| Brought to you in association with Thomson Reuters | Your weekly tax update | 18 June, 2009 |
|
Preview of ATO compliance program ATO Second Commissioner, Jennie Granger, flagged what's on the ATO's radar for tax time 2009 at CPA Australia's New South Wales Public Practice Conference on 12 June. Ms Granger said the ATO will be paying particular attention to:
PSI post-implementation review: comments sought The Board of Taxation is seeking submissions for its post-implementation review into the alienation of personal services income (PSI) rules. CPA Australia intends to lodge a submission in relation to the review by Monday 27 July. Comments on any issues you believe should be raised in this review can be emailed to tax@cpaaustralia.com.au NTLG meeting CPA Australia was represented at a meeting of the National Tax Liaison Group (NTLG) on 17 June. The ATO invited members of professional bodies to forward submissions identifying contentious tax issues requiring technical clarification to its Public Rulings Steering Committee. Any issues you would like clarified in a public tax ruling or determination can be emailed to CPA Australia tax@cpaaustralia.com.au. These issues will then be sent to the committee for consideration. The other main issues discussed included:
Upcoming ATO consultations and meetings
Member enquiries or issues for these meetings should be sent to tax@cpaaustralia.com.au
ATO helps small business re tax debts The ATO has announced measures to help small business entities that are struggling to manage their tax debts in the current economic climate. The ATO is offering 12-month GIC-free payment arrangements (until 30 June 2010) and deferring for up to two months the payment date for activity statements. The Commissioner of Taxation said businesses need to contact the ATO as early as possible on 13 11 42 to discuss their circumstances so it can negotiate a sustainable interest-free payment arrangement. Tax agent lodgment deferral requests for income tax returns The ATO has warned tax agents that it considers as late lodgment deferral requests submitted after 5 June 2009 for 2007 – 08 income tax returns. This applies to all entities with a due date of 5 June or earlier. Additional time to lodge these returns can be requested, but the ATO says agents must include supporting reasons explaining the circumstances impeding lodgment and why the request was not lodged on time. Power to assess under treaties: Commissioner of Taxation The Commissioner of Taxation has recently commented on the issue of whether double tax treaty articles can be relied on as a separate source of assessing power independently of Div 13 of the ITAA 1936. Mr D'Ascenzo said the ATO has long held the view that the treaties do provide a separate power to assess. However, he said this view has been questioned in some court decisions. Mr D'Ascenzo said the ATO has raised this issue with Treasury with a view to considering whether a law change is needed to remove any doubts about the intended policy or the current operation of the law. FBT and salary sacrificed donations: ATO administrative treatment The ATO has released details of its administrative treatment regarding the Australian Government's Budget announcement that it will amend the fringe benefit tax (FBT) law to ensure that donations to DGRs made under salary sacrifice arrangements do not result in an employer incurring an FBT liability from the 2008 – 09 FBT year. The ATO says that if a taxpayer lodges a return in accordance with the existing law, but the proposed legislation is subsequently enacted, then the taxpayer should seek an amendment to adjust the FBT liability reported in the return as appropriate. Forward tax work program updated The Australian Government has released its updated forward tax work program outlining the consultation process for announced tax measures and highlighting remaining measures to be introduced in the 2009 winter Parliamentary sittings. Examples of important projects detailed on the forward work program include:
Australia – Jersey tax information exchange agreement signed Treasury has advised that the Australian and Jersey Governments have signed an agreement for the exchange of information with respect to taxes. The agreement provides for exchange of information on request in both criminal and civil tax matters. In addition, Australia and Jersey have also signed an agreement for the allocation of taxing rights with respect to certain individuals and to establish a mutual agreement procedure in respect of transfer pricing adjustments. Tax evasion syndicate: AFP search warrants executed The Australian Federal Police (AFP) recently advised that it executed search warrants across Melbourne in connection with an alleged $38 million tax evasion syndicate. Search warrants were executed on eight premises and four vehicles with the assistance of the ATO. AFP national manager economic and special operations, Mandy Newton, said the syndicate under investigation has allegedly concealed its income through the falsification of business records. ATO guides on business investment tax break The ATO has released updated information on the small business and general business tax break: ATO tax time updates The ATO has released the following tax time information:
ATO website updates From the ATO website:
