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Tax Agent Services (Transitional and Consequential) Bill introduced The Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 has been introduced in the House of Representatives. It is designed to facilitate the transition from the current law regarding the registration of tax agents to the new law in the Tax Agent Services Act 2009 regarding the regulation and registration of tax agents and BAS agents. The Bill makes consequential and transitional amendments, including:
CPA Australia representatives recently met with the interim secretary of the National Board, Geoff Robinson, to discuss a range of issues that need to be considered once the board is fully established. Recent submissions CPA Australia lodged a submission to the Australian Treasury on exposure draft of Tax Laws Amendment (2009 Measures No.4) Bill 2009 on 22 June. We also lodged a submissions to the Australian Accounting Standards Board and the International Accounting Standards Board on income tax on 19 June. Upcoming ATO consultations and meetings
Member enquiries or issues for these meetings should be sent to tax@cpaaustralia.com.au
Lodgment of tax returns and statements for 2009 The Commissioner of Taxation has registered a legislative instrument which sets out who is required to lodge an annual return and the due date for lodgment in relation to income tax. The instrument applies to the financial year ended 30 June 2009 or an approved period in lieu and is effective from 24 June 2009. The Commissioner of Taxation has also registered another legislative instrument which requires liable and recipient parents under a child support assessment to lodge an annual income tax return by the due date for lodgment. It applies to the year of income ended 30 June 2009 or an approved period in lieu and is effective from 24 June 2009. Early December balancing company and super funds: electronic lodgment concession The ATO has advised tax agents that its lodgment program for 2009 - 10 introduces an electronic lodgment concession to 31 July 2009 for early December balancing substituted accounting period clients. The ATO said it has granted this concession in response to feedback from tax practitioners that tax time software availability sometimes makes it difficult to meet the lodgment due date of Wednesday 15 July. Div 7A: private company loans: 2009 - 10 benchmark interest rate The benchmark interest rate for the 2009 - 10 income year, for the purposes of the deemed dividend provisions of Div 7A of the ITAA 1936, is 5.75 per cent (down from 9.45 per cent for 2008 - 09). Operation of employee share schemes: Senate committee to examine The Senate has agreed to refer the operation of employee share schemes in Australia to its Economics References Committee for report by Monday 17 August. The committee will examine, among other things:
ATO warns on fake email offering tax discount The ATO has warned taxpayers to be wary of a fraudulent email claiming to offer a 30 per cent discount on their taxes. The email asks taxpayers to click on a link which directs them to a bogus ATO website and asks them to register by supplying their tax file number. The Commissioner of Taxation said anyone who receives the email should delete it immediately. People who have entered their TFN or personal information on the website should contact the ATO immediately on 13 28 61. ATO IDs: two new; 11 withdrawn The ATO has released the following ATO IDs:
The ATO has withdrawn the following IDs:
ATO website updates From the ATO website:
Tax Bill (No 1) awaits Assent The Tax Laws Amendment (2009 Budget Measures No 1) Bill 2009 has passed all stages without amendment and awaits Royal Assent. The Bill proposes to:
Tax Bill (No 2) awaits Assent The Tax Laws Amendment (2009 Measures No 2) Bill 2009 has passed all stages without amendment and awaits Royal Assent. The Bill contains amendments concerning: access to small business CGT concessions; tax benefits and CGT; application of the income tax law to financial claims scheme entitlements; urban water tax offset; Australian Business Register amendments; tax exemption for grants to businesses affected by Victorian bushfires; deductible gift recipients list; and fuel tax credits. Tax Bill (No 3) awaits Assent The Tax Laws Amendment (2009 Measures No 3) Bill 2009 has passed all stages without amendment and awaits Royal Assent. It makes the following amendments:
Other amendments relate to the Petroleum Resource Rent Tax Assessment Act 1987 and the deductible gift recipients list. Regulatory clean-up Bill introduced The Statute Stocktake (Regulatory and Other Laws) Bill 2009 has been introduced in the House of Representatives. It proposes amendment or repeal of almost 30 Acts to remove regulation which no longer has any function or purpose. The purpose of the Bill is to reduce costs incurred by business in understanding and complying with outdated regulatory requirements. Among the Acts to be repealed is the Income Tax (Franking Deficit) Act 1987. Acts to be amended include the GST Transition Act 1999 and the Trade Practices Act 1974 (to repeal the GST price exploitation provisions). Alcopops Bill reintroduced The Excise Tariff Amendment (2009 Measures No 1) Bill 2009 [No 2] and the Customs Tariff Amendment (2009 Measures No 1) Bill 2009 [No 2] — the so-called 'alcopops' Bills — have been reintroduced into the House of Representatives. The Bills increase the excise and excise-equivalent customs duty rate applying to certain alcoholic beverages. Two earlier Bills seeking to make the same amendments were negatived by the Senate on 18 March 2009. The Federal Opposition has indicated it will not oppose the two Bills. Taxes, fees and charges exempt from GST The A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2009 (No 2) has been registered and lists the Commonwealth and State and Territory taxes, fees and charges that are exempt from GST and commences on 1 July 2009.
