Tax Law - Foreign Source Income - Centrelink
Date: May 15, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over the years the ATO has turned its attention to a number of taxation exploitation schemes. During the course of the current calendar year one of their major points of focus is Australian residents with undeclared foreign source income e.g. foreign investment income or income earned from inherited assets.
Tax Law - Tax Evasion and Money Laundering - Queensland Arrest
Date: May 15, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Sometimes the wider community thinks the Australian Taxation Office has gone soft on tax evasion and money laundering which could not be further from the truth. On 26 April 2012 the Australian Federal Police and the ATO published a joint media release indicating that a 67 year old man had been arrested and more than $40M of assets had been restrained under the Commonwealth Proceeds of Crime legislation.
Business & Commercial Law - New Business Name Registration Regime with ASIC
Date: May 08, 2012
Author(s): Ben Youn LL.B., B.Bus (Accounting)
As of 28 May 2012, registration of business or trading names will be handled by the Australian Securities and Investments Commission which is done by completing and lodging an online application to the aforementioned government agency.
Tax Law - Business Running Guide: Unit Trust(Part 1)
Date: May 08, 2012
Author(s): Ben Youn LL.B., B.Bus (Accounting)
This series of articles discusses the features, characteristics, advantages and other matters regarding unit trusts in Australia. Part 1 discusses the summary of features and characteristics.
Tax Law - Business Running Guide: Unit Trust(Part 2)
Date: May 08, 2012
Author(s): Ben Youn LL.B., B.Bus (Accounting)
This series of articles discusses the features, characteristics, advantages and other matters regarding unit trusts in Australia. Part 2 discusses the trustee's liability and the trustee's right to indemnity.
Tax Law - Business Running Guide: Unit Trust(Part 3)
Date: May 08, 2012
Author(s): Ben Youn LL.B., B.Bus (Accounting)
This series of articles discusses the features, characteristics, advantages and other matters regarding unit trusts in Australia. Part 3 discusses how unit trusts compare against companies and how taxes are applied after entitlements are received.
Tax Law - Property Investors - New Initiative
Date: April 26, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
It should come as no surprise that the ATO is targeting 1.5 million property investors and more particularly those who are claiming deductions and interest expenses for personal liabilities accommodated under various loan arrangements.
Tax Law - When are directors personally liable for unremitted tax deductions?
Date: April 18, 2012
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Australian taxation laws require an employer to withhold PAYG from the salaries, wages, commissions, bonuses or allowance of its employees. Due to the fact that the ATO has lost its priority claim in insolvency administrations over other unsecured creditors for tax since 1993, the ATO can make directors personally liable for unpaid group taxes, PAYG and certain other taxes such as withholding tax on dividends and interest.
Tax Law - CGT - Application of CGT for Non-Residents
Date: March 27, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Australian residents are able to enjoy benefits afforded to them solely because they are registered Commonwealth citizens. All applications for residency are meticulously assessed by the ATO utilising a variety of tests to determine whether an entity(ies) can be treated as a resident for taxation purposes.
Tax Law - CGT - Application of CGT for Non-Residents and Temporary Residents
Date: March 27, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Australian residents are able to enjoy benefits afforded to them solely because they are registered Commonwealth citizens. All applications for residency are meticulously assessed by the ATO utilising a variety of tests to determine whether an entity(ies) can be treated as a resident for taxation purposes.
Tax Law - Penalties and Interest - Interest charges
Date: March 27, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
There are two types of interest charges upon which the ATO relies. Firstly the General Interest Charge, and secondly the Shortfall Interest Charge and in this interest environment there is also the concept of the base rate.
Tax Law - Penalties and Interest - Remission of penalties
Date: March 27, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In essence taxpayers with a good compliance history are far more likely to be treated leniently than those otherwise. Wherever a taxpayer has a shortfall amount all the relevant circumstances including their compliance history are considered in deciding whether it is fair and reasonable to remit penalty in whole or in part.
Tax Law - Tax Non-Compliance - Penalties
Date: March 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
As we have indicated previously there are three types of penalties : Civil, Criminal and Administrative. Under the administrative penalty regime a taxpayer was liable to a penalty of 75% of the amount of the tax shortfall where the taxpayer fails to lodge a document necessary to establish the basis of the tax-related liability and the ATO is forced to raise a default assessment.
Tax Law - Tax Non-Compliance - Penalties and Interest
Date: March 19, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The one thing which all revenue systems have in common around the world is imposition of penalties and interest where tax non-compliance is detected. Where this occurs in Australia the ATO has to consider whether or not the taxpayer is liable to penalties and/or interest charges.
Tax Law - Charities and tax(Part 1)
Date: March 05, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Charities of various types get major tax concessions, as is well known. The issue of identifying a charity therefore is of great importance in tax law. This article covers the issues in a recent ATO ruling which deals with the identification of charities.
Tax Law - Charities and tax(Part 2)
Date: March 05, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Part 1 of this article dealt with how charities are treated for tax purposes, and the process of getting an ATO endorsement. Parts 2 and 3 of this article will look at how “charitable” is defined for tax purposes.
Tax Law - Charities and tax(Part 3)
Date: March 05, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This final part of this article will look at controversial areas of defining “charitable purpose”.
Employment Law - Contractors - GST, superannuation payments and ABN
Date: March 01, 2012
Author(s): Piria Coleman B.A., LL.B. (Hons)
Usually independent contractors do not have the benefit of receiving compulsory superannuation contributions. It is prudent, however, to obtain specialist superannuation advice from a legal practitioner or a certified accountant, as to the circumstances in which an independent contractor is entitled to the benefit of compulsory superannuation contributions.
Tax Law - Exempt or rebatable employers
Date: February 27, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the subject of non-profit employers who receive exemptions or rebates for FBT purposes. Since employers are the entities that report and pay FBT, it is vital for the employer to determine accurately whether they are eligible for such concessional treatment.
Tax Law - Housing Fringe Benefits(Part 1)
Date: February 27, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with various issues that arise in respect of housing fringe benefits. Part 1 of this article deals with housing fringe benefits generally, while part 2 of this article will deal with exempt housing benefits. Note that benefits that constitute a living away from home allowance (LAFHA) is dealt with in our companion article on that topic.
Tax Law - Housing Fringe Benefits(Part 2)
Date: February 27, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with various issues that arise in respect of housing fringe benefits. This part of the article deals with concessions and exemptions in respect of housing fringe benefits.
Tax Law - Remote area reductions
Date: February 27, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
As discussed in our companion article on Housing fringe benefits, remote area housing benefits can be exempt from FBT. This article will look at the reductions in fringe benefit taxable value that can also apply where the benefit relates to remote areas.
Tax Law - Residency and FBT
Date: February 27, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the often-overlooked question of the effect of residency of employees upon FBT liability
Tax Law - Airline transport fringe benefits (Part 1)
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A classic form of fringe benefit is the provision of air travel to employees. For the most part, such fringe benefits will be covered by residual fringe benefits. However, in certain circumstances airline transport benefits to employees of airlines, or their associates, have to be treated under a special FBT regime.
Tax Law - Airline transport fringe benefits (Part 2)
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Part 1 of this article dealt with how to value airline transport fringe benefits. This part will deal with consumer loyalty programs and other discounts and how they impact on taxable value.
Tax Law - Child care and recreational facilities benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Special FBT rules apply to exempt child care and recreational facilities benefits from the FBT regime under certain circumstances. This article deals with these exemptions.
Tax Law - Debt waiver fringe benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with debt waiver fringe benefits, under which the employer waives part or the whole of an employee’s debt. We will cover the taxable value of this form of benefit, as well as some issues over definition.
Tax Law - Exempt commercial motor vehicle benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
We have already looked at car fringe benefits in another article. However, now we will look at the FBT exemption that applies to commercial vehicles.
Tax Law - Expense Payment fringe benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A common form of fringe benefit is the expense payment fringe benefit, where one party reimburses expenses incurred by an employee. This article looks at how FBT treats expense payment fringe benefits.
