Showing posts from October, 2018

Refund of excess imputation credits – room for compromise?

Written by Bob Deutsch, CTA

Labor’s proposal to deny refunds for excess imputation credits from 1 July 2019 is a policy proposal which warrants careful consideration.

This is all the more so because the impact of the policy proposal, if implemented, will differ depending on the character of the recipient. In particular, in the context of individuals, anyone who receives the age pension or part thereof, will be exempted from the rule that would deny them an excess imputation credit refund.

Further, a self-managed superannuation fund (SMSF) will also be exempted from this rule if it has one member who as at 28 March 2018 was the recipient of the age pension or part thereof (or allowance).

It is interesting to look at the number of people and the distribution of cash refunds across four key categories as revealed in the table below:

Cash refund  Approximate number of people Individuals $2.3b  1,160,000 SMSFs $2.6b  420,000 Other super funds $300m  Unknown Tax exempt entities $700m  Unknown, but includes t…

Why become a tax agent?

Tax agent basics – everything you need to know about how to become one.
It’s no secret that paying tax is compulsory in Australia across big corporates, SMEs and at an individual level. Although the tax profession is transforming with the onset digitisation and regulatory changes, specialist knowledge and advisory services are still of major value. This is because clients, large and small, rely on their tax agent for the best advice and recommendations.
A tax agent offers professional services that relate to calculating or advising about liabilities, obligations or entitlements of clients under a taxation law, or representing entities in dealing with the Commissioner of Taxation, where the client can be reasonably expected to rely on the service to satisfy liabilities or obligations, or to claim entitlements, under taxation law.
To become a Tax Agent, you must be registered with the Tax Practitioners Board (TPB).
Education: It’s not too late to hit your career goals in 2018. Find out …

How to achieve Chartered Tax Adviser status

Theory-heavy lectures you’d probably fall asleep in? Think again.
In today’s ever-changing and increasingly globalised business environment, it is critical for tax professionals not only to be up-to-date, but also to be equipped to advise their clients on complex and dynamic business transactions. To be the best, you have to innovate, think on your feet, and synthesise large amounts of information.
How do you get there? Education.
This might cause some mixed responses. When you look back at your undergraduate studies, you may remember a lot of theory and in-depth text study.
Is that all you can expect from The Tax Institute’s CTA3 Advisory education program?
Not quite.
Learning through practical case studies
CTA3 Advisory is the final subject in the Chartered Tax Adviser (CTA) Program, after CTA1 Foundations, CTA2A and CTA2B Advanced. However, you may be eligible for credit toward the Chartered Tax Adviser Program if you have completed study at another institution.
The course relie…

CGT small business concessions and superannuation

The CGT small business concessions (CGT SBC) were originally introduced in the context of providing tax concessions for small business owners (and farmers) who treated their businesses as their “superannuation” and were denied the multitude of tax benefits that employees (and, particularly, public servants) could access through contributions to superannuation funds. Therefore, the ability to utilise the CGT SBC is highly valuable, as it enables a taxpayer to disregard a gain, as well as enabling a higher level of wealth to be added to superannuation.

This post excerpts chapter five of the new ninth edition of SMSF Guide, 'CGT small business concessions and superannuation', by Jemma Sanderson, CTA.

With the 2016-17 federal Budget resulting in substantial changes to superannuation, particularly with respect to considerable limitations to post-tax contributions, taxpayers should explore their eligibility for the CGT SBC, as it may enable additional amounts to be added to superan…

Navigating the Shifting Sands for Non-Resident Contractors

It has incredibly been over five years since Starbucks became embroiled in a corporate tax avoidance debate in the UK in the midst of the Global Financial Crisis in 2012, resulting in the occupation of its stores by UK tax activists and the subsequent deal with the UK’s HMRC to waive tax deductions and pay ‘voluntary’ additional corporation tax.