GIC and SIC rates for July to Sept 2009 The ATO has advised that the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) rates for the first quarter of the 2009 - 10 financial year (1 July 2009 - 30 September 2009) are as follows:
Carbon pollution scheme Bills: Senate report made The Senate Standing Committee on Economics has handed down its report into the package of 11 Bills that propose to implement the Government's carbon pollution reduction scheme. The Government Senators on the committee recommended the Bills be passed. However, the Coalition Senators issued a dissenting report. The Coalition believes it would be premature to lock Australia into an Emissions Trading Scheme (ETS) that is out of step with the rest of the world and it therefore proposes to move in the Parliament to defer a final vote on the Government's proposed ETS until after the Copenhagen meeting on climate change in December 2009. Medicare Levy and Surcharge Bill awaits Assent The Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2009 has now passed all stages without amendment and awaits Royal Assent. The Bill increases the Medicare levy low-income thresholds for individuals and families for 2008 – 09 and later income years, as announced in the 2009 Federal Budget. It also increases the Medicare levy surcharge low-income threshold to $17,794 for 2008 – 09 and later income years (up from $17,309 for 2007 – 08).
SMSFs compliance issues: ATO In a recent speech, Ian Read, ATO Assistant Deputy Commissioner, outlined the ATO's approach to various compliance issues for self-managed superannuation funds (SMSFs). Issues discussed by Mr Read included: new SMSF registrations; specific advice for SMSFs; in-house assets; SMSF residency test; auditor contravention reports; ATO audit tool; auditor independence; outstanding lodgments; and illegal early release schemes. Specific ATO advice for SMSFs The ATO has announced that trustees who are concerned about the particular circumstances of their SMSF can now get non-binding written advice about how the SIS Act applies to their situation. ATO Assistant Deputy Commissioner, Ian Read, said ATO advice may be given to a trustee in relation to their SMSF's unique circumstances similar to a private ruling. While this ATO advice will not be legally binding and will not have the same review rights as a private tax ruling, Mr Read said it will provide guidance, a good level of practical certainty and will be taken into account in the event of a dispute. ATO website updates on superannuation From the ATO Website:
The following rulings were released by the ATO on 17 June:
Status of charitable fund: Commissioner's appeal allowed In FCT v Bargwanna, the Federal Court set aside a decision of the Administrative Appeals Tribunal (AAT) in which the AAT concluded that a fund was entitled to be endorsed as exempt from income tax under Subdiv 50-B of the ITAA 1997. Application for further information re Pt IVA case declined In Futuris Corporation Ltd v FCT, the Federal Court confirmed that a taxpayer was not entitled to further information regarding how the Commissioner arrived at his conclusion that the taxpayer allegedly had obtained a tax benefit in connection with a 'scheme' to which Pt IVA of the ITAA 1936 applied. Non-resident liable for tax on salary from Australia In AAT Case [2009] AATA 428, Re Campisi and FCT, the AAT (sitting as the Small Taxation Claims Tribunal) held that a resident and citizen of Canada who was in Australia on a five-month working holiday in the 2008 income year was liable for tax on salary and wages he earned in Australia during that period. Suspension of tax agent's registration set aside In Cassaniti v Tax Agents' Board of NSW, the Federal Court held a person was entitled to an injunctive relief restraining the Board from conveying to third parties the content, result or outcome of any of its investigations whilst criminal proceedings against him remain on foot. The court also found that the Board was restrained from determining whether to suspend the registration of his cousin and the company through which he ran his tax agents' business while ever the criminal proceedings remained on foot. It also found that the company was entitled to have an existing notice of suspension of its registration set aside because it contained on its face jurisdictional error. Director's penalty notice given when posted In DCT v Soong, the New South Wales Supreme Court held that a director's penalty notice for just over $1 million for failure of companies to forward to the ATO withheld PAYG deductions was validly served. It considered that the Deputy Commissioner gave the defendant the notices required to be served upon him on the date on which the notices were posted. Appeals update The taxpayer has appealed to the Full Federal Court against the decision of Stone J in FCT v Lean [2009] FCA 490. The Federal Court had allowed the Commissioner's appeal and held that the taxpayer was not entitled to a deduction for misappropriated moneys that had been included in his assessable income as a capital gain. The taxpayers have appealed to the Full Federal Court from the decision of Jessup J in De Simone v FCT [2009] FCA 446. The Federal Court had confirmed that the taxpayers, who were partners in a partnership that had invested in a theatrical production, were not entitled to a deduction for their share of money borrowed by the partnership under a 'tax effective investment scheme' type arrangement to invest in the production.