Tax Law - FBT and Division 7A
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
An oddity of the FBT Act is the exclusion from the definition of “fringe benefit” of any amount that is deemed to be a dividend to the recipient under Division 7A of the Tax Act. This exclusion gives rise to some unusual side-issues that we will look at here.
Tax Law - Loan fringe benefits (Part 1)
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
One of the more common fringe benefits is a loan fringe benefit. Identifying when such loans have arisen, and working out the taxable value of the benefit provided, can be surprisingly complicated. This part of the article will deal with identifying when a loan fringe benefit has arisen.
Tax Law - Loan fringe benefits (Part 2)
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The first part of this article dealt with defining a loan fringe benefit in unusual situations. This second part of the article will deal with how loan fringe benefits are valued.
Tax Law - Paying FBT
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with various issues relating to how FBT is calculated and paid. The article covers the rate of FBT, taxable value, grossing up and how FBT interacts with income tax and GST.
Tax Law - Pool cars and FBT
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Pooled or shared cars are sometimes given concessional treatment for FBT reporting purposes. This article deals with the relevant rules.
Tax Law - Recording fringe benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the compliance requirements upon employers to record relevant fringe benefits adequately. This covers general record keeping as well as more specific topics.
Tax Law - Reporting fringe benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article covers the reporting requirements of FBT. It covers the definition of excluded benefits as well as the requirements for payment summaries.
Tax Law - Residual fringe benefits
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Residual fringe benefits were designed to catch all forms of fringe benefit that do not fall under a specific category, not even property benefits or expense payment benefits. Over the years residual fringe benefits have been subject to a process of accretion, so that many, otherwise unrelated, forms of benefit can fall under the definition.
Tax Law - Work related health care - FBT exemptions
Date: February 23, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
FBT exemptions apply to various forms of “benefit” that relate to occupational health in various ways. The policy reason for these exemptions is self-evident. However, this article will deal with some of the ambiguities that can arise in defining “work related health care”.
Tax Law - Annual compliance arrangements(Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO has always recognised the importance of large business entities to the general well-being of the Commonwealth. If nothing else, large business entities contribute no less than 60% of annual income tax revenue to the Commonwealth. Annual compliance arrangements (ACAs) are just one way amongst many for the ATO to engage with large businesses and ensure throughgoing compliance as far as possible.
Tax Law - Advance pricing(Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
In part 1 of this article we saw that advance pricing arrangements (APAs) are a means by which the ATO seeks to kerb transfer pricing. This part of the article goes into more detail on the APA system.
Tax Law - Advance pricing(Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
One of the ways that the ATO can impact international transactions is through the advance pricing arrangement (APA) program, which aims to mitigate the practice of “transfer pricing”.
Tax Law - Capital Gains Tax - CGT Events(Part 1)
Date: February 22, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
CGT events are circumstances that could either give rise to a capital gain or result in a capital loss. It is only after the occurrence of a CGT event that an entity would be liable to pay CGT and be subject to the application of the provisions for that particular event.
Tax Law - Capital Gains Tax - CGT Events(Part 2)
Date: February 22, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
CGT events are circumstances that could either give rise to a capital gain or result in a capital loss. It is only after the occurrence of a CGT event that an entity would be liable to pay CGT and be subject to the application of the provisions for that particular event.
Tax Law - FBT and salary sacrifice arrangements
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
As described in our companion articles on FBT, salary sacrifice arrangements (SSAs) were in former times a way of rewarding employees whilst getting around income tax. While the advent of FBT in 1986 made such considerations less viable, SSAs are still common as a way of providing incentive to employees.
Tax Law - FBT nexus requirement
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Possibly the most basic question in determining whether a taxable fringe benefit exists, is whether the relevant benefit is provided “in respect of employment”. This article deals with this seemingly innocuous requirement and the complexities it hides.
Tax Law - FBT, associates and third parties
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
FBT is a tax upon fringe benefits, which most people would associate with benefits other than money which employers bestow directly upon employees. However, what happens if the benefit is provided to a family member of the employee? What is the employee receives a benefit from a party other than the employer? This article deals with associates and third parties for the purposes of FBT.
Tax Law - Tax Evasion - Tax planning
Date: February 22, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
It goes without saying, tax evasion is the biggest threat to the Commonwealth’s largest revenue stream. Suffice to say the ATO continuously revamps and improves its strategies year after year to address the problem. While the number of tax offenders has dwindled since the implementation of new tax system (ANTS) there continues to be a large number of entities who fail to comply with their tax and superannuation obligations.
Tax Law - Promoter penalty laws(Part 5)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This final part of this article deals with miscellaneous issues arising in relation to promoter penalty laws, particularly criminal law consequences of these laws.
Tax Law - Promoter penalty laws(Part 4)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Part 3 of this article dealt with the actions that may be taken against promoters of tax exploitation schemes (TESs), and looked briefly against the ability of the promoter to enter a voluntary undertaking instead of being punished. This part of the article deals with the civil penalties and statutory injunctions that may be imposed as remedies against promoters.
Tax Law - Tax havens(Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Tax havens are increasingly targeted by tax authorities throughout the world. The ATO and other tax authorities target the exploitation of tax havens by taxpayers to conceal their assets and income.
Tax Law - Tax havens(Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The previous part of this article on tax havens looked at the ATO’s stance towards tax haven abuse and the potential penalties applying. This part of the article examines the forms of dealing with tax havens that constitute abuse.
Tax Law - Calculating GST Turnover
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The GST was introduced as an indirect, broad based consumption tax, ultimately borne by consumers but applicable based on whether the supplying entity is registered for GST. Whether a supplying entity is required to be registered for GST depends on its GST turnover.
Tax Law - GST and the margin scheme - An Introduction
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Where a taxable supply is of real property, the GST system permits the purchaser and seller to agree to use the so-called “margin scheme”. This is a more efficient and less time consuming method of calculating the GST on the sale.
Tax Law - GST groups (Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The GST group is an option method by means of which multiple entities can effectively treat themselves as a single entity for GST purposes. This can provide substantial administrative savings, as well as ensuring that intra-group transactions do not have to be treated as GST taxable.
Tax Law - GST groups (Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Part 1 of this article dealt with the basics of eligibility to form a GST group and the effects of forming such a group. This part of this article deals with some specific issues arising in relation to GST groups.
Tax Law - Defending tax debts
Date: February 22, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The problem for taxpayers in dealing with taxation debts has always been Section 177(1) of the ITAA 1936. It says that the production of a Notice of Assessment by the Commissioner shall be conclusive evidence of the making of the assessment, except in proceedings Part IVC of the TAA 1953 on a review or appeal relating to the assessment, that the amount and all the particulars of the assessment are correct.
Tax Law - PAYG voluntary agreement
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
PAYG withholding generally applies to employer-employee relationships, and not to wages paid to independent contractors. However, there are circumstances where an independent contractor would prefer to have amounts withheld under the PAYG system. This is where PAYG voluntary agreements come into play.
Tax Law - PAYG Withholding (Part 1 of 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Although all individual taxpayers provide revenues to the government, the fact is that a substantial portion of individual income tax is not levied from the individual directly but through PAYG. This article deals with the PAYG withholding system and how it operates.
Tax Law - PAYG Withholding (Part 2 of 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of this article deals with situations where PAYG withholding applies to payments, other than salary or wages.
Tax Law - An introduction to the Fringe benefits tax(FBT)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Most people who consider how employees are remunerated for employment would think first of salary and wages. However, a common – and formerly abused – form of remuneration involves the employer providing benefits to the employee other than money. The fringe benefits tax (FBT) was introduced in 1986 to kerb such usages.
Tax Law - Car Fringe Benefits (Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
An area of FBT that is notoriously complex and yet commonly encountered by employers, is the provision of car fringe benefits. Such benefits are fairly commonly provided, yet compliance can be difficult.
Tax Law - Car Fringe Benefits (Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of the article deals with the complex valuation methods that apply to car fringe benefits.
Tax Law - FBT and seminars
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
One of the most confusing aspects of the fringe benefits tax (FBT) is how FBT treats seminars provided in respect of employment. This controversy is very much alive, with many employers being unsure of how to treat such events.