ATO website updates From the ATO website:
The following rulings were released by the ATO on 24 June:
High Court: footballers entitled to management fees deductions In Spriggs v FCT; Riddell v FCT, the High Court unanimously allowed the appeals of two professional footballers from the decision of the Full Federal Court in FCT v Spriggs and Anor (2008) 71 ATR 804 and held that they were entitled to a deduction under s 8-1 of the ITAA 1997 for management fees, even though the fees were paid for the negotiation of new playing contracts. The High Court held that the fees were deductible as the players were obtaining and performing employment contracts as part of the business they carried on as professional sportsmen. No deduction for hire payments In 3D Scaffolding Pty Ltd v FCT, the Full Federal Court unanimously dismissed the appeals from a company and one of its directors from the decision in 3D Scaffolding Pty Ltd v FCT [2008] FCA 1477. In doing so, it confirmed that the company was not entitled to deductions for payments of $1.5 million allegedly made for the hiring of scaffolding equipment, and that the director was subject to Div 7A in respect of the payments. Div 7A applies: no exception for written agreements In AAT Cases [2009] AATA 435, 436, 438 and 439, the AAT found that Div 7A of the ITAA 1936 applied to 'loans' made by private companies to the husband and wife shareholder/directors of the companies. It did so, on the basis that they had failed to discharge the onus of proving that the relevant assessment were excessive and that, otherwise, the requirements of s 109D of the ITAA 1936 had been satisfied. Moreover, the AAT found that the exception in s 109N for written loan agreements (as then applicable) did not apply as the relevant documents, described as promissory notes, were not 'written agreements' between the companies and the taxpayers but rather were unilateral in form in that they were only executed by the borrowers and not the companies. Test case: government rebates and GST liability In TT-Line Company Pty Ltd v FCT, the Federal Court affirmed that a taxpayer was liable to GST on rebates received under a Commonwealth scheme. The issue before the Court was whether rebates received by the taxpayer were consideration within s 9-15 of the GST Act and, if so, whether the exception contained in s 9-15(3)(c) applied. The court acknowledged that the scheme was funded under an Act of the Commonwealth. However, in its view, a rebate must be specifically made by a government-related entity to another government-related entity for the exception to apply. GST: credit card default fees In American Express International Inc v FCT, the Federal Court held that default fees received from cardholders by two charge / credit card issuers did not constitute financial supplies. The court found that the fees were not consideration in connection with the provision of a credit arrangement or right to credit. It said the fees were compensation to the issuers for a cardholder's failure to perform its contractual obligations. In conclusion, the court held that the fees were not financial supplies and remitted the matter back to the Commissioner for reconsideration. De-alcoholised wines not GST-free In JMB Beverages Pty Ltd v FCT, the Federal Court affirmed that de-alcoholised wines manufactured and sold by a taxpayer were not GST-free because the wines did not satisfy the requirements of Items 11 and 12 in Sch 2 to the GST Act. It said the term 'juices of fruits' contained in the Items was confined to juices extracted from fruits and did not extend to 'fruit juice'. GST treatment of credit card administration fees In AAT Case [2009] AATA 442, Re Waverley Council and FCT, the AAT affirmed that the GST treatment of credit card administration fees imposed by a taxpayer would depend on the GST characterisation of the underlying supply for which a fee related to. The taxpayer is a local council. It imposed a variety of fees and charges for services provided to the community. If a payment was made by credit card, it charged the fee. The taxpayer's view was that GST was always payable on the fee. Input taxed supplies and assignment of leases of units In Gloxinia Investments Ltd ATF Gloxinia Unit Trust v FCT, the Federal Court held that a taxpayer's proposed assignment of leases of units in a residential building would constitute input taxed supplies under Subdiv 40-C of the GST Act. Wickenby: appeal dismissed, publication of evidence allowed In Hogan v Australian Crime Commission, the Full Federal Court dismissed the taxpayer's appeal from the decision in P v Australian Crime Commission & Anor (2008) 71 ATR 555. In that case, the Federal Court lifted all previous orders restricting or preventing the publication of evidence and other material relating to the Wickenby investigation of the taxpayer's affairs on the basis that, while the publication of the material may cause him personal embarrassment, it would not prejudice the administration of justice. The court also noted that claims for legal professional privilege had also been successfully made by the taxpayer. Appeals update The High Court has granted the taxpayer special leave to appeal against the decision of the Full Federal Court in FCT v Bruton Holdings Pty Ltd (in liq) [2008] FCAFC 184. The Full Federal Court had allowed the Commissioner's appeal against the decision of the Federal Court in Bruton Holdings Pty Ltd (Ltd) v FCT and Anor (2007) 67 ATR 618. The Federal Court had held that three notices issued by the Commissioner under s 260-5 of the TAA to the solicitors for the taxpayer were void pursuant to s 500 of the Corporations Act 2001 because the notices were an attachment issued after the company was put into liquidation.
