| Brought to you in association with Thomson Reuters | Your weekly tax update | 16 July, 2009 |
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GST and representatives of incapacitated entities: draft Bill released The Australian Government has released for consultation a draft Bill to restore the stated government's intention of the GST law that a representative of an incapacitated entity will be liable for GST on transactions within the scope of its appointment. Assistant Treasurer, Senator Nick Sherry, said the amendments contained in the draft Bill became necessary after the Federal Court's decision in DCT v PM Developments Pty Ltd (2008) 70 ATR 741. Senator Sherry said that, if left to stand, the Federal Court decision would mean that the GST liability would instead fall to the insolvent company, greatly reducing the likelihood of payment. Comments from members for inclusion in a possible submission on the draft Bill should be sent to tax@cpaaustralia.com.au by Monday 27 July. 2009 tax checklists Access the latest checklists to help with the preparation of tax returns in 2009. Tax and sustainable arts sector Recent Griffith University reports relating to the tax and sustainable arts sector cover the following topics: current Australian tax treatment of the sector and relevant international comparisons, and role of tax law in contributing to a sustainable arts industry including potential reforms, and other practical strategies. Meeting with assistant Treasurer CPA Australia CEO, Geoff Rankin, and general manager of policy and research, Paul Drum, met with assistant Treasurer, Senator Nick Sherry, on 7 July in Melbourne. Various tax issues were discussed including the consultation process, the Henry Review Tax Review, current Board of Taxation reviews and recent CPA Australia submissions on employee share arrangements and agribusiness schemes. Board of Taxation's post-implementation review CPA Australia is preparing a submission to the Board of Taxation in respect to its post-implementation review of the provisions relating to the alienation of personal services income. The purpose of the post-implementation review is to assess how effective the legislation has been in delivering its policy intent rather than canvassing the merits of the policy involved. The board's terms of reference are to examine the operation of the rules to determine whether they are achieving their desired policy outcome; to identify any problems with the operation of the rules; and if appropriate, to consider options for improving the rules. Comments for inclusion in our proposed submission should be sent to tax@cpaaustralia.com.au by Monday 20 July. ATO Disaster Response Workgroup Representatives from CPA Australia, along with representatives from other accounting and tax professional bodies and Centrelink, attended an ATO workshop on 8 July to discuss the ATO's future disaster response plan. The objective of the workshop was to share information and discuss how organisations can effectively work together in the event of any future disasters and to conduct a post natural disaster audit to identify which measures worked well and which did not. Recent submission CPA Australia lodged a submission to the Australian Treasury on its recent discussion paper on a possible extension of an extra-statutory concession to the Commissioner of Taxation to facilitate the early resolution of legislative anomalies and other minor gaps in the tax laws. Upcoming ATO consultations and meetings
Member enquiries or issues for these meetings should be sent to tax@cpaaustralia.com.au
Lodgment concession for 2009 PAYG withholding payment summary annual reports PAYG withholding payment summary annual reports must generally be lodged by Wednesday 30 September. However, the ATO says lodgment of some of these reports can be deferred until the due date of the payer's 2009 income tax return. This concession does not apply to large withholders who must lodge by Friday 14 August. The ATO advises that only certain taxpayers are eligible for the concession. In late July 2009, the ATO says it will send tax agents a letter outlining the lodgment concession process for this year. The letter will include a list of their clients that have been granted the lodgment concession for 2009, and those who received the concession last year but are not currently eligible this year. It will also include a form for additional clients. If agents don't receive a letter by Friday 15 August and they have clients that are eligible for the concession, the ATO says they can request the concession by completing the lodgment concession request form (PDF – 944 KB) (and submitting it by Tuesday 15 September). Tax agents have until Tuesday 15 September to notify the ATO of any additional clients requiring the lodgment concession. If they do not do that, and their client's annual report is not lodged by Wednesday 30 September, the ATO says the concession will not be recorded and failure to lodge on time penalties may apply. Those not eligible for the concession must lodge by Wednesday 30 September. The ATO said penalties applied will only be remitted where there are extenuating circumstances. ATO IDs: 14 new The ATO has released the following IDs:
ATO website updates From the ATO website:
PAYG withholding re individuals engaged in foreign services The Taxation Administration Act 1953 — PAYG withholding — Individuals engaged in foreign service was registered to ensure the withholding from payments made to individuals employed in a foreign country or countries closely approximates the Australian income tax that will be payable on the relevant income. This instrument is necessary due to amendments to s 23AG of the ITAA 1936, effective from 1 July 2009. It commenced on 15 July 2009. More organisations granted access to Centrelink records The Privacy (Private Sector) Amendment Regulations 2009 (No 1) were registered to allow a further 27 organisations to use a Centrelink identifier to access records, in order to determine whether a person is entitled to receive a service or assistance, or is entitled to early release of superannuation on the grounds of hardship.
