Showing posts from 2017

The R&D tax incentive – latest developments

Research and development (R&D) is becoming an ever-present form of business activity that companies engage in to ensure they remain relevant and competitive in domestic and international markets.

The government's R&D tax incentive, introduced in 2011, continues to evolve and taxpayers will have observed an increase in communications with the regulators in recent years.

In October 2017, The Tax Institute's Research & Development seminar in Sydney delved into the taxation consequences, benefits and topical issues related to the R&D incentive.

At the seminar, KPMG's Kristina Kipper and Dr Renee Levings presented a paper entitled 'The R&D tax incentive – latest Developments', which we outline below. 

Kristina is a partner in KPMG’s R&D Incentives group and is the National Sector Leader for Technology, Media and Telecommunications. Renee is Director, R&D Tax Advisory.

Since the R&D tax incentive began in 2011, registration numbers have increa…

Is there a place for morality and ethics in tax law?

Written by Robert Deutsch CTA *

The release of the Paradise Papers has triggered a strong response from many sectors of society. This has raised an interesting question. When structuring the affairs of a company, are company directors free to pursue whatever legal means are available to minimise tax payable without thinking about the moral and ethical dimensions of what they are doing?

In this context, there has been much judicial commentary dating from early in the last century.

Lord Macnaghten declared in Commissioner of Stamp Duties v Byrnes: [1]

“No one may act in contravention of the law. But no one is bound to leave his property at the mercy of the revenue authorities if he can legally escape their grasp.”

This was followed some 25 years later by the infamous decision of the House of Lords in Inland Revenue Commissioners v Duke of Westminster in which Lord Tomlin made the oft-quoted comment: [2]

“Every man is entitled if he can to order his affairs so that the tax attaching under …

33rd National Convention – what to look out for in the 2018 program

The Tax Institute's National Convention in Cairns next year will be all about reinvention.
Technology has caused an upheaval across the globe, with local tax practitioners reinventing and realigning their businesses to meet shifting client expectations. Keeping this in mind, the Convention’s organisers have developed a program that hones in on supporting practitioners and highlights issues that may not yet be on their radars.
Here we highlight a few key sessions and some of our presenters.
The Convention program includes strong representation from senior members of the Australian Taxation Office, with the Commissioner, Chris Jordan AO CTA to deliver his keynote address to delegates about the ATO’s plans for the year. The popular ATO Roundtable will return– a Q&A-style session which will cover a wide array of current technical issues that tax professionals are grappling with. You can also hear direct from the ATO’s Second Commissioner Andrew Mills CTA (Life) and Chief Tax Counsel …

Member profile – Annette Morgan

Annette Morgan is a lecturer in the Faculty of Business and Law at Curtin University in
Western Australia. We asked Annette about her career and life.

Member’s name Annette Morgan CTA

Company Curtin University

State Western Australia

Member since 2000

Areas of specialty SME tax services, tax administration and tax education.

How did you end up in tax? I ended up in tax completely by accident. I really wanted to be a police officer but apparently I was too short.

I attended secretarial school but luck should have it that my first job was with a small accounting firm in Nedlands, WA. I wasn’t suited to the receptionist job I applied for, but they thought I would make a great assistant to the accountants, and from there the passion for tax grew.

So, studies began in earnest, and after many years of working full-time and studying, I achieved my Masters in Taxation and finished my professional years of study as a CPA. This year, I celebrated 30 years in the tax profession and the passion i…

Transfer balance cap: time to consider post-30 June 2017 issues

The introduction of the transfer balance cap measures led to a frantic amount of activity for self-managed superannuation fund (SMSF) advisers and their clients in the lead up to 1 July 2017. In an article excerpted below from the Taxation in Australiajournal, authors Daniel Marateo and Peter Slegers CTA seek to demonstrate that it is an opportune time for advisers to consider the ongoing issues associated with the transfer balance cap regime.

Daniel Marateo is a lawyer in Cowell Clarke’s Tax & Revenue and Superannuation practice groups. Peter Slegers is a partner and team leader of Cowell Clarke’s Tax & Revenue and Agribusiness practice groups. Daniel was part of the team assisting Peter and co-author Nicole Santinon in producing the SMSF Income Stream Guide, published by The Tax Institute. 
In the article, Daniel and Peter highlight how, due to subsequent legislative developments and ATO pronouncements, transition to retirement income streams, broader succession planning is…

How the tax profession can stay relevant

by Steve Healey CTA (Life) *

Some members of the tax profession have argued that the Australian Taxation Office – by introducing automation, standard business reporting and other efficiencies – has stepped ‘over the line’ and is ‘taking’ processing and compliance work away from accountants and tax advisers.

