| Brought to you in association with Thomson Reuters | Your weekly tax update | 1 October, 2009 |
|
Board of taxation review — legal framework for administration of GST We are currently preparing a submission in response to the second discussion paper with the assistance of our Indirect Tax Committee. The measures covered by this paper relate to adjustments, GST self-assessment, partnerships, bare trusts, running balance accounts, non-profit sub-entities, and refunds of overpaid GST. Comments on any of the above matters can be emailed to tax@cpaaustralia.com.au by Friday 2 October 2009. Draft GST legislation
timetable Consultation paper: proposed new R&D tax incentive The government announced in its 2009 – 10 Federal
Budget that the existing R&D tax concession would be replaced with a
new incentive from 1 July 2010. On 18 September, the Treasurer and
Minister for Innovation, Industry, Science and Research released a
consultation paper on the new incentive. As CPA Australia (and other bodies with an interest in this area) have some concerns regarding the effectiveness of the proposed new R&D tax incentive, we shall be preparing a submission on this matter and would welcome input from members which can be emailed to us at tax@cpaaustralia.com.au by Thursday 15 October 2009. Combined national tax liaison (NTLG) / Division 7A working party meeting This combined meeting was held on 25 September to discuss concerns raised by external members regarding the application of Division 7A to unpaid present entitlements (UPEs). Key outcomes of the meeting were:
Minutes of the meeting are in the process of being drafted by the ATO and will soon be distributed to external members for comment. Upcoming ATO tax practitioner forum meeting Issues identified to date by external members for this meeting include:
Upcoming consultations and meetings
Member enquiries or issues for these meetings can be sent to tax@cpaaustralia.com.au
2009 PAYG withholding payment summary annual report — lodgment concession The ATO has reminded tax agents that they now have until 30 November (previously 15 September) to notify it of any additional clients requiring the 2009 PAYG withholding payment summary annual report lodgment concession. The ATO says it will not process requests received after this date and tax agents will receive a letter advising that the request has been received too late. ATO IDs: two new; one withdrawn The ATO has released the following IDs:
The ATO has withdrawn ATO ID 2009/50 (assessability of foreign branch income derived from New Zealand). ATO website updates From the ATO website:
Private ancillary fund guidelines made The Taxation Administration Act 1953 — Private Ancillary Fund Guidelines 2009 have been registered and the set minimum standards for the governance and conduct of a private ancillary fund and its trustee. The Commissioner of Taxation now regulates these funds. The guidelines commence on 1 October.
ATO on SMSF compliance risk In a recent speech, ATO's Assistant Commissioner, SMSF segment, Stuart Forsyth, discussed the ATO's approach to compliance issues relating to self-managed super funds (SMSF). In particular, Mr Forsyth discussed a recent AAT decision regarding an SMSF and a breach of the in-house asset rules. Mr Forsyth said the ATO was undertaking more compliance activities than ever before and he said this will lead to more trustees being disqualified or prosecuted than in the past. However, he said every case will be judged on its individual merits. ATO website updates on superannuation From the ATO website:
Superannuation assets up in June 2009 quarter APRA has released its June 2009 quarterly superannuation performance publication, which shows total estimated assets grew over the quarter by $64.9 billion (or 6.4 per cent) to a total of $1.08 trillion.
The following rulings were released by the ATO on 30 September:
Capital loss of $1.5 billion allowed In AAT Case [2009] AATA 750, Re News Australia Holdings Pty Limited and FCT, the AAT upheld a taxpayer's appeal and held that the Commissioner of Taxation should not have cancelled a $1.5 billion capital loss tax benefit. Body found not to be a charitable institution In FCT v Aid / Watch Incorporated, the Full Federal Court upheld the Commissioner of Taxation's appeal and found that the taxpayer was not a charitable institution within the meaning of s 50 of the ITAA 1997. Sale of foreign currency not GST-free In Travelex Limited v FCT, the Full Federal Court reaffirmed that a sale of foreign currency for use outside of Australia was not a GST-free supply under Item 4 of s 38-190(1) of the GST Act. Suspension of tax agent confirmed In AAT Case [2009] AATA 741, Re Hannaford and Tax Agents' Board of Queensland, the AAT confirmed the decision of the Tax Agents' Board of Queensland to suspend a tax agent's registration for 30 days because of his deliberate failure to respond to correspondence from the board in relation to a complaint made by a client to the board. No deduction for interest and loan service costs on advance to partnership In AAT Case [2009] AATA 744, Re Jones and FCT, the AAT held that a purported loan to a partnership was in fact an investment of capital in the partnership and, therefore, deductions claimed for interest and loan service costs were not deductible. Advances from trust found to be income, not loans In AAT Case [2009] AATA 726, the AAT confirmed that 'advances' totalling over $175,000 made from a trust to the taxpayer were income in the taxpayer's hands despite the taxpayer's claim that the advances were 'loans' and were described as such.