Simple superannuation fund advice to members: FSR exemption The Australian Government has welcomed the release of an ASIC Class Order and Regulatory Guide to enable super fund trustees to engage more with their members and help them understand their superannuation. ASIC Class Order [CO 09/210] provides superannuation fund trustees (and their authorised representatives) with relief from s 945A of the Corporations Act 2001 when providing personal advice to fund members about their existing super fund on certain limited topics. The Class Order was issued in conjunction with ASIC Regulatory Guide RG 200 (PDF – 252 KB) Advice to super fund members). Class Order [CO 09/210] commenced on 8 July 2009. Temporary residents' super: relief from providing exit statements ASIC Class Order [CO 09/437] was registered to provide conditional relief to super fund trustees from providing notices and exit statements to former temporary residents whose benefits are required to be paid to the ATO. The Australian Government said this relief responds to industry concerns that a fund trustee will generally not be aware of which of its members have been temporary residents until advised by the ATO and will generally not have overseas addresses for temporary resident members. Superannuation notional taxed contributions The Income Tax Assessment Amendment Regulations 2009 (No 3) have been made to support the 2009 Federal Budget measure to extend the grandfathering arrangements for certain members of superannuation defined benefit funds on 12 May 2009 following the reduction in the concessional contributions caps. The new grandfathering arrangements are modelled on those already in existence for members who had a defined benefit interest at 5 September 2006. The regulations specify that members who hold a defined benefit interest on 12 May 2009 and whose 'notional taxed contributions' exceed the reduced concessional contributions caps from 1 July 2009 have their concessional contributions for that defined benefit interest deemed as being equal to their cap, provided the conditions outlined in the regulations are met. Some of the amendments apply retrospectively from the 2007 - 08 financial year. Optional CGT loss rollover for merging complying super funds: ATO administrative treatment The ATO has released details of its administrative treatment regarding the Australian Government's announcement to provide an optional CGT rollover for capital losses arising from CGT events happening under a complying super fund's merger with an APRA-regulated super fund with at least five members. The announcement was originally made in December 2008. In April 2009, the Australia Government announced it will extend the period of application of the rollover by one year to 30 June 2011. The ATO will apply the existing law in the period between the announcement and enactment of the proposed law but will not undertake specific compliance activity to enforce the existing law during this period.
The following rulings were released by the ATO on 15 July:
Wickenby: no extension of freezing order against assets In FCT v Grimaldi (No 4), the Federal Court refused an oral application made by the Commissioner of Taxation seeking to extend freezing orders made against the assets of the relevant respondents. The application was submitted immediately after the court's decision in FCT v Grimaldi (No 3). In the earlier case, the Commissioner of Taxation also sought to extend freezing orders made against the assets of the relevant respondents. However, the court refused the Commissioner of Taxation's application. In the court's view, the Commissioner of Taxation had obtained the 'derivative benefit' of orders made by the High Court of New Zealand in relation to assets of the respondents held in New Zealand bank accounts. Extension of time granted to file appeal In Hua-Aus Pty Ltd v FCT, the Federal Court allowed a taxpayer to file a notice of appeal from a decision of the AAT in AAT Case [2008] AATA 1033, Re Hua-Aus Pty Ltd and FCT, notwithstanding the notice was to be lodged out of time. At first instance, the tribunal affirmed the Commissioner of Taxation's decision to increase the amount of taxable supplies and reduced the amount of creditable acquisitions. The increase to the taxable supplies arose from unexplained deposits made to the taxpayer and its related entities. Taxpayer liable for tax assessed In Barkworth Olives Management Ltd v DCT (PDF – 43 KB), the Queensland Court of Appeal dismissed an application by a taxpayer in which the taxpayer sought to exonerate itself from a liability to pay tax imposed. At the time of hearing, the Commissioner of Taxation had not decided on the objection. The court said the taxpayer's assertion that it did not receive any monies in a representative capacity was 'no answer to its liability to pay the tax assessed'. Rather, that assertion could only be recognised in an objection process provided for by the tax legislation, the court said.