This lead to then UK Prime Minister David Cameron’s famous ‘Wake Up and Smell the Coffee’ speech at the World Economic Forum in Davos, making Tax one of his three key ‘T’ focuses for the UK’s presidency of the G8 in 2013 (the others being ‘Trade’ and ‘Transparency’) and thus arguably kick-starting the Base Erosion and Profit Shifting (BEPS) movement. I suspect he would not have been expecting the impact his call to arms would have on the future taxation of multinationals.

Shortly thereafter the OECD’s Base Erosion and Profit Shifting Project commenced which set out 15 Action Items, with recommendations for each being reported in 2015. Those…

Lessons in leadership from the frontline

Great leaders all share one thing in common. They acknowledge that acquiring and keeping good people is a leader's most important role. For me personally, leaders who make a difference are exposed, visible, take courageous action and intentional. Leader development is formal and informal, and should comprise education, training and experience. Development activities are easy to plan, but historically difficult to execute - and often the first thing to be cut when your unit is facing time pressures.” - Brigadier Susan Coyle, CSC, DSM
Brigadier Susan Coyle, CSC, DSM, commands the 6th Combat Support Brigade in the Australian Army.

An experienced military leader with more than 30 years of strategic, operational and policy experience, she has a reputation as a modern and inspirational leader who embodies values-based leadership.
Susan will deliver the keynote address at the 2018 Women in Tax National Congress, where she will share key aspects of her leadership philosophy with a prima…

Practical issues for interest withholding tax and section 128F

At the 2018 Financial Services Taxation Conference in February, Ian Kellock and Bronwyn Kirkwood (both Ashurst), presented the session ‘Practical issues for interest withholding tax and section 128F’. 
The session provided an overview of the Australian interest withholding tax (IWT), the public offer test exemption from IWT under section 128F, and the exemption from IWT available to financial institutions under some of Australia's double tax agreements.

In 2019, Ian and Bronwyn will return to the Financial Services Conference to provide an update in the session ‘Interest Withholding Tax – Common Issues’, looking at practical IWT issues using examples and case studies, as well as where things stand with proposals to reform IWT.

We excerpt Ian and Bronwyn’s original paper from earlier this year in this post.

An overview of interest withholding tax 

Australia imposes IWT of 10% on interest paid by Australian resident borrowers not acting at or through a permanent establishment out…

Recent developments in Australia’s international tax rules: The times they are a-changing

A lot has happened in international tax in the last year.

There has been an escalation in new tax developments, with significant changes happening within Australia’s international tax rules. 
In this article from The Tax Institute's journal The Tax Specialist, excerpted here, Michael Dirkis, CTA and Brett Bondfield, CTA, point out that change is likely to continue as states sign up to the various multilateral agreements such as the common reporting standard (CRS) and country-by-country (CbC) reporting and to the multilateral instrument.

The article provides an overview of recent developments and the potential changes to come in respect of:
transparency — public disclosure of tax information - looking at the voluntary tax transparency code and what the future may hold for the code;
taxation information-gathering regimes — three ATO information-gathering regimes considered in this section: the common reporting standard, country-by-country reporting and the proposed mandatory discl…

Expert reveals what to expect from tax study

Strong tax foundations are key to career success and education is the pathway. Here’s what you can expect from The Tax Institute.
Patrick Catena, CTA, is an independent consultant and CTA2B Advanced lecturer at The Tax Institute. His career spans public and commercial practice, and international tax experience in continental Europe working for one of the big 4.
“The fundamentals have not changed within the Australian tax industry, however the technical aspects are continually evolving” says Patrick.
“To be a proficient tax professional you need to have a fundamental understanding of our various tax laws and be able to work through relevant tax cases, ATO rulings etc.”
“The Government is continually updating the laws regarding international tax in order to ensure Australia is able to tax profits that have been earned in this country,” he explains.
“Australian tax professionals need to have a thorough understanding of domestic taxation laws and regulations together with a basic understan…