New South Wales Budget 2009 – 10 The New South Wales Budget 2009 - 10 was delivered by New South Wales Treasurer on 16 June 2009. The Budget did not introduce any new taxes. Revenue measures announced include:
The State Revenue Legislation Amendment Bill 2009 (New South Wales) has been introduced into the New South Wales Legislative Assembly to implement the revenue measures announced in the Budget. New South Wales payroll tax threshold amount commencing 1 July 2009 The New South Wales Commissioner of State Revenue has published a notice declaring that the payroll tax threshold amount for the financial year commencing on 1 July 2009 is $638,000. Queenslandd Budget 2009 – 10 The Queensland Budget 2009 – 10 was handed down by the Qld Treasurer on 16 June 2009. Revenue measures announced include:
The Fuel Subsidy Repeal and Revenue and Other Legislation Amendment Bill 2009 (Queensland) has been introduced into the Queensland Legislative Assembly to implement the Budget measures announced. The Bill also proposes to:
South Australia stamp duty: deed of retirement not subject to duty In Cyril Henschke Pty Ltd & Ors v Comr of State Taxation, the Full Court of the South Australia Supreme Court allowed the taxpayer's appeal and held that a deed of retirement did not transfer a retiring partner's interest in a partnership to the continuing partners. Rather, the Full Court found the retiring partner's interest in the partnership was an equitable chose in action, and that the deed effected a transaction by which that equitable chose in action was converted into an entitlement to payment of a specific amount. Tasmanian Budget 2009 – 10 The Tasmanian Budget 2009 – 10 was handed down by the Tasmanian Treasurer on 11 June 2009. Mr Aird said the 'Budget includes no new taxes and no increases in any tax'. Revenue measures announced include:
e-Learning sale Invest in new knowledge with CPA Australia's end of financial year sale on most CDs, learning manuals and online program. Tax and Excel programs Public accounting fundamentals (claim up to 51.5 CPD hours upon completion) This essential induction tool will prepare you for working in a public practice. Combining a fully revised set of learning manuals and a half-day workshop, you will progressively be taken through all the basics for day-to-day completion of tax accounts. Save 25 per cent on this program when ordered by Tuesday 30 June. Program information — learning manual Financial management using Microsoft® Excel (claim up to 7 CPD hours per topic) Save time and effort by learning to use Excel's features more effectively. Increase the accuracy of your forecasting, budgeting and strategic planning in this series of six workshops. All workshops are conducted in PC training facilities and are presented by experienced Excel trainers. The combination of expert face-to-face training and interactive PC-based exercises makes it easier for you to learn the practical skills, and implement them immediately in your workplace. Program information — Adelaide, Brisbane, Melbourne, Perth, Sydney 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.
Taxation of superannuation contributions DVD This Super basics DVD covers the key elements of the contribution tax regime. Reserve a copy from CPA Library.