New South Wales Budget Bill awaits Royal Assent The State Revenue Legislation Amendment Bill 2009 (NSW) has passed all stages of the New South Wales Parliament without amendment and awaits Royal Assent. The Bill implements the revenue measures announced in the New South Wales Budget 2009 - 10. New South Wales: State Revenue Legislation Further Amendment Bill introduced and passed The State Revenue Legislation Further Amendment Bill 2009 (NSW) has been passed by the New South Wales Legislative Assembly without amendment and has moved to the Legislative Council. The Bill makes substantive amendments to various New South Wales Acts. Major amendments proposed include:
Other important amendments relate to: the first home buyer schemes; land tax exemptions for land jointly owned; fines and penalty notices; and payroll tax. Victoria: State tax Acts amendment Bill awaits Royal Assent The State Taxation Acts Amendment Bill 2009 (Victoria) has passed all stages of the Victorian Parliament with amendments and awaits Royal Assent. Among other things, the Bill implements the Victorian Government's announced changes to the First Home Bonus from 1 July 2009. Queensland: Budget and other legislation amendment Bill receives Royal Assent The Fuel Subsidy Repeal and Revenue and Other Legislation Amendment Bill 2009 (Queensland) received Royal Assent as Act No 22 of 2009. The Bill implements the revenue measures announced in the 2009 - 10 State Budget. The Bill also:
The Bill also winds up the Queensland fuel subsidy scheme. Queensland: Revenue and Other Legislation Amendment receives Royal Assent The Revenue and Other Legislation Amendment Bill 2009 (Qld) received Royal Assent as Act No 19 of 2009. The Bill amends various Queensland legislation and regulations to support improved revenue administration, including by applying the Taxation Administration Act 2001 (Queensland) to land tax administration and facilitating the implementation of release three of the Revenue Management System being developed by the Queensland Office of State Revenue. The Bill also removes the prohibition on landlords passing on land tax directly to tenants.
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'DIY super losing its appeal' (Report of latest Tax Office figures showing fall in number of self-managed super funds being established) AFR [p 4], Wed 24.6.2009 'Emissions bill put in freezer' (Report that the fate of the emissions trading scheme will not be known until after August) AFR [p 4], Wed 24.6.2009 'Don't let year-end deadline trip you up' (The in-house asset rule for DIY super funds and the 30 June deadline) AFR [p 32], Wed 24.6.2009 'Labor's rules a crushing burden' (AFR Editorial on the increasing burdens on business from government regulation) AFR [p 62], Wed 24.6.2009 'Business stocks up on stimulus-package tax breaks' (Report that businesses are bringing forward capital expenditure to take advantage of the temporary investment allowance deduction) AFR [p 1], Tue 23.6.2009 'More finessing on share plans' (Federal Government expected to announce further changes to its tax changes on employee share schemes) AFR [p 3], Tue 23.6.2009 'Tax windfall for banks in Amex win' (American Express wins Federal Court case on GST and financial supplies) AFR [p 4], Tue 23.6.2009 'Expat changes may cut competitiveness' (Claim that foreign income tax changes for expats will mean they will pay more tax from 1 July) AFR [p 4], Tue 23.6.2009 'Lack of consultation on changes is key frustration' (Business concerned at lack of consultation by the Government on regulatory changes eg employee share scheme tax changes) AFR [p 12], Tue 23.6.2009 'Business leaders lay down the law on red tape burden' (Business leaders warn Federal Government of excessive and ill-conceived regulation) AFR [p 12], Tue 23.6.2009 'Super faces worst loss in years' (Report that the average investor faces double-digit losses on their super for 2008-09) AFR [p 46], Tue 23.6.2009 'With deductions, a day could count' (How timing influences the investment allowance deduction claim) AFR [p 52], Tue 23.6.2009 'Carbon scheme is the GST from hell' (Opinion on the options presented by a Senate committee for a scheme to address carbon reduction) AFR [p 63], Tue 23.6.2009 'Policy experts' conference proves a taxing affair' (Report that recent a two-day tax reform conference will