Tax Law - FBT exemptions
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
In former times, fringe benefits were a way that employers could provide incentives to employees while circumventing income tax. Provided the employee did not mind taking benefits other than money, fringe benefits could substitute for any amount of wages.
Tax Law - LAFHA Fringe benefits(Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
It is common for employers to pay an allowance to employees to compensate for situations where the employee is obliged to live away from home. This article deals with the living away from home allowance (LAFHA) and how FBT can apply to it.
Tax Law - LAFHA Fringe benefits(Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of the article deals with the living away from home allowance (LAFHA) and the FBT exempt components of such allowances.
Tax Law - Meal Entertainment Fringe Benefits (Part 1)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article will deal with a particular form of entertainment fringe benefit in which a meal provided in respect of employment is deemed to be entertainment.
Tax Law - Meal Entertainment Fringe Benefits (Part 2)
Date: February 22, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of this article deals with how the taxable value of meal entertainment fringe benefits is to be calculated.
Tax Law - Value Shifting Essentials (Part 1)
Date: February 21, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Value shifts happen when there is transaction between two parties and the value used for the transaction is not the market value of the asset(s). As a result, the value of an asset from one party is decreased while the value of the other is increased, creating an opportunity to artificially create losses or gains to be used for tax evasion purposes.
Tax Law - Value Shifting Essentials (Part 2)
Date: February 21, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Indirect value shifting happens when two parties under the same ownership engage in a transaction.
Tax Law - Superannuation - Trust Deeds - Excess Contributions Tax
Date: February 21, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Excess contributions tax has become a hot potato over the last few years. As a result the ATO introduced TA2010/2 striking down clauses in self –managed superannuation fund trust deeds designed to circumvent the imposition of excess contributions tax.
Tax Law - Compliance Programme 2011 - 2012 Fiscal Year (Part 3)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The collection and recovery of tax debts has proved challenging for the ATO in the last financial year. Declining economic conditions coupled with natural disasters have made tax and superannuation compliance hard for everyone. That said, some taxpayers have resorted to cheating the taxation system but as the year progressed, the ATO was able to address some of these problems.
Tax Law - Compliance Programme 2011-2012 Fiscal Year(Part 1)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The collection and recovery of tax debts has proved challenging for the ATO in the last financial year. Declining economic conditions coupled with natural disasters have made tax and superannuation compliance hard for everyone. That said, some taxpayers have resorted to cheating the taxation system but as the year progressed, the ATO was able to address some of these problems.
Tax Law - Compliance Programme 2011-2012 Fiscal Year(Part 2)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The collection and recovery of tax debts has proved challenging for the ATO in the last financial year. Declining economic conditions coupled with natural disasters have made tax and superannuation compliance hard for everyone. That said, some taxpayers have resorted to cheating the taxation system but as the year progressed, the ATO was able to address some of these problems.
Tax Law - Compliance Programme 2011-2012 Fiscal Year(Part 4)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The collection and recovery of tax debts has proved challenging for the ATO in the last financial year. Declining economic conditions coupled with natural disasters have made tax and superannuation compliance hard for everyone. That said, some taxpayers have resorted to cheating the taxation system but as the year progressed, the ATO was able to address some of these problems.
Tax Law - Financial Year 2010-2011 - Offences, convictions, recovered amounts and sentencing
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The ATO has become more vigilant and has adopted a far more sophisticated approach to pursue individuals and companies who not comply with their tax-related obligations. The 2010-2011 financial year has lead to a large number of tax-related convictions and superannuation offences.
Tax Law - Project Wickenby - Prosecutions and Amount Recovered (Part 1)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In 2006 the Australian Government funded Project Wickenby, a cross-agency task force in an effort to fight and prevent the participation in and promotion of abusive international tax schemes through the use of tax or secrecy havens. The government provided a total of $430.9M to fund the project until 2013. While the amount for the project is quite hefty, the “investment” made by way of Australian taxpayer dollars has yielded very promising results.
Tax Law - Project Wickenby - Prosecutions and Amount Recovered (Part 2)
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
More than half of the revenue collected by Project Wickenby came from voluntary disclosures. The majority of the remaining amounts ($276M) was collected through prosecutions and court judgments. As of the date of this writing, 62 individuals have been charged with serious offences under Project Wickenby.
Tax Law - Tax Havens
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The mere fact that a taxpayer has overseas assets, income and bank accounts is not illegal. Similarly the use of a tax haven for a legitimate business enterprise or other purpose is not illegal provided there is transparency with respect to these overseas dealings and no attempt is made to hide an/or conceal the true nature of what is occurring.
Tax Law - Tax Havens - Legal use and exemptions
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In general, tax havens have always had a negative connotation regardless of the country, state or territory in which the person resides. Tax havens are normally thought of as a way to illegally lower or evade tax obligations by hiding money in foreign accounts, hoping that they will not be discovered. Contrary to popular belief, many Australian taxpayers who have dealings with foreign banks in tax havens are acting within the law.
Tax Law - Cash Economy
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In November 1996 Michael Carmody, the former Commissioner of Taxation established the Cash Economy Taskforce to address the Commonwealth’s escalating problems regarding businesses that participate in the cash or underground economy. While the ATO has had programmes in the past to address this problem, the Commissioner found it necessary to create a project that would specialise in the matter. The Taskforce aims to refine strategies and continue those that have been successful in mitigating and pursuing participants of the cash economy to rid the Commonwealth of the problem.
Tax Law - Common tax evasion schemes through tax havens
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Since 2006 Project Wickenby has tried to address the Commonwealth’s problems with entities who use tax or secrecy havens to avoid or minimize payment of their tax obligations. The first course of action for the project or for any task-force for that matter is to identify the problem and how best to deal with it. There are a number of common scheme arrangements of which the ATO is aware.
Tax Law - Taxation of Foreign Employment Income
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Australians working overseas may be entitled to exemption from paying Australian tax. Generally a resident will be required to pay tax or other tax-related obligations. This also applies for non-residents whose source of income is from the Commonwealth. A company not incorporated in Australia may nevertheless be regarded as a resident by the ATO and be required to pay taxes if its central control and management is located in Australia.
Tax Law -Tax Haven - Tax Information Exchange Agreement
Date: February 20, 2012
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The OECD (Organisation for Economic Co-Operation and Development) developed Tax Information Exchange Agreement to help different states and countries to obtain relevant information on taxpayers from their respective countries or states. Member states cannot be hindered by bank secrecy laws when obtaining relevant data regarding a taxpayer’s offshore assets and income.
Tax Law - Debt Recovery - False or misleading statements(Part 2 of 4)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the ATO’s power to impose and increase administrative penalties upon unpaid tax debts, in situations where the taxpayer has made a false or misleading statement.
Tax Law - Debt Recovery - False or misleading statements(Part 3 of 4)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the ATO’s power to impose and increase administrative penalties upon unpaid tax debts, in situations where the taxpayer has made a false or misleading statement. This part of the article deals with “recklessness.”
Tax Law - Debt Recovery - False or misleading statements(part 4 of 4)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the ATO’s power to impose and increase administrative penalties upon unpaid tax debts, in situations where the taxpayer has made a false or misleading statement. This part of the article deals with “intentional disregard”.
Tax Law - Large business entities(Part 1)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO does not treat large business entities with the same anonymity as other taxpayers, since there are relatively few of them and they contribute a disproportionate amount to revenues. This article deals with the special rules developed by the ATO to deal with, and engage with, large businesses.
Tax Law - Large business entities(Part 2)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO does not treat large business entities with the same anonymity as other taxpayers, since there are relatively few of them and they contribute a disproportionate amount to revenues. This article deals with the special rules developed by the ATO to deal with, and engage with, large businesses.
Tax Law - Large business entities(Part 3)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO does not treat large business entities with the same anonymity as other taxpayers, since there are relatively few of them and they contribute a disproportionate amount to revenues. This article deals with the special rules developed by the ATO to deal with, and engage with, large businesses.
