| Brought to you in association with Thomson Reuters | Your weekly tax update | 8 October, 2009 |
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Simplifying GST rules: draft legislation released The government released for public comment the first set of draft GST administration legislation aimed at making it simpler for business owners to carry out their GST obligations. The draft exposure Bill addresses concerns relating to the administration of GST and implements recommendations made to the government by the Board of Taxation. Main measures include:
Comments to Treasury are due by Tuesday 27 October. The government expects further tranches of exposure drafts will be released for consultation in the coming months. Comments from members on this simplification project would be welcomed for inclusion in a proposed CPA Australia submission — these can be emailed to tax@cpaustralia.com.au by Tuesday 20 October. Tax on personal capital income: Dr Ken Henry In a recent speech, Dr Ken Henry, chairman of the Henry tax review, gave his views on the taxation of personal capital income, or income from 'saving'. Dr Henry said the system for taxing personal capital income has evolved into something that is far from the originally intended ideal. In particular, he noted that different forms of income from savings attract widely different effective tax rates. He questioned whether this lack of more neutral treatment is appropriate given Australia's looming economic, social and environmental challenges. He added that although the tax system is ripe for reform, there is a 'complex set of tradeoffs in respect of the choice of the savings base, the choice of rate and the forms in which such a tax might be levied'. Dr Henry said over the next couple of months, the review panel will refine its judgments on these issues. Executive remuneration: Productivity Commission The Productivity Commission has released its draft report on executive remuneration proposing a package of changes to the Corporations Act 2001 and ASX listing rules. The commission also recommended changes relating to timing of the taxation of equity-based payments. Importantly, the commission proposes strengthening shareholders' 'say on pay' by requiring boards to face re-election if shareholders' concerns on consecutive remuneration reports are ignored ('two strikes rule'). Comments on the issues raised in this report would be welcomed by Wednesday 21 October 2009 as CPA Australia may lodge a submission with the commission. Australia signs another new tax transparency treaty Assistant Treasurer, Senator Nick Sherry, has announced that Australia and Guernsey, a significant financial centre, have today signed a new tax information exchange agreement. Reaching tax information exchange agreements with offshore financial centres is an important part of the Australian Government's efforts to prevent tax avoidance and evasion. Earlier this week, while attending the International Monetary Fund and World Bank annual meetings, the Assistant Treasurer addressed the Taskforce on Financial Integrity on the issue of tax evasion and revenue policy, where Australia's commitment to tax integrity was highlighted. Further details on this topic are available from the Treasury website Upcoming consultations and meetings
Member enquiries or issues for these meetings can
be sent to tax@cpaaustralia.com.au
TOFA and PAYG instalments: ATO The ATO has released details of its administrative treatment regarding the government's proposed amendments to restore the position in relation to the PAYG instalments system as it was prior to TOFA 3 and 4. The ATO said it will accept BASs as lodged by affected taxpayers. Once the proposed amendments become law, the ATO said affected taxpayers should review the actions they have taken in respect of instalment quarters that started on or after 1 July and ended before enactment of the proposed law. FBT and salary sacrificing donations: ATO The ATO has released details of its administrative treatment regarding the amendments to the FBT law to ensure that donations to deductible gift recipients made under salary sacrifice arrangements do not result in an employer incurring an FBT liability from the 2008 – 09 FBT year. The ATO said the amendments, introduced in Tax Laws Amendment (2009 Measures No 4) Act 2009 received Royal Assent on 18 September. The ATO said that, given the legislation applies retrospectively, if a taxpayer lodges a return in accordance with the previous law, the taxpayer should seek an amendment to adjust the FBT liability reported in their return as appropriate. It said interest on an overpayment will be payable on any refund received. One new ATO ID The ATO has released ATO ID 2009/108 dealing with the 'disability superannuation benefit' definition in s 995-1(1) of the ITAA 1997 and the medical certification requirement at para (b). ATO website updates From the ATO website:
ATO website updates on superannuation From the ATO website:
The following rulings were released by the ATO on 7 October:
Taxpayer fails in appeal from AAT decision re GST liabilities In Butler v FCT, the Federal Court dismissed a taxpayer's application to appeal against the AAT's decision in AAT Case [2009] AATA 283, Re Butler and FCT. At first instance, the tribunal found the taxpayer had failed to discharge the burden of proof that an increase to his GST liability arising from a GST audit was excessive. No grounds to set aside bankruptcy notice In Ngaropo v DCT, the Federal Magistrates Court denied a taxpayer's attempt to have set aside a bankruptcy notice for a debt of over $147,000 that arose from the denial of deductions for investment in a managed investment scheme involving the plantation of trees. High Court special leave applications decided The High Court has refused the taxpayer special leave to appeal from the decision of the Full Federal Court in FCT v Star City Pty Limited [2009] FCAFC 19. The full court decision, which now stands, had unanimously allowed the Commissioner of Taxation's appeal and held that the taxpayer was not entitled to a deduction for the prepayment of rent of $120 million to the NSW State Government under a contractual arrangement to acquire a casino licence and to operate the casino on crown land. The High Court has granted the taxpayer special leave to appeal from the decision of the Full Federal Court in Hogan v Australian Crime Commission [2009] FCAFC 71. The full court decision had dismissed the taxpayer's appeal against a Federal Court decision that lifted all previous orders restricting or preventing the publication of evidence and other material relating to the Wickenby investigation of the taxpayer's affairs.