be of doubtful help to the Henry tax review) AFR [p 4], Mon 22.6.2009 'Last-minute dash to top up super' (Superannuation advisers are seeing an increase in activity leading up to 30 June) AFR [p 5], Mon 22.6.2009 'Uproar over NSW land duty bill' (NSW Opposition and business groups claim a change to the landholder duty laws in NSW will lead to more businesses paying stamp duty) AFR [p 8], Mon 22.6.2009 'Tax secrecy shake-up may reveal files' (Legislation expected this week on revamp to tax secrecy laws) AFR [p 9], Mon 22.6.2009 'Charity sector in dark over reform' (Possible legislation this week on scrutiny of prescribed private funds) AFR [p 9], Mon 22.6.2009 'Too soggy for tax-loss selling' (Article on investors and tax-loss selling) AFR [p 17], Mon 22.6.2009 'Expert calls for more environmental taxes' (Report that a tax expert says environmental taxation should play a larger role in the tax system) AFR [p 4], 20-21 June 2009 'Hogan to appeal ruling' (Report that a taxpayer will appeal to the High Court to prevent details of his tax affairs becoming public) AFR [p 4], 20-21 June 2009 'Raise compulsory super, says perpetual' (Report that Perpetual Chief Executive has called for compulsory super to be lifted and incentives improved to boost voluntary payments) AFR [p 13], 20-21 June 2009 'ATO aims to ease burden' (Tax Office interest-free period for outstanding BASs for small business has its critics and supporters) AFR [p 14], 20-21 June 2009 'Take care with those last-ditch super payments' (Caution needed in making last-minute super contributions by the self-employed) AFR [p 43], 20-21 June 2009 'Obama rewrites the rules on risk' (Report that the US President has unveiled sweeping reforms to the US financial regulatory system - increases to the US Federal Reserve's monitoring powers, new consumer regulation, etc) AFR [p 1], Fri 19.6.2009 'Players score a legal victory' (Report of a High Court decision re footballers and claiming management fees as deductions) AFR [p 3], Fri 19.6.2009 'Super sector faces hefty fee shock' (Report that the Government's superannuation view has commissions in its sights - and comment that the industry's plans do no go far enough to protect investors) AFR [p 3], Fri 19.6.2009 'Tax deductions survive failed schemes' (Report that the Tax Office will not seek to claw back deductions from investors in failed managed investment schemes) AFR [p 4], Fri 19.6.2009 'ASIC makes it easier to raise capital' (ASIC has announced reforms to provide greater flexibility for listed companies seeking to raise capital from investors) AFR [p 5], Fri 19.6.2009 'The most progressive in OECD' (According to a study, Australia has the most progressive tax system among OECD) AFR [p 10], Fri 19.6.2009 'Guests' warning sounds sweet to business' (Report that the Henry tax review is looking at ways to reduce tax burden on business) AFR [p 10], Fri 19.6.2009 'Push for skills may loosen deductions' (Report that the Henry tax review is considering using tax incentives to encourage people to invest in their own education and skills) AFR [p 11], Fri 19.6.2009 'O'Farrell we'll cut payroll levy' (Report that the NSW Opposition has proposed a temporary payroll tax cut of up to 20 per cent) AFR [p 13], Fri 19.6.2009 'Secrecy laws reform' (According to the Australian Law Reform Commission, a new secrecy offence should be created for Commonwealth public servants) AFR [p 14], Fri 19.6.2009 'Aussie John sues Gadens over tax advice' (Report that a taxpayer has commenced court proceedings re tax advice regarding company restructure) AFR [p 44], Fri 19.6.2009 'Deloitte sets up special team for private practice' (Report that Deloitte has begun restructuring its private client practice to focus on the investment objectives of cashed-up private business) AFR [p 53], Fri 19.6.2009 'Rich donors face greater tax scrutiny' (Report that the Government will introduce new measures to tighten tax rules for charitable trusts) AFR [p 1], Thur 18.6.2009 'WA claims $1 billion in stamp duty' (Report that the WA Premier has told BHP Billiton that its planned merger with Rio Tinto will require the companies to pay WA up to $1bn in stamp duty) AFR [p 5], Thur 18.6.2009 'AICD warns against knee-jerk reaction' (Company directors urge Assistant Treasurer to postpone employee share scheme tax changes) AFR [p 6], Thur 18.6.2009 