Victoria stamp duty: penalties moratorium for recent changes The Victorian State Revenue Office (SRO) has issued Duties Act Bulletin D2/09 which sets out a penalties moratorium offered by the SRO in respect of the changes to the Duties Act 2000 (Vic) made by the Duties Amendment Act 2009 (Vic), which received Royal Assent on 7 July. The changes ensure that leases are not used as a mechanism for avoiding duty and clarifies when duty is payable in relation to changes in beneficial ownership. The SRO said certain taxpayers may find themselves in a tax default position as a result of the amendments applying to arrangements that have occurred on and after 21 November 2008. To enable these taxpayers sufficient time to remedy their tax defaults without the imposition of any penalty tax or interest, a penalties moratorium as set out in the bulletin is offered.
Taxation and reporting programs An introduction to recording and reporting (claim up to 24 CPD hours upon completion) Increase your own or your team's contribution to financial discussion as you build a working knowledge of the fundamental recording and reporting principles revealed in this program. Program information — CD and online Salary packaging intensive (claim up to 8 CPD hours) Attract and retain quality employees with effective methods of salary packaging and understand how to reduce your taxable income. Program information — Melbourne, Sydney Standard business reporting (claim 1 CPD hour upon completion) Examine standard business reporting (SBR) with Paul Madden, SBR program director, Treasury. Program information — webinar Superannuation Half yearly super summary (claim 1 CPD hour upon completion) Download the latest instalment of super news with this on-demand audio commentary delivered by Heidi Rodgers and Debbie Ghuliani from Kaplan. Covering the May Federal Budget outcomes, tax law amendments, and recent rulings in one concise hour, you'll also receive the transcript as an ongoing reference. Program information — audio download More training and events For information on other CPA CPD activities being held throughout Australia visit the Training & Events section of the CPA Australia website and use the search facility. To register, click on the activity you wish to attend and follow the prompts.
Fringe benefits DVD Fringe benefits: specific types of fringe benefits DVD focuses on some of the more common benefits provided to employees other than car and entertainment fringe benefits. It examines expense payments, property, residual fringe benefits and living away from home allowances. Reserve a copy from CPA Library.
'Taxpayer data at risk: Audit' (Article on the Tax Office and management of private taxpayers' information) AFR [p 3], Wed 15.7.2009 'Call to give tax office more flexibility' (Report that practitioners support the proposal to give the Commissioner discretionary powers) AFR [p 12], Wed 15.7.2009 'Farmers press for relief on perks' (Report that farmers and tax advisers are pressing the Government to soften Budget measures re shareholders who use private company assets) AFR [p 12], Wed 15.7.2009 'CFMEU demands blitz on employers' (Report that the construction union has urged the Tax Office to target employer avoidance of super contributions) AFR [p 13], Wed 15.7.2009 'ATO eases expats' double whammy' (Report that the Tax Office has made an instrument to allow employers to vary the amount of PAYG withholding tax they withhold by taking in account how much income tax workers pay to foreign authorities) AFR [p 13], Wed 15.7.2009 'Confronting the challenge of life-changing issues' (Article on a DIY super fund in which husband and wife are members but one of which has a enduring power of attorney over the other who has a serious illness) AFR [p 32], Wed 15.7.2009 'Loss of faith dogs super' (Comment that poor returns and legislative risk are making investors question super as an investment) AFR [p 36], Wed 15.7.2009 'Super river of gold is running dry' (Comment that compulsory super cannot sustain every specialist share manager in bleak times) AFR [p 53], Wed 15.7.2009 'Brogden takes on top rule at IFSA' (Report that the new IFSA chief intends to push several super reforms eg uniform stamp duty for life insurance companies) AFR [p 54], Wed 15.7.2009 'ATO climbs the debt queue' (The Government has released draft legislation re GST and representatives of incapacitated entities) AFR [p 5], Tue 14.7.2009 'Wickenby tax case to go to trial' (Report that a taxpayer has been committed to stand trial on seven counts of dishonesty and one count of dealing with proceeds of crime re Project Wickenby case) AFR [p 7], Tue 14.7.2009 'Bookkeeping fraud on the rise' (Claims that some small business owners are discovering discrepancies as they check their books) AFR [p 45], Tue 14.7.2009 'Small business owner dedicated to the cause' (Report that a new organisation to represent SMEs known as