NSW payroll tax: grouped assessments revoked In Tasty Chicks Pty Ltd & Ors v Chief Commissioner of State Revenue, the NSW Supreme Court held that an administration services company and a transport company should not be grouped with a chicken supplier partnership for payroll tax purposes. NT land rich provisions: High Court finds 'lease' excludes option to renew In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue, the High Court allowed the taxpayer's appeal against the decision of the NT Court of Appeal in Comr of Territory Revenue v Alcan (NT) Alumina Pty Ltd [2008] NTCA 14, and found that options to renew leases should not have been taken into account for the purposes of assessing stamp duty under the then NT 'land rich' provisions.
Congress 2009 Congress Featuring a world-class speaker line-up and a wide variety of highlight sessions at your fingertips, CPA Congress 2009 will provide you with the strategies, ideas and practical skills you need to tackle today’s challenges. Program information – Adelaide, Brisbane, Canberra,
Melbourne, Perth, Sydney Other programs Accounting standards update (IFRS) (claim up to 1.5 CPD hours) Update your knowledge of new accounting standards /
interpretations issued during the half year period, and the standards
effective for the first time at 31 December 2009. Program information - Online Business essentials on demand – SkillsNet Make your working day more efficient with SkillsNet's diverse range of courses and get instant access to learning when and where you want. Program information - Online Fringe benefits tax essentials (claim up to 25 CPD hours upon completion) Understand the elements of fringe benefits, salary packaging and employee allowances in this comprehensive workshop. Program information – Brisbane, Canberra, Melbourne,
Perth, Sydney Payroll intensive (claim up to 8 CPD hours) Cover payroll issues from employing staff and ongoing duties to ending employment. Program information – Melbourne, Sydney More training and events For information on other CPA CPD activities being
held throughout Australia please visit the training and
events section on our website and use the search facility. To register
click onto the activity you wish to attend and follow the
prompts.
Sound education in taxation CD Tax treatment of trust losses is the third program in a four part series dealing with tax treatment of losses. It's just one topic covered in the September edition of Sound education in taxation CD. Other topics highlight taxation of liquidator’s distribution, latest tax cases & tax rulings. Reserve a copy from CPA Library
'Swan's Budget rebound' (Federal Budget deficit lower than expected; company tax receipts higher) AFR [p 1], Wed 30.9.2009 'Canberra gets a surprise cash injection' (Total tax receipts in 2008-09 were $3.3 billion higher than forecast) AFR [p 14], Wed 30.9.2009 'Decimated funds claw back gains' (Latest DIY fund stats from the Tax Office show these funds have clawed back some lost ground) AFR [p 33], Wed 30.9.2009 'Relatively competitive in the world of fees' (Study shows that fees charged by Australia's largest super funds compare well globally) AFR [p 33], Wed 30.9.2009 'Franking debate puts ATO at odds with CBA hybrid' (More on the Tax Office's reported preliminary view on a Commonwealth Bank hybrid investment) AFR [p 53], Wed 30.9.2009 'Tax risk in CBA raising' (Report that Commonwealth Bank issues its latest structured product despite dispute with the Tax Office over the product) AFR [p 1], Tue 29.9.2009 'ATO to spell out details of trusts crackdown' (Report that the Tax Office is expected to provide further guidance next month on the tax treatment of unpaid present entitlements of corporate beneficiaries of trusts) AFR [p 4], Tue 29.9.2009 'Scepticism at R&D red tape claims' (Report that accountants warn that the compliance requirements of the new R&D tax concession could be high for SMEs) AFR [p 45], Tue 29.9.2009 'VIC stamp duty in confusion' (Care needed re Vic stamp duty when structuring long-term leases) AFR [p 4], Mon 28.9.2009 'D'oh! It's distribution for dummies' (Proposal that the Tax Office collect workers' super and distribute it to super funds) AFR [p 7], 26-27 September 2009 'How to