| Brought to you in association with Thomson Reuters | Your weekly tax update | 10 September, 2009 |
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Company loss recoupment rule changes: draft legislation The government has released exposure draft legislation to implement announced changes to the company loss recoupment rules. The proposed changes aim to improve the operation of the continuity of ownership test where a company has an unfixed share structure, modify the definition of voting power, and clarify the operation of the same business test for consolidated groups. Submissions to Treasury are due by Friday 2 October. Members who have comments on the draft legislation can email us at tax@cpaaustralia.com.au by Monday 21 September for inclusion in a possible CPA Australia submission. Employee share schemes: Board of Taxation seeks comments The Board of Taxation has invited submissions for its review into elements of the taxation of employee share scheme arrangements. The board said it has been asked to examine how best to determine the market value of employee share scheme securities and whether shares and rights under an employee share scheme that are provided by start–up, research and development and speculative–type companies should be subject to separate tax deferral arrangements outside of those proposed by the government's policy statement. Submissions are due by Friday 9 October. CPA Australia would welcome any comments by members on the issues being considered by the board. These can be emailed to us at tax@cpaaustralia.com.au by Monday 28 September. Agribusiness MIS: Parliamentary committee report The Parliamentary Joint Committee on Corporations and Financial Services Inquiry into Agribusiness Managed Investment Schemes (MIS) has tabled its report in the House of Representatives making three recommendations. The committee said it was concerned about the potential for the tax deductibility for non–forestry agribusiness MIS to unfairly distort capital markets to the detriment of other rural enterprises. However, it considered that the tax deduction for non–forestry MIS under the general business deductions rule is not unreasonable where there is a clear focus on scheme profitability, rather than exploiting tax breaks. CPA Australia supports the committee's proposal to investigate the potential impact of the current tax treatment of non–forestry MIS but is concerned that any significant change to the existing rules would effectively be the death knell for many agribusiness projects in Australia. We believe that the government needs to carefully consider its next steps in this area in line with the broader policy objectives of encouraging investment, markets and jobs. It is also disappointing that the committee does not seem to have pursued our earlier recommendation on the need to improve the publicly available data on the past performance of agribusiness MIS to assist investors via ASIC or some other appropriate government body. Australia signs tax information exchange agreement with Singapore The Assistant Treasurer, Senator Nick Sherry, has signed a protocol to amend the tax treaty between Australia and Singapore, enabling the greater exchange of information on potential tax abuse. The new protocol will enter into force 30 days after both countries advise they have completed their domestic requirements. Legislation for this purpose will be introduced into parliament as soon as practicable. CPA Australia welcomes this move by the government and notes that it is in line with other tax information exchange agreements negotiated in recent times. Further details are available from the ATO website. Upcoming consultations and meetings
Member enquiries or issues for these meetings can be sent to tax@cpaaustralia.com.au
TOFA regime technical refinements announced The Assistant Treasurer, Senator Nick Sherry, has announced several amendments to the income tax law relating to the Taxation of Financial Arrangements (TOFA). Senator Sherry said one particular area where the government will be immediately introducing and seeking to pass changes in the current sittings of parliament relates to the interaction of TOFA and the PAYG instalments system. At the same time, Treasury released draft legislation and explanatory material regarding PAYG instalments and TOFA interactions for consultation. ATO IDs: four new, one withdrawn The ATO has released the following IDs:
The ATO has withdrawn ATO ID 2004/906 (Assessability of service income received by a non–resident of Australia and East Timor from the Joint Petroleum Development Area). ATO website updates From the ATO website:
Foreign exchange rates - August 2009 The ATO has released the average foreign exchange rates for August 2009. Rates for selected countries include: Europe — 0.5967; Hong Kong — 6.5580; Japan — 81.1310; NZ — 1.2550; UK — 0.5153; USA — 0.8506.
Tax Bill (No 4) passes Reps The Tax Laws Amendment (2009 Measures No 4) Bill 2009 has been passed by the House of Representatives without amendment and has moved to the Senate. The Bill contains amendments concerning: prescribed private funds; demutualisation of friendly societies; consolidation (transferred losses); R&D tax offset; minor amendments.
ATO website updates for superannuation From the ATO Website:
The following rulings were released by the ATO on 9 September:
High Court special leave applications decided The High Court has refused the applicants special leave to appeal in the following cases:
Dunn & Anor v Australian Crime Commission & Ors — in this case, the applicants have withdrawn their application for special leave to appeal from the Full Federal Court decision in Dunn & Anor v Australian Crime Commission & Ors; Strachans SA v Attorney–General & Ors [2009] FCAFC 16. In this Operation Wickenby matter, the Full Federal Court had dismissed the applicants' appeals and upheld the validity of requests to Swiss authorities for assistance. Taxpayer denied procedural fairness — inadequate translation of evidence In Eao v FCT, the Federal Court found a taxpayer was denied procedural fairness in AAT Case [2008] AATA 804, Re Eao and FCT in which the AAT rejected the taxpayer's claim that a rental property was held on trust for her mother and therefore the rent paid to her was in fact derived by her mother. The Court found that in terms of s 39 of Administrative Appeals Tribunal Act 1975, the taxpayer had been denied procedural fairness in view of the inadequate interpretation by a translator of the evidence of a key witness.