Tax Law - Large business entities(Part 4)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO does not treat large business entities with the same anonymity as other taxpayers, since there are relatively few of them and they contribute a disproportionate amount to revenues. This article deals with the special rules developed by the ATO to deal with, and engage with, large businesses.
Tax Law - Promoter penalty laws(Part 2)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Part 1 of this article dealt with identifying the promoter entity for the purposes of the promoter penalty laws. This part of the article deals with difficulties relating to identifying the promoter of a scheme, in the case of different forms of entity, arrangement and structure.
Tax Law - Promoter penalty laws(Part 1)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO is desirous of maximising returns upon monies spent on tax enforcement. Thus, it can often make sense to target entities which promote tax avoidance and evasion schemes to multiple taxpayers. Targeting such entities can save the revenue from multiple acts of tax avoidance/evasion.
Tax Law - Promoter penalty laws(Part 3)
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of this article on the promoter penalty regime covers the actions that may be taken against promoters who are liable for penalties.
Tax Law - Interest paid by the ATO
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
It is usual to think of interest, in relation to tax related amounts, only in terms of interest payable by the taxpayer to the ATO (such as the general interest charge). However, there are limited situations where the ATO will be obliged to pay interest to taxpayers. This article deals with these situations.
Tax Law - Natural disasters
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the special dispensations that the ATO gives, for taxpayers who are affected significantly by natural disasters. Natural disasters which the ATO will deal leniently include floods, bushfires and storms. Sometimes the Commissioner will release a statement that a particular recent natural disaster will qualify for leniency, such as happened during the Queensland floods of early 2011.
Tax Law - Wine equalisation tax
Date: January 17, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with a somewhat unusual form of taxation which applies to wholesalers of wine. The wine equalisation tax (WET) is a value based tax administered by the ATO for the "last wholesale sale" of wine, particularly grape wine products. Normally, this would be the transaction that occurs where the wholesaler sells wine to a retailer.
Tax Law - CGT exemption essentials
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article sets out in summary form the various available forms of CGT exemption, some of which are dealt with in more detail in companion articles.
Tax Law - Consolidation essentials
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Needless to say, separate income taxation of multiple entities can prove complex and costly. Complex tax administration requires resources and personnel that could otherwise be used. That said, the ATO allows wholly-owned groups to consolidate for taxation purposes. The consolidation regime is itself extremely complicated. This article sets out the basics of the regime and how it applies.
Tax Law - Cost Base(Part 1) - Costs of acquisition
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A capital gain exists where the capital proceeds attributable to a capital event exceed the cost base of the relevant CGT asset. Capital proceeds are relatively simple to calculate. The more involved issue is the calculation of the cost base of the asset.
Tax Law - Cost Base(Part 3) – Reduced cost base
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A capital gain exists where the capital proceeds attributable to a capital event exceed the cost base of the relevant CGT asset. However, a capital loss exists where the capital proceeds are exceeded by the reduced cost base of the asset.
Tax Law - Demerger(Part 5) – Cost base calculation
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A complicated and often misunderstood area of tax law is the CGT and dividend tax relief available in respect of demergers. A demerger occurs when a group of entities (basically, companies or fixed trusts) divides itself into multiple entities or groups in a certain way. This part of the article goes into more detail about how the interest-holders of the head entity ought to adjust the cost bases of the interests in the demerged entity they end up holding.
Tax Law - Main residence exemption - Part 1 of 3
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
CGT normally applies to capital gains that arise upon the disposal of land. To most individuals, the most important exemption applicable to this situation is the main residence exemption.
Tax Law - Widely based tax disputes(Part 1)
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Taxation is a complex and ever-evolving field where, inevitably, oddities and contradictions arise every so often. The ATO is aware of this likelihood. Typically, a dispute over the application of tax law is between the ATO and a taxpayer over a specific tax matter. However, there are times when disputes between taxpayers and the ATO, over the same matter, happen on a larger scale. These instances are what the ATO calls as widely-based tax disputes.
Tax Law - Widely based tax disputes(Part 3)
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This part of this article looks at the principles that the ATO uses when assessing a settlement proposal relating to a widely-based tax dispute.
Tax Law- CGT Calculation(Part 2) – More about the general discount
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
As we saw in Part 1 of this article, one of the three alternative techniques for calculating capital gains on the happening of a CGT event, is the general discount method. Using this method, entities including individuals and trusts may receive up to a 50% reduction of the capital gain that would otherwise exist.
Trusts - Division 7A and trust entitlements
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Under Division 7A of the Tax Act, it is possible for loans made by private companies to associated entities to be deemed as dividends to the recipient (and thus subject to income tax). This article deals with an issue recently contemplated by the ATO, when the associated entity is a trust and the private company is presently entitled to amounts from the trust.
Trusts - Managed Investment Trusts - Part 1 of 2
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A managed investment scheme (MIS) is a well-known investment structure frequently in use in Australia. The system permits entities to come together and contribute money in exchange for an interest in the scheme. The money is pooled together and a “responsible entity” operates the scheme independently. MISs must be registered. A managed investment trust (MIT) is a form of managed investment scheme with the investors constituting interest-holders in a trust, with the responsible entity being the trustee of the trust. This article in two parts deals with this special form of trust and recent tax law developments affecting it.
Trusts - Managed investment trusts and beneficiaries
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Our companion article Introduction to managed investment trusts set out the definition of a managed investment trust (MIT) and the special tax treatments available. This article will deal with a specific issue that the ATO recently dealt with regarding the withholding tax concessions and whether a particular investor was an MIT’s beneficiary.
Trusts - Taxation of distributions other than net trust income
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Ordinarily amounts that a trust distributes to its beneficiaries will come from the net income of the trust. However, sometimes amounts will be distributed which did not form part of the trust’s income. This article deals with how the ATO treats such amounts.
Tax Law - CGT and Death(Part 2) – Inherited dwelling exemption
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The CGT regime was introduced in 1985 to ensure that capital amounts, which were formerly largely exempt from income tax, would be brought within the income tax regime. As a general rule, net capital gains from the happening of CGT events to CGT assets of a taxpayer on or after 20 September 1985 are included in the taxpayer’s assessable income.
However, there are a number of exemptions for the CGT where a taxpayer may be entitled to either full or partial exemption. This part of the article, and Part 3, deal with the special CGT exemption for inherited dwellings.
Tax Law - CGT calculation (Part 1) - Capital gains and the general discount
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The CGT regime, brought in in 1985, was intended to bring capital amounts, which otherwise be exempt from income tax, into the taxpayer’s assessable income.
Tax Law - CGT calculation (Part 3) - Indexation
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
There are three permitted methods for calculating CGT; the standard method, the general discount method and the indexation method. The taxpayer can only use one of these methods. The previous two parts of this article dealt with the standard and general discount methods. This part will deal with the indexation method.
Tax Law - Cost base (Part 2) - Costs of ownership
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A capital gain exists where the capital proceeds attributable to a capital event exceed the cost base of the relevant CGT asset.
Tax Law - Main Residence Exemption – Part 2 of 3
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
CGT normally applies to capital gains that arise upon the disposal of land. To most individuals, the most important exemption applicable to this situation is the main residence exemption.
Tax Law - Marital breakdown rollover(Part 1)
Date: January 12, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with the CGT rollovers that apply to CGT events occurring upon the breakdown of a marriage or relationship.
Trust - Deductions and losses - Part 1 of 2
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article and its second part will deal with how allowable deductions apply to trusts. This first part will deal with the treatment of deductions and capital losses generally, while the second part will deal with the more vexed issue of the carrying forward of trust losses.
Trusts - Deductions and losses - Part 2 of 2
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article and its second part will deal with how allowable deductions apply to trusts. This first part will deal with the treatment of deductions and capital losses generally, while the second part will deal with the more vexed issue of the carrying forward of trust losses.
Trusts - Income taxation of trusts - Beneficiary liability
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A trust is a relationship between legal entities normally requiring the trustee to act on behalf of the beneficiaries. For some purposes the trust is treated as an entity; however, trusts are technically made up of multiple entities and are taxed as such.
