|
If you have problems viewing this newsletter, please visit our website. |
| Brought to you in association with Thomson Reuters | Your weekly tax update | 20 August, 2009 |
|
Employee share schemes: draft legislation The Australian Government has released for consultation a package of draft legislation and associated materials to implement its reform to the taxation of employee share schemes. The Assistant Treasurer, Senator Nick Sherry, also asked the Board of Taxation to consult with industry on technical issues over the coming month in a two-track public consultation process. The draft package includes an exposure draft of the two Bills to implement the key changes as set out in the Australian Government's final policy statement of 1 July, exposure draft regulations and associated explanatory materials. Submissions are due by 31 August. CPA Australia believes that it would now be desirable for the proposed new regime for employer share schemes to be legislated as soon as possible to create certainty for business. However, it should be subsequently reviewed, following completion of relevant reviews by the Productivity Commission of executive remuneration generally and the Board of Taxation inquiry on the role of such schemes for small-to-medium enterprises (SMEs). Member input on the draft legislation is welcome and should be emailed to tax@cpaaustralia.com.au by 25 August. Taxes and transport: Henry review paper The Henry tax system review has released a conceptual framework for the reform of taxes that examines how transport services in Australia should be charged for, how such services can contribute to economic efficiency and how capital works in the transport sector should be funded. It concentrates on road transport and the supply of road services. The paper says a key issue in the transport sector is whether, in the medium term, governments should move away from collecting revenues via fixed charges (such as vehicle registration) and variable charges (such as taxes based primarily on fuels) towards a tax system based on user charges, which accounts more directly for the specific costs imposed by road users. In a speech yesterday on reform of state taxes, Dr Ken Henry raised the possibility that a new intergovernmental agreement in this area could also specify reforms to road funding and transport taxes at some time in the future when the necessary technology is available and suitably cost effective. New Deputy Inspector-General of Taxation The Inspector-General of Taxation, Ali Noroozi, has announced the appointment of Andrew McLoughlin as the new Deputy Inspector-General of Taxation. Mr McLoughlin has held various senior corporate taxation positions. Mr McLoughlin replaces Rick Matthews, who is retiring. Read the Inspector-General's work program for 2009 - 10. Upcoming consultations and meetings
Member enquiries or issues for these meetings should be sent to tax@cpaaustralia.com.au
Commissioner of Taxation: common sense should guide what is commercial Speaking at a recent Challis Taxation Discussion Group, the Commissioner of Taxation, Michael D'Ascenzo, discussed the use of common sense in deciding what is commercial in transactions or arrangements. Mr D'Ascenzo said that, '(w)hile undoubtedly a particular commercial transaction can be chosen from a number of possible alternative causes of action because of tax benefits associated with its adoption, there can be some hubris in the belief that a regulatory constraint which impedes (by sanction or cost) the achievement of commercial goals can always be worked around'. He highlighted specific compliance risks targeted in the ATO's 2009 - 10 compliance program and said the risks often reside in aspects of the arrangements that are not commercial. 'In short, if there is no sense to it, then it's not commercial,' he said. Commissioner's powers of general administration In a recent speech, the Second Commissioner of Taxation, Bruce Quigley, discussed the Commissioner of Taxation's general powers of administration in the context of assisting taxpayers in the global economic crisis. Refuting suggestions that the Commissioner of Taxation's powers are wide, Mr Quigley said the commissioner's powers in this respect are 'narrow in scope' in that they can only be exercised in relation to management and administrative decisions. Further, he said a lot of the assistance the ATO is providing taxpayers to help them meet their taxation obligations in the current economic climate is outside the scope of the commissioner's general administration powers. Instead, the commissioner has used discretions available under the existing taxation law to provide assistance. Australian Government to relax charity fund tax laws The Australian Government has announced that it will amend the tax legislation to widen the permitted uses of the tax-deductible donations made to the Victorian Bushfire Appeal Fund. The changes will apply retrospectively from 29 January 2009, and will be governed by a