NSW: market rate of interest payable on tax defaults The New South Wales Office of State Revenue (OSR) has announced that the market rate of interest payable on any tax default under the Taxation Administration Act 1996 (NSW) will be 3.3 per cent from 1 October. Further information on interest is available on the OSR website. Queensland OSR compliance program 2009 – 10 The Queensland Office of State Revenue (OSR) has released details of its compliance program for 2009 – 10. The OSR said the roll-out of its new revenue management system has enabled it to better identify instances of non-compliance, improve case selection and audit processes. Focus areas include business and their payroll tax obligations, trusts and partnership transactions, and homebuyers' duty concessions.
IFRS and tax 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. Program information – Webinar Presented by Kaplan, these regular tax updates keep you up-to-speed with the ever-changing tax legislation. Program information - Adelaide, Brisbane, Canberra,
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Defining and locating the asset pool Asset definition and delineation is one of the first and most important steps a practitioner must undertake when developing an estate plan. This is a topic covered in the Principles of estate planning DVD. Now available to reserve from CPA Library
'Making a binding death benefit' (Who can inherit a super death benefit?) AFR [p 33], Wed 7.10.2009 'Small business next in the firing line' (Claim that SMEs will dominate the second wave of business failures) AFR [p 41], Tue 6.10.2009 'Post-crisis, Swan says tax reform takes centre stage' (Report that the Treasurer puts the Henry tax review at the centre of the Government's reform program) AFR [p 3], 3-4 October 2009 'Tax man to target DIY super' (Tax Office will target misuse of self-managed super funds) AFR [p 5], 3-4 October 2009 'High Court to hear Hogan tax appeal' (The High Court has granted Paul Hogan leave to appeal against a decision to publicly release documents) AFR [p 6], 3-4 October 2009 'Tax on savings provokes inflation debate' (Comment on changing the tax system to encourage saving) AFR [p 7], 3-4 October 2009 'Salary packages for a new era' (There are still ways to package salaries and obtain tax savings) AFR [p 37], 3-4 October 2009 'Crackdown on employee tax benefits' (A draft ruling on salary sacrifice aims to stamp out tax avoidance schemes) AFR [p 38], 3-4 October 2009 'How to drive your pay packet further' (Claim that salary packaging is alive and well) AFR [p 39], 3-4 October 2009 'How to retire and avoid a pension tax' (Some people may be able to get super benefits tax-free before age 60) AFR [p 43], 3-4 October 2009 'ATO ramps up audits of wealthy' (Report that the Tax Office is increasing its audit activity on wealthy taxpayers, including sending out an 11-page questionnaire) AFR [p 1], Fri 2.10.2009 'ACC wins on spousal ruling' (Federal Court holds that spousal privilege does not apply to examinations by the Australian Crime Commission) AFR [p 11], Fri 2.10.2009 'Henry's sights on saving taxes' (Ken Henry says the taxation of savings must be overhauled) AFR [p 15], Fri 2.10.2009 'Murdoch's news beats the taxman' (AAT allows $1.5 billion capital loss for newspaper group restructure) AFR [p 3], Thur 1.10.2009 'RIO wins $47m tax challenge' (Alcan Alumina wins High Court case on $47 million NT stamp duty bill) AFR [p 5], Thur 1.10.2009 'Defer reckoning, PC says' (Productivity Commission urges that large tax bills from company share packages imposed on executives when they resign should be deferred) AFR [p 11], Thur 1.10.2009 'Bankers face tax probes' (Report that the UK's financial regulator is demanding information from banks on how they structure themselves to minimise tax) AFR [p 13], Thur 1.10.2009 'Not all trust users are tax avoiders' (Letter to the Editor re the Tax Office's proposed action on trusts and unpaid present entitlements) AFR [p 59], Thur 1.10.2009 'Report a good basis for action' (Comment on Productivity Commission draft report on executive remuneration, noting the importance of the Henry tax review) AFR [p 63], Thur 1.10.2009 'End tax and welfare churn' (Calls to remove middle class welfare in exchange for income tax cuts) AUSTRALIAN [p 6], Wed 7.10.2009 'The tax review is all about adding value' (Opinion the recommendations to be contained in the Henry Tax Review will shape the structure of the economy) AUSTRALIAN [p 15], Tue 6.10.2009 'Reduced work hours cost the taxman $2bn' (Report the reduction in employees' work hours for the 2008-09 income year has resulted in tax receipts falling by $2 billion for that year) AUSTRALIAN [p 1], 3-4 October 2009 'Win for Hogan on tax secrets' (The High Court has granted a taxpayer special leave to appeal against the Full Federal Court's decision allowing the public release of documents in relation to an alleged tax fraud investigation) AUSTRALIAN [p 32], 3-4 October 2009 'Savers can expect tax breaks' (According to Dr Ken Henry, taxpayers need to become more self-reliant on savings - contains views on issues regarding how capital income is taxed) AUSTRALIAN [p 8], Fri 2.10.2009 'RIO wins high court ruling in $47m land tax dispute' (Alcan Alumina wins High Court dispute regarding NT stamp duty) AUSTRALIAN [p 24], Thur 1.10.2009
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
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