'Rudd reassures big end of town' (Report that the PM has acknowledged big business concerns about the dangers of over-regulation) AFR [p 6], Thur 18.6.2009 'First-time winners take all' (The tax and other incentives on offer to first home buyers) AFR [p 8], Thur 18.6.2009 'World's best inspire the Henry review' (A two-day invitation-only conference on the Henry tax review starts today in Melbourne) AFR [p 10], Thur 18.6.2009 'Hogan fights ATO request' (Report of an ongoing Wickenby case) AFR [p 10], Thur 18.6.2009 'Raise bar on tax reform' (AFR Editorial: comment on the Henry tax review) AFR [p 62], Thur 18.6.2009 'Rich will have to pay piper' (Opinion that significant increases in tax revenue are needed to get the budget back to surplus) AFR [p 62], Thur 18.6.2009 'Taxation office to take a hard line on old returns' (Report that for certain taxpayers who have outstanding returns, the Tax Office will make assessments based on its own information, deductions will not be considered and penalties may apply) AUSTRALIAN [Wealth, p 4], Wed 24.6.2009 'Shop or motel not super idea' (Article on SMSFs owning and running a business - covers Tax Office's views) AUSTRALIAN [Wealth, p 8], Wed 24.6.2009 'Super returns will be worst on record' (Report that super returns for this financial year will be the worst, according to figures) AUSTRALIAN [p 2], Tue 23.6.2009 'Not another new tax' (Opinion re suggestions to hand states the ability to impose surcharges on income tax) AUSTRALIAN [p 13], Tue 23.6.2009 'Panel warns against expat tax rule' (Report that a Senate committee has recommended winding back some of the exemptions under proposed changes to s 23AG) AUSTRALIAN [p 19], Tue 23.6.2009 'Stamp duty on home loans to be scrapped' (Report that the Henry tax review may recommend states receive share of income tax in exchange for scrapping stamp duty on home loans) AUSTRALIAN [p 1], Mon 22.6.2009 'Extra day pencilled in to deal with load' (Report that Federal Parliament may sit an extra day this week) AUSTRALIAN [p 2], Mon 22.6.2009 'Henry review spares investors' franking credits - for now' (Report that although franking credits will be untouched for now, the Henry tax review will outline long-term corporate tax reform which may include abolition of imputation) AUSTRALIAN [p 19], Mon 22.6.2009 'Rio-BHP tax bill hangs on high court hearing' (Report of a NT land rich case to be heard before the High Court re whether the option to renew mineral leases are land and therefore dutiable) AUSTRALIAN [p 20], Mon 22.6.2009 'ASIC in hot seat over Storm and Opes prime' (Report that the ASIC Chairman will face a Parliamentary joint committee inquiry into financial products and services) AUSTRALIAN [p 21], Mon 22.6.2009 'Swiss vow to help us battle tax scams' (Report that the US and Swiss authorities are close to signing an information sharing agreement re tax evasion) AUSTRALIAN [p 22], Mon 22.6.2009 'Hogan loses bid on secret dossier' (Report that the Full Federal Court has ruled that taxpayers' documents should not be kept confidential re Wickenby tax investigation) AUSTRALIAN [p 22], 20-21 June 2009 'Athlete's agent fees now a tax write-off' (Report of a High Court decision that professional footballers can claim player agent fees as a tax deduction) AUSTRALIAN [p 6], Fri 19.6.2009 'Super rules to target fee secrecy' (Report that IFSA's proposals will clarify fees paid by investors to their advisers) AUSTRALIAN [p 5], Thur 18.6.2009 'Hoges launches action on ATO' (Report that taxpayers have launched fresh court action against the Tax Office re the use of accounting advice in investigations) AUSTRALIAN [p 5], Thur 18.6.2009 'Better advice without sins of commissions' (Opinion that phasing out commissions in financial planning industry would improve quality of financial advice) AUSTRALIAN [p 17], Thur 18.6.2009 'Kloppers refuses state deal over disputed stamp duty' (Report that a taxpayer has met with the WA Premier re stamp duty and BHP Billiton's iron ore alliance with Rio Tinto) AUSTRALIAN [p 18], Thur 18.6.2009 'Approval given to wind up schemes' (Report that the Victorian Supreme Court has given the go-ahead for administrators to wind up olive and almond schemes that Timbercorp managed) AUSTRALIAN [p 19], Thur 18.
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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