'Rees banks on housing recovery' (2009 NSW Budget - stamp duty cuts for new home buyers; deficit until 2011-12) AFR [p 1], Wed 17.6.2009 'Queensland goes deeper into debt to protect jobs' (2009 Qld Budget - big infrastructure program; land tax and payroll tax changes) AFR [p 1], Wed 17.6.2009 'Tax change will drive cash pay bias' (Claim that the Govt's tax changes re employee share schemes will drive a cash pay bias in remuneration) AFR [p 4], Wed 17.6.2009 'Federal cash in lieu of tax take' (2009 Qld Budget extends tax on expensive properties) AFR [p 13], Wed 17.6.2009 'Stamp duty relief welcomed' (Temporary halving of stamp duty on new houses in NSW welcomed) AFR [p 15], Wed 17.6.2009 'Treat capital gains carefully' (Strategies to deal with tax at year end) AFR [p 32], Wed 17.6.2009 'Groups fear new duty model "disaster"' (Report that property and investor lobby groups have concerns about a proposed new landholder duty model in NSW) AFR [p 57], Wed 17.6.2009 'Share scheme changes should be scrapped' (Opinion that if new tax rules don't work, there will be no employee share schemes to tax) AFR [p 63], Wed 17.6.2009 'ATO wants law changes to tax treaties' (Report that the Tax Office has asked the Government to consider legislative changes to strengthen its ability to tax multinationals) AFR [p 3], Tue 16.6.2009 'Frozen schemes will stay on ice' (Claim that many companies will not re-activate their employee share schemes) AFR [p 13], Tue 16.6.2009 'Start-ups stress need for share plans' (Claim that abolishing employee share schemes would be a very retrograde step for Australia) AFR [p 55], Tue 16.6.2009 'Testing time for new assets' (The temporary investment allowance and new businesses) AFR [p 56], Tue 16.6.2009 'BCA backs debt reduction in tax review' (Report that big business has urged the Government to back tax reforms to boost savings) AFR [p 1], Mon 15.6.2009 'BCA warns taxes are just too taxing' (BCA claims reform of state taxation is far from complete) AFR [p 6], Mon 15.6.2009 'No big cuts to NSW stamp duty' (Report that the NSW Government is not considering cutting stamp duty on new homes) AFR [p 9], Mon 15.6.2009 'False starts in home stakes' (WA Office of State Revenue warns about false claims for First Home Owners Grant) AFR [p 4], 13-14 June 2009 'ATO on top of the game, set and match' (Report that the Tax Office is targeting executives, investors and anyone worth more than $5 million this tax time) AFR [p 6], 13-14 June 2009 'Unions back share changes' (Report that unions have backed the Government's revised tax changes concerning employee share schemes) AFR [p 7], 13-14 June 2009 'The end of executive perks' (Government launches tax assaults on perks, benefits and performance pay) AFR [p 19], 13-14 June 2009 'Rich taxed to keep small business alive' (Claim that the Tax Office is trying to help one sector while punishing another) AFR [p 21], 13-14 June 2009 'Contributions and tax a matter of timing' (Making late tax-deductible contributions to self-managed super funds) AFR [p 43], 13-14 June 2009 'Executives targeted in ATO blitz' (Report that the Tax Office will target executives and directors this tax time) AFR [p 1], Fri 12.6.2009 'Capital gains a potential temptation' (The Tax Office is looking closely at capital gains made in selling shares and property) AFR [p 6], Fri 12.6.2009 'More work urged on employee shares draft' (Report that business wants further changes to the Govt's employee share scheme tax measures) AFR [p 7], Fri 12.6.2009 'It's a raid: ATO, police seize records, computers' (Report of a raid by the AFP and the Tax Office as part of a tax evasion investigation) AFR [p 8], Fri 12.6.2009 'Wage freeze as $760m savings targeted' (2009 Tasmanian Budget introduces payroll tax rebate for businesses that create jobs) AFR [p 13], Fri 12.6.2009 'Tough call on how US will pay the piper' (US Senate Budget Committee Chairman floats idea