Tax and auditing Fringe benefits tax essentials (claim up to 3.5 CPD hours per workshop)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 per topic) Cover payroll issues from employing staff and ongoing duties to ending employment. Program information — Melbourne, Sydney Quarterly tax summary (claim 1 CPD hour) Download the latest quarter of tax news with this on–demand audio commentary. Covering recent key changes in legislation in one concise hour, including changes to the small business and general business tax break, you’ll also receive the transcript as an ongoing reference.Program information — Online, audio download Other programs Improving performance with innovative internal reporting systems (claim up to 12 CPD hours upon completion) Drive continuous improvement by learning to link corporate strategy to internal reporting systems with practical examples and techniques. Program information — CD–ROM and online On the pulse with Peter Switzer webinar (claim 1 CPD hour) Join Peter Switzer as he interviews some of the country's most successful business leaders and CPAs in this webinar series. Program information — webinar 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.
Lifestyle and special interest investments: CD The CD covers taxation of lifestyle activities: boats and race horses, non–forestry agricultural investment schemes, non–commercial loss provisions and non–commercial business losses. Reserve a copy of this CD from CPA Library.
'In-house advisers oppose new tax rules' (Report that in-house tax advisers of major companies want the Government to exclude them from the new tax agent regime rules) AFR [p 3], Wed 9.9.2009 'Sector "won't wilt" without aid' (Report that horticultural group says the sector does not need upfront tax breaks to survive) AFR [p 9], Wed 9.9.2009 'Fears that cheats will slip the tax net' (Concerns expressed that some large tax cheats will not have their names disclosed in the UBS tax case in the US) AFR [p 14], Wed 9.9.2009 'Pay market value or risk the penalties' (A recent AAT case highlights the importance of DIY super funds always paying market value for any private assets they own) AFR [p 31], Wed 9.9.2009 'Clarity for after-tax results' (After-tax benchmarks released for super funds) AFR [p 31], Wed 9.9.2009 'Taxman targets salary sacrifice and share schemes' (Concern that a draft tax determination might hit bonuses, salary sacrifice arrangements and employee share plans) AFR [p 3], Tue 8.9.2009 '"Ponzi-like" MIS schemes under fire' (Parliamentary inquiry releases report on agribusiness MIS - tax deductions may have affected investor decisions) AFR [p 7], Tue 8.9.2009 'Super funds are tops for growth' (Report that Australian super funds have performed well on a global scale) AFR [p 46], Tue 8.9.2009 'Carbon plan a "GST from hell"' (Opinion that a consumption-based carbon tax is superior to a cap-and-trade system) AFR [p 63], Tue 8.9.2009 'MIS tax change proposals imminent' (Claim that a Parliamentary Committee may urge the Government to remove the immediate tax breaks for agribusiness schemes) AFR [p 3], Mon 7.9.2009 'Tax doubts hamper bidders for tote Tasmania' (Report of a company sale and uncertainty re betting pool tax exemptions) AFR [p 13], Mon 7.9.2009 'Milne pleads not guilty' (Report of court proceedings re Project Wickenby investigation) AFR [p 9], 5-6 September 2009 'Tax man mines rich seam' (Report on the Tax Office's data mining abilities - warning that the Tax Office has targeted employers' super obligations) AFR [p 27], 5-6 September 2009 'Federal law takes yet another rap' (High Court finds superannuation contributions surcharge invalid against State MP) AFR [p 3], Thur 3.9.2009 'Firms seek spots on Treasury panel' (Report that Big Four accounting firms and many smaller businesses have applied to become paid members of the Government's panel of experts to advise on tax changes) AFR [p 5], Thur 3.9.2009 'Sell US holdings, says Swiss bank' (Report that a Swiss bank is telling wealthy clients to sell US assets because of concerns re possible US tax obligations) AFR [p 18], Thur 3.9.2009 'Forex tax just the antidote to hubris' (Opinion that there is no reason not to revisit the idea of a small tax on all foreign currency transactions) AFR [p 63], Thur 3.9.2009 'Sun power needs tax breaks' (According to a renewable energy industry organisation, the failure of a leading solar energy company highlights the need for tax breaks and other incentives to attract investors) AUSTRALIAN [p 7], Wed 9.9.2009 'Outsourcing super' (Article warning the Tax Office's scrutiny over non-compliance and SMSFs) AUSTRALIAN [Wealth, p 1], Wed 9.9.2009 'Control not all it's made out to be' (Article on SMSFs and outsourcing administration - covers establishing a fund, investment strategy, running a fund, and pension phase) AUSTRALIAN [Wealth, p 6], Wed 9.9.2009 'Bringing your super home' (Article on tax implications with transferring overseas super into the Australian super system) AUSTRALIAN [Wealth, p 9], Wed 9.9.2009 'Tax breaks for investment schemes face the chop' (A Parliamentary Committee has recommended that upfront tax deductions for non-forestry agricultural investment schemes be overhauled) AUSTRALIAN [p 5], Tue 8.9.2009 'On-again, off-again ATO revamp' (Report that the Tax Office's final technological refresh which contains the BAS will be delayed until December 2010) AUSTRALIAN [p 29], Tue 8.9.2009 'Swiss end fight to block tax records' (Report that a Swiss firm and a taxpayer have decided not to appeal a Full Federal Court ruling re access to certain documents) AUSTRALIAN [p 21], Fri 4.9.2009 'MPs dodge super tax' (High Court has ruled that the super surcharge could not be imposed on state MPs) AUSTRALIAN [p 1, Thur 3.9.2009 'Law to halt CGT dodging by trusts' (Government has released draft legislation for the abolition of the trust cloning exception) AUSTRALIAN [p 2], Thur 3.9.2009 'NAB hit for $309m in taxation dispute' (Report of a tax dispute re exchangeable capital units and deductibility of interest) AUSTRALIAN [p 19], Thur 3.9.2009
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.
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