Trusts - Income Taxation of Trusts - Trustee Liability
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A trust is a relationship between legal entities normally requiring the trustee to act on behalf of the beneficiaries. For some purposes the trust is treated as an entity; however, trusts are technically made up of multiple entities and are taxed as such.
Trusts - Specific entitlement and deed amendments
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
"Specific entitlement" is a brand new concept in trust taxation that permits streaming of net capital gains and franked dividends to beneficiaries, in proportions different from net trust income. One issue that immediately exercised the minds of many tax professionals, was whether all trust deeds in existence would henceforth have to be amended.
Trusts - Specific entitlement and delays in payment
Date: January 11, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
"Specific entitlement" is a brand new concept in trust taxation that permits streaming of net capital gains and franked dividends to beneficiaries, in proportions different from net trust income. A fundamental issue raised recently before the ATO shows that the concept is not yet fully understood or explicated.
Tax Law - Demergers - Demerger Tests
Date: January 07, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A complicated and often misunderstood area of tax law is the CGT and dividend tax relief available in respect of demergers. A demerger occurs when a group of entities (basically, companies or fixed trusts) divides itself into multiple entities or groups in a certain way.
Tax Law - Demergers - relief for interest holders of the head entity
Date: January 07, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A complicated and often misunderstood area of tax law is the CGT and dividend tax relief available in respect of demergers. A demerger occurs when a group of entities (basically, companies or fixed trusts) divides itself into multiple entities or groups in a certain way.
Tax Law - Demergers - Relief for the members of the original demerger group
Date: January 07, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A complicated and often misunderstood area of tax law is the CGT and dividend tax relief available in respect of demergers. A demerger occurs when a group of entities (basically, companies or fixed trusts) divides itself into multiple entities or groups in a certain way.
Tax Law - Demergers - What is a Demerger?
Date: January 07, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A complicated and often misunderstood area of tax law is the CGT and dividend tax relief available in respect of demergers. A demerger occurs when a group of entities (basically, companies or fixed trusts) divides itself into multiple entities or groups in a certain way.
Tax Law - Unfair preference payment claims against the ATO
Date: January 07, 2012
Author(s): Jonathan Lim B.A., LL.B. (Hons)
This article deals with a little-known form of action that may be taken against the ATO by a liquidator – namely, an unfair preference payment claim against the ATO itself.
Self Managed Superannuation Funds (SMSF) - Borrowing a New Amount to Repair an SMSF Instalment Warrant Asset
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
An issue raised before the ATO very recently is whether a self-managed superannuation fund (SMSF) is permitted to borrow a new amount to repair an instalment warrant asset it already holds. As we have discussed in previous articles, an SMSF is generally prohibited from borrowing money. However, an exception is available for limited recourse borrowing arrangements (better known as instalment warrants) in which the SMSF borrows money to pay for an asset that is held in a property trust and only transferred to the SMSF when the amount is paid off.
Self Managed Superannuation Funds (SMSF) - Can an SMSF Carry on a Business? Part 1 of 2
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
An old question relating to self-managed superannuation funds (SMSFs) is whether they are permitted to carry on a business. This is the first in our two part article on the ATO’s attitude to such activities, which is ambiguous and contains many pitfalls for the unwary.
Self Managed Superannuation Funds (SMSF) - Can an SMSF Carry on a Business? Part 2 of 2
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
In Part 1 of this article, we looked at the ATO’s general disapproval of the carrying on of businesses by self-managed superannuation funds (SMSFs). This part of the article will look at the ATO’s apparent change in attitude to this issue. However we will analyse the real effect of the ATO’s new publication and warn about how little has really changed.
Self Managed Superannuation Funds (SMSF) - In-specie Payments by an SMSF
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
It has always been accepted that a self-managed superannuation fund (SMSF) can make lump sum payments in specie. What is not so clear is what happens when a lump sum is paid as a commutation of part of a superannuation income stream. This issue, which has sometimes arisen in the past, has been brought recently before the ATO.
Self Managed Superannuation Funds (SMSF) - Partial Lease by an SMSF of an In-house Asset
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
It is well-known that an exception to the restriction on in-house assets held by a self-managed superannuation fund (SMSF) is the real property exception, under which the property is leased to a member or related entity for business purposes. One issue that has arisen recently is what happens when the in-house asset is only partially leased.
Self Managed Superannuation Funds (SMSF) - SMSFs and ESS interests
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
An employee share scheme (ESS) is a scheme under which an employer provides shares or options (ESS interests) to employees at a discount. Unfortunately, the ATO has noted many instances of employees nominating their self-managed superannuation fund (SMSF) as the acquirer of ESS interests under an ESS. While employees may generally nominate another party as the acquirer of ESS interests, nominating the SMSF gives rise to serious issues, as we shall see.
Self Managed Superannuation Funds (SMSF) - SMSFs and Tax Exemptions on Pension Assets
Date: December 02, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Once a self-managed superannuation fund begins to pay income stream benefits (ie a pension) to any of its members, it can begin to claim a tax exemption on income earned on assets it holds that are being used to produce the pension. This article deals with the nature of this exemption and the misunderstandings that sometimes arise.
Employment Law - Redundancy - Unfair Dismissal - Should Employers Offer a Lower Paid Position to Employees?
Date: November 29, 2011
Author(s): Patrick Mulligan B.A., LL.B.
The purpose of this article is to review Margolina v Jenny Craig Weight Loss Centres Pty Ltd [2011]FWA 5215. This case addressed issues of whether it would have been reasonable to redeploy the employee into a lower paying position when she was made redundant. She argued that it was not a genuine redundancy as the employer never offered her alternative employment in a lower paid position.
Self Managed Superannuation Funds (SMSF) - Excess Contributions Tax – Release Authority
Date: November 28, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
If an individual makes contributions to his or her self-managed superannuation fund (SMSF) and these contributions exceed the caps relevant to that type of contribution, then the individual may be liable to excess contributions tax (ECT).
Self Managed Superannuation Funds (SMSF) - Recording SMSF Contributions
Date: November 28, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The Commissioner of Taxation has taken advantage of two recent cases before the Administrative Appeals Tribunal (AAT) to emphasise the importance of proper record-keeping by self-managed superannuation funds (SMSFs). He also emphasized the duty tax agents have to ensure that client SMSFs are not financially disadvantaged.
Self Managed Superannuation Funds (SMSF) - SMSF Auditors
Date: November 28, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
Every self-managed superannuation fund (SMSF) is required to arrange an annual audit of its accounts, statements and compliance. Audits must be carried out by an “approved auditor”. The SMSF trustee appoints an approved auditor every year and must provide the auditor with all documents needed for the audit. All audits must be in writing and highlight any important issues that may arise.
Self Managed Superannuation Funds (SMSF) - SMSFs and Non Arm's Length Income
Date: November 28, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A self-managed superannuation fund (SMSF) is concessionally taxed at a very low rate. There is naturally a temptation in some quarters to exploit this fact by using an SMSF to help split income. However, the ATO has recently warned that the widespread abuse of an SMSF in this manner, whether the members believe it to be legal or not, is not in accordance with the law.
Self Managed Superannuation Funds (SMSF) - Winding Up an SMSF
Date: November 28, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
There comes a time in many instances when a self-managed superannuation fund (SMSF) must be wound up. Yet the Commissioner has recently warned that winding up procedures are frequently not being followed by SMSF trustees. In essence, the task of the SMSF trustee when winding up the SMSF is: to deal with all of the SMSF’s assets so that none remain; and to complete all administrative obligations.
Self Managed Superannuation Funds (SMSF) - Early Release Schemes
Date: November 25, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
For several years now, the Commissioner of Taxation has been making public his disapproval of schemes that illegally promise the early release of self-managed superannuation fund (SMSF) benefits. These types of scheme apparently have not disappeared, for the Commissioner has once more targeted them in his 2011-12 compliance program for SMSFs. Indeed, this year it would be wise for all SMSF trustees to familiarise themselves with the nature of this common and potentially disastrous form of illegal scheme.