of a VAT in the US) AFR [p 19], Fri 12.6.2009 'Tax reprieve for small business' (The Tax Office is offering small business a 12-month GIC-free repayments and deferral of payment for activity statements) AFR [p 1], Thur 11.6.2009 'Uncertainty keeps share plans on ice' (Claim that many share plans have not been reactivated because of ongoing uncertainty about the Government's position) AFR [p 3], Thur 11.6.2009 'Exploration fall spurs call for tax carrots' (Fall in mineral exploration prompts calls for tax incentives for the mining sector) AFR [p 4], Thur 11.6.2009 'A good start but some want more' (Reaction from small businesses to the Tax Office's announced concessions re payments, etc) AFR [p 8], Thur 11.6.2009 'ATO's show of debt goodwill wins praise' (Industry representatives and accounting experts welcome Tax Office's moves to help small businesses) AFR [p 9], Thur 11.6.2009 'Business, expats call for tax exemptions to stay' (Pressure on Govt to reconsider the Budget's tax changes re foreign income earned by expats) AFR [p 11], Thur 11.6.2009 'Share schemes reopen, but tax changes decried' (Report that listed tech companies are reopening employee share schemes but remain unconvinced re the tax changes) AFR [p 44], Thur 11.6.2009 'MIS tax breaks don't stack up' (AFR Editorial: the MIS tax concessions should be consigned to the compost bin by the Henry tax system review) AFR [p 62], Thur 11.6.2009 'Stimulus for new home building' (Report of NSW Budget announcement to cut by 50 per cent stamp duty on newly built homes) AUSTRALIAN [p 9], Wed 17.6.2009 'Grants align for dream construction time' (Report of NSW Budget announcement to extend the NSW new home supplement for another year) AUSTRALIAN [p 9], Wed 17.6.2009 'Nine years before surplus returns' (Report of Qld Budget announcements - stamp duty concessions for first home buyers purchasing vacant land) AUSTRALIAN [p 9], Wed 17.6.2009 'Stamping down on miner duty' (Report that the WA Government may consider law changes to ensure the State does not miss out on stamp duty re Rio Tinto and BHP Billiton's production joint venture) AUSTRALIAN [p 22], Wed 17.6.2009 'Buy through a fund and add significant value' (Article on super gearing arrangements with a view to holding property) AUSTRALIAN [Wealth, p 4], Wed 17.6.2009 'Fraser pleads for tax overhaul to ease pain' (Report that the Qld Treasurer has suggested the possibility of states handing back GST revenue in exchange for a share in income tax) AUSTRALIAN [p 8], Tue 16.6.2009 'A capital idea to cut company tax' (Comment on suggestion to increase GST rate in exchange for halving the company tax rate) AUSTRALIAN [p 12], Tue 16.6.2009 'Never say never: bosses urge GST hike' (Report that businesses have called for an increase in the GST rate and a decrease on the tax on capital gains and interest income) AUSTRALIAN [p 1], Mon 15.6.2009 'ATO on hunt for bosses' dodges' (Report that the Tax Office is focusing on high-net wealth individuals - focus areas include employee share schemes, international financial transactions, capital gains, tax havens) AUSTRALIAN [p 5], Fri 12.6.2009 '$3.9bn splurge to fight off recession' (Report of Tasmania's State Budget - no new taxes or levies, but $3.9bn infrastructure spend) AUSTRALIAN [p 6], Fri 12.6.2009 'Tax relief plan for firms taking on workers' (Report that Tasmanian businesses taking on new employees will be offered an uncapped payroll tax rebate) AUSTRALIAN [p 6], Fri 12.6.2009 'Business getting a 12-month tax break' (The Tax Office is offering 12-month GIC-free payment arrangements for small businesses) AUSTRALIAN [p 4], Thur 11.6.2009 'Lawyers may pay for court delays' (Report of new legislation aimed at making sure disputes are resolved quickly, cheaply and efficiently) AUSTRALIAN [p 5], Thur 11.6.2009
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
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. |
