The length of the current list of outstanding tax changes is still causing significant uncertainty within the taxpayer community and may be distorting investment, expenditure and dividend policy decisions. The Government committed to legislate the unenacted measures last year, but we are still left with close to 20 measures that have not made it into the statute books.

Similarly, the Tax White Paper process is being constantly delayed, which makes it harder and harder for tough policy ideas to be debated over a time period that does not rush the community through the conversation on the need for tax reforms. After all, we are approximately 18 months out from the next Federal Election.


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, 2 February 2015

The taxation of multinationals

With the Federal Parliamentary year kicking-off in coming weeks, we will see attention once again directed towards taxation of multinationals.

The Senate Economics Committee Inquiry will soon commence public hearings into 'potential tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia'.

Australia is renowned for having one of the most complex and robust tax systems in the world. As members are well aware, this complexity creates great difficulty for taxpayers navigating their way through the system to determine their obligations under the law. However, the robustness of our tax system serves to markedly reduce the opportunity for a taxpayer to not comply with their obligations.

Our dividend imputation system incentivises corporations to pay company tax in Australia. In addition, Australia has recently seen a further tightening of laws to target tax avoidance directly and indirectly. This has included changes to the general anti-avoidance provision and in respect of international dealings, a tightening of the thin capitalisation rules and new transfer pricing rules.

Media reports have suggested that large corporations (whether Australian or multinational) are not paying their 'fair share of tax'. We believe this view is largely incorrect and based on a great deal of inaccurate and misleading information published during the past year. We do recognise that there may be some instances where inappropriate tax outcomes are obtained. Generally this arises where the interaction between the tax rules of different countries leaves opportunities for income to remain untaxed.

Currently, there are co-ordinated efforts by the OECD countries to address base erosion and profit shifting (BEPS). We support Australia's involvement in this work and in particular, the work in the area of the digital economy to address the gaps that exist that allow for double non-taxation. Australia should be involved in the outcome of the OECD's work in this area to ensure that income derived by multinational corporations in particular is subject to an appropriate level of taxation.

This is not an issue that Australia can nor should address alone.


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.