the SME Boardroom has been launched) AFR [p 46], Tue 14.7.2009 'Embed ethics in accounting' (Calls to make the study of ethics compulsory in undergraduate accounting degrees) AFR [p 28], Mon 13.7.2009 'Simple super advice is the best way to go' (Comment that allowing super funds to provide simple advice to their members may enhance investors' confidence in super system) AFR [p 46], Mon 13.7.2009 'Super honesty is long overdue' (Opinion re allowing super funds to provide simple advice to its members) AFR [p 54], Mon 13.7.2009 'Recovery there for the taking' (Opinion that the Government must fix cumbersome tax and regulatory systems to take advantage of the commodities recovery) AFR [p 55], Mon 13.7.2009 'Taxing times for Washington's thinkers' (Opinion re US Government's approach to economic stimulus packages and tax) AFR [p 55], Mon 13.7.2009 'Cheaper advice open to super savers' (Comment that most super funds already offer super advice to their members) AFR [p 4], 11-12 July 2009 'Appointing income: tax and trusts' (Report on family trusts and that the decision on the appointment of income should be made by 30 June) AFR [p 6], 11-12 July 2009 'Whose performance is truly super' (Article on industry's response to proposed release of superannuation fund figures by APRA) AFR [p 26], 11-12 July 2009 'Grey areas need more definition' (Comment that super contributions caps are becoming more complex to deal with) AFR [p 43], 11-12 July 2009 'Don't delay to catch the pension bonus scheme' (Article on the Government's Budget announcement to end the pension bonus scheme) AFR [p 43], 11-12 July 2009 'Absentee investment with no rights, no regulation' (Opinion re managed investment schemes and regulations) AFR [p 63], 11-12 July 2009 'Super funds to compete on advice' (Financial planning industry responds to Government's decision to allow super funds to provide limited personal advice to their members) AFR [p 1], Fri 10.7.2009 'Sour grapes in GST ruling' (A Federal Court decision has ruled that de-alcoholised wine products made from grapes are not GST-free) AFR [p 3], Fri 10.7.2009 'Advisers are on the nose' (Further article on the Government's decision to allow super funds to provide limited personal advice to their members) AFR [p 13], Fri 10.7.2009 'Con artists phish with tax refund bait' (Report of fake emails claiming to offer a tax refund if respondants provide credit card details) AFR [p 48], Fri 10.7.2009 'White-collar crime is targeted' (Report that Federal law enforcement agencies have backed government moves to boost their access to taxpayer information in order to pursue white-collar crime) AFR [p 9], Thur 9.7.2009 'Industry edgy on R&D changes' (Concerns that Budget changes to the R&D tax credit will tighten eligibility) AFR [p 12], Thur 9.7.2009 'Brogden shuns politics for super new job' (Report that former NSW Liberal leader John Brogden has taken up IFSA chief executive role) AUSTRALIAN [p 21], Wed 15.7.2009 'The four pillars of retirement need strengthening' (Comment that retirement arrangements need to be sustainable) AUSTRALIAN [Wealth, p 1], Wed 15.7.2009 'Growth super stuck in doldrums' (Comment on super returns rates in the last eight years) AUSTRALIAN [Wealth, p 4], Wed 15.7.2009 'Retirement saving gets harder' (Article on new super rules - changes to super caps, income assessments for Government benefits, etc, and co-contribution matching rates) AUSTRALIAN [Wealth, p 8], Wed 15.7.2009 'Don't work if you want to access your money' (Article on accessing super while still working part time to ease into full retirement) AUSTRALIAN [Wealth, p 8], Wed 15.7.2009 'UBS, US closer to deal in tax case' (The US Government and a Swiss bank are in talks to settle an alleged tax evasion case in which the Government) AUSTRALIAN [p 621], Tue 14.7.2009 'Unions to push for 15pc super' (The Government has said that raising the rate of the compulsory superannuation contribution was being examined by the Henry tax review and the Harmer retirement review) AUSTRALIAN [p 6], Mon 13.7.2009 'Super funds given ok to advise members' (Article on the Government's decision to allow super funds to provide limited personal advice to their members) AUSTRALIAN [p 6], Fri 10.7.2009 'Taxing poser for rights of states' (Comment on High Court's decision re tax bonus payments) AUSTRALIAN [p 27], Fri 10.7.2009 'Carbon tax easy: flexible: Qantas' (Comment that intricate valuation, trading and system management required by the Government's emissions trading scheme would be borne by consumers) AUSTRALIAN [p 19], Thur 9.7.2009 'Super funds to target planners' (Calls by industry super funds for the Government to ban commissions for financial planners) AUSTRALIAN [p 22], Thur 9.7.2009
CPA Australia seeks your input on issues it should take up on the members' behalf. If you would like to contact us, email tax@cpaaustralia.com.au
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