Examples they have cited include myTax and the expansion of other ATO self-service products at the expense of maintaining and improving those that supported tax practitioners such as Electronic Lodgement Service (ELS), Practitioner Lodgement Service (PLS) and Tax Agent Portal.

I suggest that the ATO isn’t reducing the traditional work of accountants. Technology and technological change is. It’s essential for practitioners to accept this fact and move forward. The profession’s reaction is, of course, similar to that of other professions and industries that are seeing their traditional models disrupted by technological change. Examples include the taxi, transport and accommodation s…

When is a company 'carrying on a business'?

written by Stephanie Caredes CTA *

Once upon a time, it was clear what the tax rate was that applied to a company. There was only one rate that could apply and that was it. Along came the two-tiered corporate tax rate system in the 2016 income year, the idea being that small business companies should get a lower tax rate of 28.5% instead of the usual 30%.

That was all very well until the plan changed again and it was decided that small business companies should get a rate of 27.5%, with the eligibility turnover planned to increase progressively until all companies, whatever their size, could access the lower rate.

With this change came the introduction of a new term, a ‘base rate entity’, into the Income Tax Rates Act 1986 (Cth) (Rates Act) which is used to determine which companies can access the lower company tax rate of 27.5%. At the time of writing, the term ‘base rate entity’ is defined in the law as:

Section 23AA Meaning of base rate entity

An entity is a base rate entity for a ye…

The Hon. Anna Bligh AC & Karen Payne to review changes in financial services – 2018 Financial Services Taxation Conference

For the past 15 years, leaders from across the financial services sector have kicked off each new year at The Tax Institute’s Financial Services Taxation Conference. The 2018 event in February will prove to be no different, with prominent figures setting the agenda and grappling with the big issues.

The program will feature a keynote address from The Hon. Anna Bligh AC, Chief Executive Officer of the Australian Bankers’ Association and former Premier of Queensland.
Anna will review the legislative and administrative changes proposed or enacted in 2017. From the diverted profits tax to hybrid mismatch rules, she will assess the impact these measures have had on the sector and more broadly. She will also look at the Turnbull government’s bank levy and proposals such as the Corporate Collective Investment Vehicle regime, the introduction of a mandatory disclosure regime, and issues related to transparency.
In addition, Anna will present her view on the effective taxation reforms that co…

Latest free technical paper - 'Transfer balance cap and CGT relief'

Each month, members of The Tax Institute can access a complimentary, recently-published technical paper that provides up-to-date information on a relevant issue for tax professionals.

The most recent paper is Practical solutions to the new super regime – transfer balance cap and CGT relief by Jemma Sanderson CTA.

Jemma is a Director at Cooper Partners Financial Services, heading up their SMSF specialist services. She provides strategic advice on SMSFs, estate planning and wealth management to clients, as well as technical support to accounting, legal and financial planning groups.

Jemma has over 17 years’ experience in developing complex strategies for high net worth clients. She is a regular presenter on superannuation and SMSFs for The Tax Institute and other professional bodies across Australia. She is also the author of the popular SMSF Guide published by The Tax Institute, currently in its 8th edition, and is the author and convenor of The Tax Institute’s Graduate Diploma of App…

Trusts: ATO Tax Avoidance Taskforce perspective – 2017 SA Trusts Day

Despite relative legislative stability in recent times, trusts practitioners are still often challenged by the complexities inherent in the application of rigid taxation laws against trusts.

The continued focus of the ATO and its Tax Avoidance Taskforce means advisers must be diligent, vigilant and aware of potentially risky areas that the ATO is looking at.

We spoke with Simon Haines FTI, a Senior Tax Counsel (Assistant Commissioner) in the ATO’s Tax Counsel Network, about the ATO’s approach and his upcoming session at the SA Trusts Day on 1 December 2017.

Simon told us that “the Taskforce continues to investigate risky arrangements involving the use of trusts for tax avoidance and evasion. This work started after the 2013–14 Budget with the Trusts Taskforce, and is now continuing under the operational umbrella of the Tax Avoidance Taskforce – Trusts.

"To support this work, we’re looking to provide the tax profession (and wider community) with up-to-date information about some …

GST coming for your online cart – Australia’s proposed tax changes to low-value imports

Written by Geoff Mann, Partner & Elke Bremner, Senior Associate – Ashurst*

Stock up on your Nike running shoes, your Kate Spade handbags and your Stephen King novels now as, come 1 July 2018, you may be paying an additional 10%.