Tax Law - Cash Economy - Data Matching - Privacy - Pursuing Tax Offenders
Date: November 24, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The government founded the Australian Taxation Office for one primary reason: to collect taxes and tax-related liabilities. The ATO has the responsibility to ensure that every taxpayer pays the correct amount of tax and excise under the law. That said, the ATO has been given power to pursue individuals and entities who are not complying with their tax-related responsibilities including those who provide false information.
Tax Law - Cash Economy Letters Program - Results
Date: November 24, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Putting a stop to businesses that operate in the cash economy could be as simple as informing them that they are indeed operating illegally. That said, the ATO has carried out a project to reduce the risk induced from businesses participating in underground economy called cash economy letters program.
Tax Law - Defining the Cash Economy
Date: November 24, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The cash economy is often referred to as “black”, “hidden”, or “underground” economy. The essence of the cash economy is when business transactions go unrecorded or unreported to the ATO. Hence, they gain an unfair advantage over other businesses which choose to comply with the requirements of the ATO by deliberately evading their tax-related obligations.
Tax Law - The Cash Economy - Detection
Date: November 24, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The ATO has pursued tax offenders, especially businesses that participate in the cash or underground economy. In 2010, the government has given the ATO an extra $445 million over the next four years in order to crackdown on the cash economy and GST(goods and services tax) compliance and is expected to gain over $3.2 billion in lost revenue over that period.
Tax Law - Cash Economy - Small Business Benchmarks
Date: November 18, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Business benchmarks allow the ATO, as well as corporate entities to compare the performance of a business to another business in the same industry. In doing so, the ATO is able to discern the different turnover ranges for businesses in an industry. That said, discrepancies from business to business will shed light on which businesses are participating in cash economy or not. As of this writing, the ATO has developed benchmarks for more than 100 industries.
Tax Law - Cash Economy - Voluntary Disclosure - Remission of Penalties and Charges
Date: November 18, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
A voluntary disclosure can involve an entity informing the ATO about a false or misleading statement they made without being prompted or persuaded to do so. It has inherent advantages, one of which is a reduction in penalties and interest. Voluntary Disclosure is an area which is really misunderstood by most tax lawyers or accountants including the role of a Prudential Auditor. Most professionals go about it the wrong way and rarely achieve a good result.
Tax Law - Companies - Company Tax Debt and Recovery
Date: November 15, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Company tax debts come into existence in a number of ways. Normally they are the function of the incapacity to pay for any of a number of reasons. In all such cases company directors assume personal liability where nothing is done to address the company’s taxation debt particularly after a director’s penalty notice has been served on them and the 21 day grace period has expired without action.
Tax Law - Debt Recovery - Freezing Assets and Mareva Injunctions
Date: November 15, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The power to freeze assets is an integral part of minimising the risk to the revenue when dealing with assets where a taxpayer attempts to frustrate the tax office recovering the amount of any tax debt. It provides the Commissioner of Taxation with a tool to prevent a debtor from evading tax-related liabilities by dealing with assets in such a way as to frustrate the execution of a judgment. Freezing assets allows the ATO to minimise this risk.
Tax Law - Debt Recovery - Overpayments
Date: November 15, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In the normal course of things taxpayers account to the tax office for tax monies to satisfy their tax related liabilities. But there are instances in which a person may receive money from the ATO which is in excess of their entitlements to a refund or otherwise. Where this occurs the monies received fall under Section 8AAZN of the TAA 1953 as an administrative overpayment.
Tax Law - Tax Debts - Restrictions on Overseas Travel
Date: November 15, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Commissioner of Taxation has the power to stop tax debtors from leaving Australia if they have unpaid tax liabilities or have not provided a suitable arrangement to address the debt by placing them on airport watch. This applies to both Australian and foreign nationals who are liable to pay taxes to the ATO unless a deportation order under the Deportation Act 1958 is issued by the Commonwealth.
Tax Law - Companies - Late Payments - Directors Penalty Notices (DPN)
Date: November 14, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
As of recent times we have been approached by a number of taxpayers who are experiencing difficulties in meeting their tax and BAS obligations. It is apparent that the ATO has a much lower threshold of tolerance where BAS obligations are not met on time they are now insisting on 50% of the outstanding balance due when a payment arrangement is being negotiated.
Tax Law - Failure to Lodge (FTL) Penalty - Exemptions and Remissions of the Failure to Lodge (FTL) Penalty
Date: November 10, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Commissioner of Taxation may remit an entity's FTL penalty on the grounds that is fair and reasonable to do so if the entity is able to show and prove how a specific event(s) have directly resulted in the taxpayers inability to lodge the documents on time. One matter which the Commissioner will take into consideration when considering to grant a remission is whether the entity has a good compliance history.
Tax Law - Failure to Lodge (FTL) Penalty - Provisions and Factors for the application of the Failure to Lodge (FTL) Penalty
Date: November 10, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Even in the fast-paced world we live in today, every person who derives income, whether through employment or business, from Australia is obliged by the ATO to comply with all of their tax-related requirements on time and in its approved form. Should a taxpayer fail to lodge tax returns, statements, notices or any other document the ATO requires from a taxpayer, then they will most likely be charged with the FTL (failure to lodge) penalty.
Tax Law - Tax Assessments - Guidelines for Disputing a Tax Debt
Date: November 10, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
A taxpayer can prepare the objection themselves or have it prepared by an authorised person on their behalf (e.g. tax lawyer or tax agent provided that they have been given written authority (a signed declaration by the taxpayer certifying the details and documents provided are true) to do so.
Tax Law - Tax Assessments - Lodging an objection
Date: November 10, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The raising of assessments by the ATO on a person or company are not absolute. There are instances where an assessment made by the ATO is unjustified. That said, taxpayers who are dissatisfied with their tax assessments and other decisions made by ATO have the right to object to some of them to ensure that any action taken to collect taxes and other tax related liabilities are in accordance with legislation.
Tax Law - Tax Debt - Disputed Debts - Legal Action
Date: November 10, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The ATO believes that the longer a tax debt remains in dispute the harder it is to recover. Disputed debt will normally increase due to the application of penalties and interest as long as the debt remains outstanding or a suitable payment arrangement has not been made by the debtor.
Tax Law - Tax Debts - Irrecoverable Debts
Date: October 24, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO can sometimes seem to have boundless energy when pursuing tax debts. However, it is important for taxpayers to be aware of the situations when even the ATO will give up the chase.
Tax Law - Tax Debts - Personal Liabilities of Directors for Company Tax Debts
Date: October 24, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
In most situations where a company has a tax debt, the Commissioner of Taxation and the ATO will respect the “corporate veil” and not touch the assets or money of the individual directors or shareholders.
Tax Law - Tax Debts - Writs and Warrants of Execution
Date: October 24, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
A writ or warrant of execution (hereafter “warrant”) is issued by a court to authorise its sheriff or bailiff to seize assets of the judgment debtor and sell it to pay the judgment debt amount.
Tax Law - General Interest Charge or GIC
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO has several means of discouraging the late payment of tax liabilities. Of these, the most basic and universally applied is the general interest charge (GIC).
Tax Law - Tax Debts - Bankruptcy and Liquidation Factors
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
In our companion articles Tax debt recovery: bankruptcy and Tax debt recovery: liquidation, we already discussed the basics of when the Commissioner will impose these harsh measures. However, an important issue for a taxpayer who is subject to these measures is what factors the Commissioner takes, or should take, into account when deciding to impose them.
Tax Law - Tax Debts - Company Arrangements in Lieu of Liquidation
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
As may be seen in our companion articles Tax debt recovery: liquidation and Tax debt recovery: bankruptcy and liquidation factors, the Commissioner of Taxation will only seek liquidation of a debtor company in extreme circumstances. This article deals with ATO policy when choosing to enter a deed of company arrangement with a debtor company, as an alternative to imposing liquidation.
Tax Law - Tax Debts - Compromise of Tax Debts
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
If the Commissioner accepts an application from a tax debtor to compromise their tax debt, then the Commonwealth will accept a payment that is lower than the full tax debt. Applying for a compromise is often the first thing a tax debtor will think of if an outstanding tax debt cannot be paid. However, as will be seen, it is not a very desirable solution.