broad principle that the primary consideration of the fund remains the provision of assistance to individuals and communities affected by the bushfires, to ensure they are re-established to be thriving and socially inclusive. Under the proposed changes, the fund will be able to reimburse individuals or organisations for performing charitable activities. For affected primary producers, the fund may provide a grant of up to $10,000 for repair and restoration of farm activities, including re-fencing. Quality improvement and assurance for types of work: ATO practice statement The ATO has released Practice Statement Law Administration PS LA 2009/6 (Quality improvement and assurance: application of and conformance with the Integrated Quality Framework). It prescribes for ATO staff the corporate processes to be followed in improving and assuring the quality of written interpretative decisions and certain types of other actions, advice, decisions and information. The practice statement took effect on 1 July. ATO IDs: two new; four withdrawn The ATO has released the following IDs:
The ATO has withdrawn the following IDs:
ATO website updates From the ATO website:
Carbon Pollution Reduction Scheme Bills defeated in the Senate The Bills to implement the Australian Government's Carbon Pollution Reduction Scheme were negatived at second reading stage in the Senate (the vote was 42:30 against) on 13 August. The Bills had passed the House of Representatives with numerous government amendments to the main and consequent amendment Bills. 'Alcopops' Bills passed 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 passed all stages of parliament without amendment and await royal assent. Employee share schemes: Senate committee report tabled The Senate Economics References Committee has tabled its report on the operation of employee share schemes in Australia. The committee recommended that the Australian Government delay the introduction of the employee share scheme tax legislation in order to take note of the other reviews in this area, including the Productivity Commission and Board of Taxation and the Henry reviews, to maintain legislative integrity and coherence. However, in a dissenting report, Labor senators recommended that the Senate pass the Bill.
SMSF product rulings and SMSF advice: ATO The ATO has released Practice Statement Law Administration PS LA 2009/5 explaining the advice and guidance the ATO will provide to self-managed superannuation funds (SMSF) about the application of the Superannuation Industry (Supervision) Act and regulations. Following this and the release of its first ruling outlining a new product ruling system for SMSFs - Self Managed Superannuation Funds Product Ruling SMSFPR 2009/1 - the ATO released: SMSF-specific advice: SMSF product ruling advice: SMSF auditors independence: ATO comments The ATO has released the minutes of the South East Queensland Regional Tax Practitioner Working Group meeting held in Brisbane on 21 April. The meeting included a discussion on the role of approved auditors of SMSFs. In particular, the discussion focused on the separation of this role between the preparation of an SMSF's financial accounts and its income tax return. A representative from the ATO, Tony Xinis, advised there was no direct threat if an auditor was also the tax agent of the SMSF. However, the preparation of the accounts and the audit of the fund need to be independent. Mr Xinis said an accounting practice may undertake all necessary services for the SMSF and, therefore, independence is achieved through the division of responsibilities within the practice, that is, where adequate safeguards are in place. APRA draft guidance for superannuation trustees The Australian Prudential Regulatory Authority (APRA) has released for comment a discussion paper and draft guidance on a number of prudent practices for APRA-regulated superannuation trustees. The draft Superannuation Prudential Practice Guides include: SPG 110 (Capital), SPG 200 (Risk Management), SPG 230 (Adequacy of Resources) and SPG 530 (Fitness and Propriety). APRA said the draft guides address measures that might be employed by a trustee and its directors to satisfy obligations imposed under legislated licence conditions, various operating standards and other provisions under the Superannuation Industry (Supervision) Act and its regulations. Submissions are due by 14 September.
The following rulings were released by the ATO on 19 August:
CGT small business concession: partnership not 'entity' under former rules In White v FCT, the Federal Court held - for the purposes of the $5 million maximum net asset value test in the capital gains tax (CGT) small business concessions (as they then stood) - that a partnership is not an 'entity'. This means the partnership is not a 'connected entity' for the purposes of the requirement to aggregate the net value of 'connected entities' with those of the taxpayer and affiliates of the taxpayer for the purposes of the test.
