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Showing posts from September, 2019

Legal professional privilege – a sword or just a shield?

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Written by Bob Deutsch, CTA

Legal professional privilege (LPP) is an important common law protection for individuals which allows them to obtain competent legal advice without fear that the very legal advice can subsequently be used against them in legal proceedings. However, this protection, while real, is limited in that it can be used as a shield but not as a sword. The limits became apparent in the High Court decision in the recent Glencore v Commissioner of Taxation litigation – the facts of which can be succinctly summarised as follows.

In 2017, there was a leak of a set of some 13.4 million files emanating from an offshore law firm known as Appleby to an organisation called the International Consortium of Investigative Journalists. The huge file has become known as the rather exotically titled Paradise Papers and in it are revealed the details of hundreds of individuals and companies utilising a variety of secretive and complex tax schemes entered into by a number of prominent …

Foreign Resident Capital Gains Withholding – Three Years On – Where Are We Now?

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Three years after the introduction of the Foreign Resident Capital Gains Withholding rules there have been some evolution in the practice and some surprising instances where the rules can apply.
We spoke with David Earl and Lynn Koh ahead of their presentation at the upcoming VIC 7th Annual Tax Forum on 17-18 October 2019.
The good and the not-so-good
“This session is aimed at briefly revisiting the introduction of the rules, an outline of what they were trying to achieve and the practices that have since developed in the market – both good and not so good” says David.
“We’ll try to help attendees understand when the foreign resident capital gains withholding rules apply and what potential options might be for dealing with the rules” adds Lynn.
Attendees will learn what to look out for in different transaction scenarios, some practicalsteps, as well as what the ATO’s current views and expectations are, and the risks to be managed from these rules.
David says, “The ATO have amazing res…

Why GST isn’t it Simply 10%

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Almost 20 years since the introduction of the Goods and Services Tax Act, tax practitioners and businesses wonder why GST issues still seem to arise so frequently.
We spoke with Ken Fehily, CTA, (Fehily Advisory) ahead of his presentation at the VIC 7th Annual Tax Forum on Unexpected GST Issues that GST Specialists Come Across.
At the VIC 7th Annual Tax Forum, Ken will take delegates through the real advisory assignments he’s worked on, large and small, in recent times.
“Businesses, and even some tax practitioners who are not GST specialists, often wonder how someone could still be advising on GST 19 years since its introduction - isn’t it simply 10%?” Ken explains.
“The issues that crome up are often unexpected, surprisingly material, and often totally avoidable.” Using his firsthand experience, he will explain how to best handle interventions from the ATO.
Delegates will also hear about “options in the GST law, and how to best make choices to achieve the optimum commercial outcomes…

Communication skills you need to succeed in tax

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To go the distance as a successful tax advisor, strong communication skills will be in your repertoire.  Whether you’re trying to secure employment in the profession, make the next step upwards, or take over a new client, your communication skills are just as important as your technical education and work experience to achieve and maintain a successful career in tax.

The ability to communicate involves digesting information and explaining solutions – in writing and in person. It also requires the capacity to write clearly, listen actively and speak persuasively.

Successful tax advisers can write concise, yet comprehensive letters of advice. They know how to articulate the details and implications of complex legislation to their clients in face-to-face meetings.

They also know how to interact effectively with their colleagues.

In this complimentary eBook, we’ve narrowed down communication to five key skills. Master these, and you’ll stay on track for a successful career in tax.
Writin…

Residency – Individuals (and trusts)

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This post is an excerpt from the paper 'Residency – Individuals (and trusts)', this month's free technical paper for members.

Individual tax residency is a ‘hot topic’ which will only continue to be the case given the complexity and factual driven nature of the relevant tests and the increasing global mobility of individuals.

The drafters of the individual residency test, developed in the 1930s, could not have envisaged the application of their test to factual circumstances that occur today.