Tax Law - Tax Debts - Indemnity Requests upon Liquidation or Bankruptcy
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
When a tax debtor is subject to bankruptcy or liquidation, either a trustee or liquidator will take over the taxpayer’s assets and undertake to pay the debts of the taxpayer as best as possible. These debts include debts to the ATO as well as other debts. The trustee or liquidator will often find itself in a situation where a certain action, such as litigation, will result in more funds being available to pay creditors.
Tax Law - Tax Debts - Liquidation
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
When the ATO and Commissioner of Taxation decide to impose measures upon a company taxpayer with a tax debt, the most extreme sanction available is that of liquidation. As can be imagined, this harsh measure is not imposed lightly.
Tax Law - Tax Debts - Paying by Installments
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
The ATO expects taxpayers to pay taxes when they fall due. Ordinarily this puts the onus on the taxpayer to ensure that their cash flow is always adequate to their tax related responsibilities.
Tax Law - Tax Debts - The ATO can Bankrupt you
Date: October 19, 2011
Author(s): Jonathan Lim B.A., LL.B. (Hons)
There are many ways in which the ATO and the Commissioner of Taxation can impose sanctions upon individual taxpayers who are late in paying tax liabilities. Of these, the most severe sanction is that of bankruptcy under the Bankruptcy Act 1966 (Cth).
Tax Law - Trusts - Misconceptions
Date: October 19, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Tax Law - Trusts - Resettlement
Date: October 19, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Trusts are being utilised more and more by a wide range of businesses and individuals in our community. Listed unit trusts are being extensively used for either the development and/or acquisition of various property interests. Their popularity continues to grow because accountants promote them as the most effective taxation and asset protection structure currently available in Australia as well as producing substantial fees for them.
Tax Law - Tax Debts - Installment Arrangements
Date: October 17, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Unfortunately there are circumstances that arise which impede a taxpayer’s ability to pay taxes. It could be said that in tough times like the present this is one of those times. As the saying goes “the only things that are certain in life are death and taxes”. Where finances are short there are some options which need to be considered.
Tax Law - Tax Debts - The role of the ATO in Recovering Tax Debts
Date: October 17, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Tax revenue is the biggest revenue stream for most countries. It is what funds roads, highways and bridges for trade and travel, it funds schools, hospitals and other institutions in service of the public; it is what finances the majority of the arenas, courts, stadiums or recreational centres; it makes relief efforts possible and delivers relief to those stricken by disaster.
Tax Law - Tax Debts - The value of security
Date: October 17, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Security is the most effective way for an entity to prove to the ATO that the taxpayer has the financial capacity to pay the debt owed. The existence of securities allows the ATO to hold the debtor’s asset to effectively recover the debt.
Tax Law - Debt Recovery
Date: October 12, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over the last several months there has been a significant increase in the number of taxpayers who have approached us with respect to either actual or threatened debt recovery proceedings from the ATO. In a number of these cases the ATO is threatening to make taxpayers bankrupt or wind up their companies where they have been tax non-compliant over a period of time.
Tax Law - The ATO and Debt Recovery
Date: October 12, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The current economic environment has meant that there are a number of people and/or businesses who are suffering financially. There is much commentary about the existence of a two-speed economy in Australia as we saw with GFC 1 and now with GFC 2. There will be an increase in the number of taxpayers whether company or individual who will be unable to meet their ongoing obligations.
Tax Law - Trusts - Bamfords Case - Part 2
Date: August 15, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
It is well-settled proposition in trust law that trust deeds can define what income is, provided there is an adequate definition of income and the trustee has the discretion to determine what is or is not income allowing the trustee to include in income what might otherwise not be income, such as capital gains in Bamford.
Tax Law - Trusts - Bamfords Case - Part 1
Date: August 08, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Bamford’s case has settled how the definition of “income” in trust deeds is to be construed. Prior to this case there was a raging controversy as to whether the proportional or quantum approach was to be applied.
Tax Law - Foreign Exchange Losses (Forex Losses)
Date: August 05, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In all taxation matters where clients have funds deposited overseas with a foreign bank account there can be issues where there are foreign exchange gains or losses. Many taxpayers who hold offshore funds need to be careful about how they manage these funds as foreign exchange gains and losses may or may not be deductible.
Tax Law - Money Laundering
Date: August 05, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Money laundering is considered by all organs of the government to be hard-core criminal activity which must be rigidly controlled. It is regulated under the Anti-Money Laundering & Counter Terrorism Financing Act 2006 (Cwlth) (AMLF) which became effective in December 2006 and criminalised under others. The Cwlth Government wishes to ensure that businesses and/or individuals do not engage in money laundering.
Tax Law - Legal Professional Privilege - Protection For Clients
Date: April 11, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
The legal professional privilege attaches to communications for the purpose of giving and receiving legal advice or for use in existing or anticipating litigation. It is will accepted that if a person prepares and then make a documentary communication to a legal advisor for the dominant purpose of obtaining legal advice, that documentary communication attracts legal professional privilege.
Tax Law - The Reach of Legal Professional Privilege
Date: April 11, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
These propositions make it clear that any document being prepared with a view in order to obtain legal advice or to aid in the conduct of litigation even if it is only an aide-memoire has privilege attached to it from the time of creation.
Tax Law - Anti-Avoidance Rules - Income Tax, GST, FBT
Date: March 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
There are a number of anti-avoidance provisions in the Tax Acts, their purpose being to nullify schemes or arrangements which are damaging the revenue. Whenever any such schemes or scams are identified by the Tax Office they not only look at their legal advisers but at all promoters, professionals and participants.
Tax Law - Fringe Benefit Tax (FBT) - Exemptions
Date: March 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Fringe Benefits Tax is not normally an area which is referred to tax lawyers except where there has been fringe benefits tax non-compliance. Section 67 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) provides the Tax Office with broad anti-avoidance powers which are similar to those that operate under Part IVA of the ITAA 1936 for income tax purposes.
Tax Law - Fringe Benefits Tax (FBT) - Exempt Motor Vehicles
Date: March 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Tax Law - Income Tax - Part IVA ITAA 1936 - General Anti-Avoidance Rules
Date: March 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Part IVA is extremely dangerous as it has far reaching consequences and could potentially cover anything or everything done by the taxpayer(s) or their advisers. It was devised to address arrangements devised for the sole or dominant purpose of obtaining a tax benefit. Although a number of commentators construe this differently we consider “dominant” to mean “principal” but this is subject to some exceptions. Part IVA is provision of last resort and only applies where the taxpayer’s claim is otherwise allowable.
Tax Law - Objections
Date: March 27, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Normally where a taxpayer does not agree with an assessment, determination, notice, position paper or decision they may object, but this is not always available e.g. as in the case of GIC. A person’s right to lodge an objection is to be found in Part IVC of the Taxation Administration Act 1953(TAA53). Basically, an objection should focus on the subject matter of concern to the ATO disputing that part of it relating to the exercise of the Commissioner’s discretion.
Tax Law - Be wary of what you affirm in your Tax Objection to the Commissioner
Date: March 25, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
This is the first reported case where the Commissioner has successfully prosecuted a taxpayer for making a false statement. The reality of the matter is, not only does the taxpayer still have to pay the tax owing to the Commissioner; he has a criminal conviction and was sent to jail.
Tax Law - The Commissioner of Taxation will reinstate companies to recover tax debts
Date: March 25, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
The Federal Court, finding for the Commissioner, held that the taxpayer should be reinstated. It held that there would be no injustice or prejudice caused by the reinstatement, whereas, injustice might be occasioned if there was not reinstatement.
Trusts - Special Disability Trusts
Date: March 08, 2011
If you have children, relatives or friends who suffer from a disability it is possible to set up a trust (either in your will or during your lifetime). These types of trusts are known as "Special Disability Trusts".
Taxation Law - Resident or Non-Resident for Taxation Purposes
Date: March 07, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Scott Gray LPAB, Grad. Dip. Legal Practice
Australian residents must declare all ordinary and statutory income no matter where in the world it is derived while non residents are only assessed on Australian sourced income.