Vic stamp duty: 'public float' exemption denied for property transfer within corporate group In Asciano Properties Operations Pty Ltd v Comr of State Revenue, the Victorian Supreme Court affirmed the Commissioner of Taxation's decision to deny a taxpayer a stamp duty exemption in relation to a property transferred between two members of the same corporate group under s 250D(1)(a) of the Duties Act 2000 (Vic).The central question was whether the taxpayer's 'severance' from the corporate group following the transfer of the property to it occurred as a result of a 'public float'.
General management Business imperatives for sustainability (claim up to 6 CPD hours upon completion) Forge a link between good corporate citizenship and better financial outcomes by familiarising yourself with the global reporting initiative (GRI), the concept of 'sustainability' and how to measure and report on it. Program information - learning manual Leading through uncertain times (claim up to 4 CPD hours upon completion) Lead through change and re-orient your strategies for ongoing resilience. This Harvard resource will provide you with task-based guidance on adapting strategies, focusing on fundamentals and communicating for strength. Program information - Online Business valuations (claim up to 8 CPD hours per topic) Calculate the value of your (SME) business using a range of valuation methods and explore factors that impact business value and aspects of business valuations and negotiation. Program information - New South Wales, Queensland, Victoria Congress 2009 CPA Congress is your first step to forge a path forward with a program tailored to address today's unprecedented issues and provide tangible skills, insights and practical ideas. Program information - Adelaide, Brisbane, Canberra, Melbourne, Perth, Sydney Leveraging technology Financial management using Microsoft Excel (claim up to 7 CPD hours per topic) Learn to effectively use spreadsheet applications and pivot tables to develop financial models that increase the accuracy of your forecasting, budgeting and strategic planning. Program information - New South Wales, Queensland, Victoria 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.
Fringe benefits: general principles DVD This program examines the overall frameworks and key principles in taxing fringe benefits. It deals with the legislation that applies until 31 March as it affects 2009 FBT returns. Now available to reserve from CPA Library.
'Infrastructure tax breaks on the table' (Henry tax system review panel to meet the board of Infrastructure Australia) AFR [p 1], Wed 19.8.2009 'Tax review to consider all options: Swan' (Treasurer says Henry review will consider all options for reform) AFR [p 7], Wed 19.8.2009 'Hard hats step up push for investment' (Private sector pushes for tax breaks to encourage infrastructure) AFR [p 12], Wed 19.8.2009 'Move it or lose it: get your assets in shape' (Super is not the only tax-effective investment option available) AFR [p 29], Wed 19.8.2009 'There's good reason to have a dedicated trustee' (There are advantages in DIY super funds having a dedicated company act as the corporate trustee) AFR [p 29], Wed 19.8.2009 'If returns aren't super, find out why' (Claim that if people are unhappy with returns from their super funds, they should be asking questions) AFR [p S8, Managed Funds Section], Wed 19.8.2009 'Troubled waters still lie ahead' (Claim that there are still some painful adjustments in store for super funds) AFR [p 36], Wed 19.8.2009 'Confusing sides of ledger for bookkeepers' (Letter to the Editor: clarification that BAS agents do not need to a register under the new tax agent services regime) AFR [p 59], Wed 19.8.2009 'Libs seek to delay revised share plan' (Senate committee recommends deferral of new rules on the taxation of employee share schemes) AFR [p 5], Tue 18.8.2009 'PM refuses to take bait on home CGT' (Report that the PM does not rule out CGT on family homes, but says the tax system review should consider all options) AFR [p 9], Tue 18.8.2009 'Tax reform tests Rudd' (Comment on the ongoing tax system review debate) AFR [p 9], Tue 18.8.2009 'Draft share laws create real conundrum' (The draft share schemes legislation raises questions) AFR [p 9], Mon 17.8.2009 'Early wins in swoop on UBS tax clients' (Report that a