Cheap global travel and the opportunity to move between countries for work and lifestyle reasons must have seemed fanciful only a few years after Charles Lindberg’s ground-breaking 33 ½ hour flight in 1927 across the Atlantic.

The individual residency tests need reform to simplify determining when a person is, or is not, an Australian tax resident.

In 2018, the Board of Taxation (Board) recommended a new bright line test. The then Assistant Treasurer ‘welcomed’ the report and asked the …

Using tax havens – the not so bad, the bad and the downright ugly!

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Written by Bob Deutsch, CTA

The use of tax havens in tax planning remains a contentious and highly charged area of public policy debate.

To be clear, when it comes to the use of tax havens, there are at least two quite distinct ways in which such havens have historically been used (or perhaps, more accurately, misused):
Firstly, such havens have been openly used as part of an overall tax structure within a multinational group to achieve certain tax and in some cases other advantages;Secondly, such havens have been used secretively to warehouse income offshore to evade tax in “high tax” countries such as Australia. The first use relies on solid, usually quite complex tax and regulatory advice which enables the participants to “skirt” all the difficult obstacles presented by Australian and foreign tax and regulatory issues. On the Australian tax front, such tax obstacles include:
the controlled foreign company (CFC) rules; the transferor trust rules; the multinational anti-avoidance…

Qantas tax leader’s win ticked a tangible KPI box

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Mark Bradford, CTA was named Chartered Tax Adviser of the Year in 2016.

He tells us why applying was so worthwhile and offers his advice for those looking to apply in 2020 in this post.
Head of Taxation at Qantas, Mark says winning the title was certainly noticed within the tax profession and by fellow colleagues.
The calibre of finalists and past winners made the award more prestigious and humbling,” he says.
“It was a personal badge of honour to be fair, and a recognition of my team as much as me.
“I was also able to include a special Institute 'Chartered Tax Adviser of the Year' email signature for the next 12 months and that also helped!” he laughs.
Mark remembers travelling to Melbourne for the Gala Dinner, dressed in black tie.
“I was actually very nervous,” he admits.
“I prepared an acceptance speech, but to be honest I did not think I would need to use it as I had assumed that Tony Frost of Greenwoods & Freehills would win it over me!”
When Mark was crowned Chartered Ta…

R&D tax incentives - Moreton Resources

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This month's Monthly Tax Update looks at the significance of the decision in the Moreton case to R&D activities.

This post, produced by Brown Wright Stein Lawyers, covers the facts of the case.

In around 2006, Moreton Resources Limited commenced plans to develop an underground coal gasification (UCG) facility near Kingaroy in Queensland.

The facility would include a gas processing plant and a 400 megawatt gas turbine power plant to produce electricity.

Before commencing construction on the plant Moreton undertook a pilot project to test the viability of using UCG technology to produce UCG synthesis gas (syngas) that would then be cleaned and stabilised for production of electricity using gas turbines.

The pilot project failed as in March 2010 the facility broke down after five days of operation and caused underground water contamination.

The EPA ordered the facility be shut down and USG was subsequently banned. Moreton continued to do work in relation to the pilot project in …

Tax Awards: “the single most beneficial event of my career”

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2014 Emerging Tax Star Matthew Andruchowycz, CTA, reflects on winning the award and shares his advice for next year’s contenders.
Matthew is a Tax Lawyer at Kovich & Co, who specialises in superannuation and tax law.

He was named Emerging Tax Star in 2014.
“I think it has been the single most beneficial event of my career, outside getting lucky with my first tax mentor and team and being busy with good work for those first five or so years,” he admits.
“The award helped me distinguish myself right at the time when I was starting to have more one on one interactions with clients and referrers and trying to build my own brand. 
“My main focus is SME so it’s all word of mouth and the award seemed to have the effect of justifying and reinforcing people’s belief in me.”
A worthwhile experience
Matt says the entire process of entering the awards was 100% worth it.
“Preparing the application forces you to reflect,” he says.
“The applications are also confidential.
“If you’re not nominated n…