As part of the 2016/17 Federal Budget the Treasurer, The Hon Scott Morrison, announced that the Goods and Services Tax (GST) will be extended to low-value goods imported by consumers. The announcement followed the Government's 2015/16 Federal Budget measure of broadening the GST base to impose GST on acquisitions of intangible supplies and digital products where the recipient of the supply is an Australian-based consumer.  
Under the current law, no GST is payable on the purchase of goods from a non-resident online retailer unless the value of those goods exceeds A$1,000. Where the value exceeds A$1,000, the customer will be required to pay the GST on the purchase to the Australian Border Force before the package will be released for delivery. Under th…

Member profile – Rosemary Campbell

Rosemary Campbell CTA is Director of Taxation and Business Services with Merit Partners, Chartered Accountants, in Darwin. She has over 29 years’ experience providing advice on federal and state taxation, as well as financial and business matters.

We spoke with Rosemary about her career and her life.

Member’s name Rosemary Campbell CTA

Company Merit Partners Pty Ltd

State Northern Territory

Member since 1992

Areas of specialty Income tax advice to SMEs, CGT concessions and succession planning.

How did you end up in tax? My career started in Townsville with my first job as a graduate accountant.

A subsequent move to Darwin and employment with a 'Big 4' firm saw the need to specialise for career advancement.

I’ve never regretted the move to specialise in tax, as it is constantly changing and continues to provide challenges. It's satisfying to know that you have helped a client navigate the complexities of tax advice so they are able to make an informed decision as to the be…

The 2017 great debate

written by Stephanie Caredes CTA *

On 16 August 2017, The Tax Institute held the 2017 great debate on the Australian tax system. This was a joint initiative of The Tax Institute and the Australian Tax Research Foundation.

The thought leader behind the debate was Senior Tax Counsel, Robert Deutsch. He selected key issues in our tax system and gathered tax professionals who are experts in their field to debate the merits of the following:
whether the current list of CGT events should be removed and replaced with a more coherent, conceptually based systemwhat the new rules could look like if all work-related deductions were abolished and provision was made for a one-off $1,000 annual deductionwhat a simplified set of residency rules could look like for individuals and companies if the current rules were removedwhat new rules could replace the CGT discount and negative gearingchanging the imputation system for a different modelwhether the tax advantages for stapled securities should be end…

Do your unconscious gender biases get in the way of decision-making?

Gender equality in the tax profession has received a lot of attention lately. And rightly so. The percentage of women practising in tax increases each year, and more women aspire to be emerging thought leaders.

However, whilst many men and women advocate for women in the profession, why are there still so few women in leadership positions? The answer might lie in the fact that we all practise something called the unconscious gender bias.

Unconscious gender biases are the unwitting, implicit associations of men and women that we harbour in our subconscious minds that affect our everyday actions and decision-making. For example, when ‘Partner at a big firm’ is mentioned, do you picture a male or female leader? Your answer depends on your unconscious gender bias and becomes problematic when it negatively affects your ability to be inclusive and supportive of female leaders in the workplace.

“Current measures aimed at addressing gender bias in the tax and transfer system are arguably not…

2016 duces share their experience of learning with The Tax Institute

Here at The Tax Institute, we’ve always been confident about the quality and value of our education programs. For additional feedback, we spoke with two of our highest-performing students from study period 3, 2016.

Kelly Venhuizen
Kelly Venhuizen is a Manager with the family and business advisory firm Chapman Eastway in Sydney. She was Dux in our CTA2B Advanced subject.

We asked Kelly about her career to date.

“I have spent most of my career on the south coast,” she said. “However, I moved to Sydney three years ago to further my career and education. During my time in Sydney, I worked at a ‘big four’ accounting firm, but I recently accepted a position at a boutique firm.”

“My focus has been on business services and providing relevant and practical advice to clients is at the forefront of my values.”

Kelly told us she enrolled in CTA2B Advanced because “an adviser’s education is never complete.”

“I have the attitude that we should always be extending and refining our knowledge to prov…

Transitioning a company for wind-down or exit – 2017 WA Tax Intensive

Preparing a company for the exit of the current owners or a winding-down presents a unique set of challenges.

Transferring the company or its business assets to new ownership often means that financial relationships need to be unwound or cleared at either or both the company and shareholder level.
From forgiving debts and dealing with shareholder loan accounts to decisions on liquidation versus capital reduction or share buy backs, there are also complexities with ss 45A, 45B, and 177EA. In addition, advisers need to ensure they've considered the debt equity rules, pre and post CGT shareholdings and how any value will be extracted using the small business CGT concessions.
Chris Wookey CTA is a Principal in the tax consulting division of Deloitte Private in Melbourne. At the 2017 WA Tax Intensive in November this year he presented ‘Transitioning a company for wind-down or exit’, a two-part session covering the key tax issues arising when a company is wound down or when certain shareho…