save money for your old age' (Article discussing options for retirement saving) AFR [p 28], 26-27 September 2009 'Tax traps in the family home' (Article looking at tax issues concerning the family home) AFR [p 37], 26-27 September 2009 'Rental route loses credit' (Tax issues when new developments have to be rented out) AFR [p 39], 26-27 September 2009 'Work bonus for the age pension' (The work bonus can top up the pension) AFR [p 43], 26-27 September 2009 'Beware the superficial retirement solutions' (AFR Editorial commenting on calls for safe annuity-style retirement products) AFR [p 62], 26-27 September 2009 'Ruling threatens charities' (Full Federal Court rules that aid organisation is not a charity) AFR [p 3], Fri 25.9.2009 'ATO tightens offshore deals disclosure' (Report that the Tax Office has released a new international dealings schedule requiring details of cross-border transactions) AFR [p 5], Fri 25.9.2009 'Uncertainty takes toll on DIY super' (Report of decline in number of self-managed super funds being established) AFR [p 11], Fri 25.9.2009 'Treasury cuts red tape' (Government's new Standard Business Reporting regime expected to cut red tape for businesses, accountants and tax agents) AFR [p 12], Fri 25.9.2009 'Crisis and stimulating ideas' (Questions raised about the majority's decision in the Pape case) AFR [p 42], Fri 25.9.2009 'CPA, NIA in Asian links' (CPA Australia signs an MoU with Tax Academy of Singapore, while NIA and Institute of Chartered Accountants in Sri Lanka will offer mutual recognition of members) AFR [p 47], Fri 25.9.2009 'Swiss parry attack on secrecy' (Report that Swiss banker says a withholding tax on foreigners should be introduced) AFR [p 52], Fri 25.9.2009 'Disquiet down on the farm' (Criticism of Govt tax changes re claiming losses from unprofitable businesses) AFR [p 56], Fri 25.9.2009 'Business to face higher legal costs' (Release of Access to Justice taskforce report: government may consider charging companies for the public cost of lengthy 'mega-litigation') AFR [p 1], Thur 24.9.2009 'Henry sees no case for lower company tax' (Report that Treasury Secretary Ken Henry says there is no case for reducing the company tax rate) AFR [p 8], Thur 24.9.2009 'Leaders urged to dump tax breaks' (Report that the US President will call for an end to large government subsidies that encourage the use of fossil fuels) AFR [p 12], Thur 24.9.2009 'Wealthy not only users of trusts' (Letter to the editor: trust structures are not all controlled by 'wealthy' Australians) AFR [p 59], Thur 24.9.2009 'Super think tank pursues safety net for the nest egg' (Calls for a universal low fee default super fund for all workers) AUSTRALIAN [p 5], Wed 30.9.2009 'Generation vexed: wealth building tips for the young and indebted' (Comment that reduced super caps mean generation X must start saving now) AUSTRALIAN [Wealth, p 1], Wed 30.9.2009 'Simpler system would benefit one and all' (Article looking at recommendation to scrap all tax breaks for super and replace them with one government co-contribution) AUSTRALIAN [Wealth, p 5], Wed 30.9.2009 'Trustees must act responsibly' (Comment on trustees making socially responsible investment decisions despite personal views or ethics) AUSTRALIAN [Wealth, p 9], Wed 30.9.2009 'Gas giant takes tax office to court' (Report that a mining company and its partners have commenced legal action in the Federal Court re excise paid on gas and condensate) AUSTRALIAN [p 24], Thur 24.9.2009
CPA Australia seeks your input on issues it should take up on the members' behalf. If you would like to contact us please email us at tax@cpaaustralia.com.au.
 CPA Tax News is brought to you in association with Thomson Reuters 2009 CPA Australia Ltd ABN 64 008 392 452 2009 Thomson Reuters (Professional) Australia Limited ABN 058 914 668 Material in 'CPA Australia Tax News' marked with an asterisk is the copyright of CPA Australia Ltd. Members of CPA Australia may reproduce CPA Australia copyright material from 'CPA Australia Tax News' without permission provided the material is acknowledged as the copyright of CPA Australia Ltd. All other material in 'CPA Australia Tax News' is the
copyright of Thomson Reuters (Professional) Australia
Limited. |