California client of UBS has agreed to plead guilty to a charge of failing to file a tax report) AFR [p 10], Mon 17.8.2009 'Investors still in dark about super risks' (Claim that super funds still coming to grips with issues re some funds' large holdings of unlisted assets) AFR [p 45], Mon 17.8.2009 'Share scheme tax rules still unloved' (Concerns expressed over draft legislation on the tax treatment of employee share schemes) AFR [p 2], 15-16 August 2009 'ATO expects more cheats in good times' (Report that ATO believes there is an increased risk of businesses avoiding tax as the economy picks up) AFR [p 7], 15-16 August 2009 'Delaying pension can be a bonus' (Putting off retirement can give some tax-free benefits) AFR [p 43], 15-16 August 2009 'Regulator checks super fees' (Report that the Government has asked APRA to investigate super funds that increase fees) AFR [p 5], Fri 14.8.2009 'Swiss bank to dob in 5000' (UBS and the US Justice Dept reach agreement about disclosure of names in tax evasion case) AFR [p 17], Fri 14.8.2009 'Tax review considers radical user-pays roads plan' (Henry tax system review releases paper on reform of taxes related to roads and transport) AFR [p 1], Thur 13.8.2009 'Out of office into the shed' (Report that more people are working from home, but warning of pitfalls e.g. insurance and tax) AFR [p 3], Thur 13.8.2009 'Fuel tax lift likely from Henry review' (Comment on the Henry tax review paper on reform of taxes related to roads and transport) AFR [p 4], Thur 13.8.2009 'High court to consider Hogan case' (Report that High Court will expedite a hearing concerning an appeal for special leave concerning a legal professional privilege claim over documents in a tax case) AFR [p 9], Thur 13.8.2009 'Tax rate changes still on table: PM' (Report that the PM has said the Government will wait for the outcome of the Henry tax review before making commitments) Australian [p 4], Tue 18.8.2009 'US extends UBS tax dodge investigation' (According to US court documents, tax schemes may use Hong Kong enterprises to hide money from US authorities) Australian [p 23], Tue 18.8.2009 'Tax laws relaxed for $380m bushfire fund' (Government has announced legislative changes to widen the permitted uses of donations in the Victorian bushfire appeal fund) Australian [p 5], Mon 17.8.2009 'Super fund fees climb despite competition' (According to figures, choice of super may be driving fees higher as funds compete to offer more services) Australian [p 23], Mon 17.8.2009 'Family homes face tax' (Report that the Government has asked Treasury to model various CGT scenarios on family homes valued at $2 million or more re Henry tax review - but the Treasurer has denied the Government was considering such a tax) Australian [p 1], 15-16 August 2009 'Political reality blunts tax reform likelihood' (Comment on the case to subject the family home to CGT) Australian [p 4], 15-16 August 2009 'OECD to crack down on tax cheats' (Report that the OECD will push to formalise the Global Forum on tax information sharing with permanent examiners to ensure members are aiding each other in tax evasion cases) Australian [p 30], 15-16 August 2009 'Hogan closer to high court goal' (Report that the High Court has agreed to expedite a tax dispute case re access to confidential documents in a Project Wickenby probe) Australian [p 3], Thur 13.8.2009 'Tax crackdown on offshore workers could hammer corporations' (Claim that Government's foreign workers tax changes will affect workers' decisions to work overseas) Australian [p 20], Thur 13.8.2009 'UBS strikes deal in tax evasion probe' (Report that a Swiss bank and the US and Swiss Governments have settled a long-running tax evasion probe) Australian [p 21], Thur 13.8.2009
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 associationwith 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. CPA
Australia members may reproduce up to five Thomson stories from any one
issue of 'CPA Australia Tax News' for inclusion in client newsletters,
brochures and firm websites provided the material is acknowledged as the
copyright of Thomson Reuters (Professional) Australia Limited. Requests to
reproduce more than five stories from any one issue of 'CPA Australia Tax
News' should be directed to TLRAP.copyright@thomsonreuters.com |
Contents
|
Print-friendly version