Estate Planning, Asset Protection and Taxation Law - An Overview of Testamentary Trusts - Part 1
Date: March 02, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
A testamentary trust is a trust created in a will. There are four parties involved in a testamentary trust...
Estate Planning, Asset Protection and Taxation Law - An Overview of Testamentary Trusts - Part 2
Date: March 02, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
A well drafted testamentary trust can also provide an opening for beneficiaries to minimize Capital Gains Tax which arises from the sale of your assets. Capital Gains Tax is not triggered when an asset belonging to you passes via your Will to your executor or the trustee of a testamentary trust. There is no Capital Gains Tax when your assets are transferred from the trustee of a testamentary trust to a beneficiary...
Taxation Law - Trusts - Types of Trusts
Date: March 01, 2011
Accountants and lawyers will tout the benefits of having a trust, but there is often confusion about the kind of trusts that the client would obtain the most benefit from. Advisors should understand the client’s personal situation before recommending any type of trust structure. This article will review some of the most common trusts that are available and the benefits of each of these different trust structures will be discussed.
Taxation Law - South African Voluntary Disclosure Program - Part 1
Date: February 22, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
On 17 February 2011 the South African Minister for Finance indicated that legislation would be introduced to allow a Voluntary Disclosure Program (VDP) covering the period November 2010 to October 2011. As with all voluntary disclosure programs the aim is to encourage applicants to disclose their tax non-compliance and be given the opportunity to become fully compliant taxpayers (Tax VDP) whilst at the same time regularising any contraventions of the Exchange Control Regulations 1961 (Excon VDP).
Taxation Law - South African Voluntary Disclosure Program - Part 2
Date: February 22, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The South African authorities have produced a guide to assist applicants. As you have seen from the previous article the word applicant is to be construed very widely and includes all classes of entities to be found in South Africa. It catches all taxes of whatever type and catches all types of breaches of the South African Exchange Controls in some cases catching advisers.
Taxation Law - South African Voluntary Disclosure Program - Part 3
Date: February 21, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Any entity recognized under South African law may apply to Finserv (VDP Division) for relief under the current Excon VDP for contraventions of the regulations prior to 28 February 2010 including South African residents who illegally took funds offshore which they either hold on a direct or indirect basis in any of a number of structures. By doing so successful applicants may regularise their exchange control affairs with respect to all unauthorized foreign assets disclosed in their application with no further action being taken against them.
Taxation Law - An Introduction to the Taxation of Trusts
Date: February 20, 2011
Author(s): Scott Gray LPAB, Grad. Dip. Legal Practice
While the declaration of a trust does not create a separate legal entity, common law does recognise the consequent fiduciary obligations imposed upon the trustee. Among those is the obligation to exercise control in accordance with the terms of the trust. It follows then that the trust, although not a separate legal entity, will be notionally treated as if it were for the purpose of determining the net income of the trust estate.
Taxation Law - Onshore and Offshore Voluntary Disclosure - Going it Alone - Traps and Pitfalls
Date: February 11, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
LAC Lawyers is one of the leaders in onshore and offshore voluntary disclosure. Currently initiatives have been announced in both South Africa and the USA offering reduced penalties and interest where a person comes forward for specified periods including the full extent of their tax non-compliance. In many cases taxpayers are prompted to prepare their own voluntary disclosure in order to save on professional fees.
Taxation Law - Cash Sales - New Benchmarks
Date: February 09, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The ATO is becoming more and more concerned about the level of tax non-compliance in the cash economy and for this reason they have focused on cash sales and developed new benchmarks. This is particularly a problem with small business as major enterprises dealing with cash such as retailers, have proper systems in place to ensure monies received are properly dealt with and the correct amount of tax in all but a few cases is properly returned to the revenue.
Taxation Law - Tax Information Exchange Agreements - Part 1
Date: February 08, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Recently at both a national and international level there has been increasing attention given to the issue of tax evasion and the use of tax havens. In a foreword to an ATO booklet titled “Tax Havens and Administration”[1] released by the ATO, the Commissioner of Taxation Michael D’Ascenzo commented that the use of tax havens.
Taxation Law - Tax Information Exchange Agreements - Part 2
Date: February 08, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Double Taxation Agreements (“DTA’s”) are bilateral agreements between two countries which prevent double taxation and fiscal evasion . DTA’s are designed to foster cooperation between international tax authorities by enforcing their respective tax laws.
Taxation Law - Tax Information Exchange Agreements - Part 3
Date: February 08, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
With the increased attention being given by the ATO and other government agencies to the issue of tax evasion in tax havens taxpayers need to be aware of current developments. The ATO has indicated that as a result of project Wickenby the ATO will focus on taxpayers engaged in tax evasion and will use new approaches (including the use of promoter penalty legislation) to target offenders.
Taxation Law - Taxpayers Seeking Advice - Complex Arrangements - Contract
Date: February 04, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In the Weekend Financial Review for 22nd and 23rd January 2011 there appeared an article headed “Taxpayers face advice quandary”. The article was written by Katie Walsh and she opines “taxpayers with complex arrangements can be forced to seek legal advice following a recent Administrative Appeals Tribunal (AAT) ruling that has left even tax professionals unsure as to what circumstances would warrant calling the lawyers.
Taxation Law - Division 7A
Date: February 02, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation Law - Tax Havens, Operation Wickenby and Money Laundering
Date: February 01, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Tax Office was never naïve enough to believe that just because they offered the offshore voluntary disclosure initiative (OVDI) that everybody who is tax non-compliant would come forward cleaning up the tax system for ever. What they wanted to do was to offer concessional treatment to those who were sensible enough to come forward whilst at the same time making the micro adjustments to the system allowing them to put in place initiatives so that they could better identify those who wished to remain anonymous to better deal with them in future through their compliance activities and increased penalties and interest including the ability to refer them for criminal prosecution.
Taxation Law - Tax Havens, Operation Wickenby and the role of Professional Advisors
Date: February 01, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Even as the Offshore Voluntary Disclosure Initiative (OVDI) had been announced on 30 November 2009 the ATO continued to step up its efforts to combat tax havens. On 14 April 2010 the Tax Office announced that it had requested information from a number of banks which it would use to identify Australian taxpayers who have not disclosed offshore income or over-claimed deductions involving international transactions.
Taxation Law - The Year That was 2010 - Tax Prosecutions in the June Quarter
Date: January 31, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
More than 360 people were convicted for tax and superannuation offences during this quarter. The Commissioner indicated convictions can range from failing to lodge tax returns to serious conduct like identity and refund fraud and defrauding the Commonwealth. He said that the Tax Office extensively cross-references information reported in tax returns with information provided by third parties to identified errors or discrepancies and last year they matched over 500,000 transactions.
Taxation Law - The Year That was 2010 - Tax Prosecutions in the September Quarter
Date: January 31, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Seventeen offences resulted in custodial terms ranging from 8 months to 7 years during this quarter. The Tax Office is trying to demonstrate that where taxpayers cheat the tax system the risk is not worth it.
Taxation Law - The Year That was 2010 - A harsher tax compliance regime
Date: January 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
the taxation system is now committed to a complete about-face, its primary purpose being to detect and collect revenue from all taxpayers who have either not declared or over-claimed deductions. Do not forget the obligation is imposed firmly on the taxpayer and although they may use a professional accountant to prepare their returns irrespective of the type of entity involved liability firmly rests with the taxpayer although professionals have now been placed directly under the spotlight including promoters.
Taxation Law - The Year That was 2010 - Detection and Prosecution of Tax Offences
Date: January 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Commissioner indicated that these prosecutions ranged from offences such as failing to lodge to serious fraud including GST refund fraud. He pointed out that those who have been prosecuted now have to live with a criminal conviction against their name which is not worth it. He pointed out that the ATO has a range of ways to detect people who seek to avoid their taxation and superannuation responsibilities by not lodging returns through tax evasion or criminal fraud.
Taxation Law - The Year That was 2010 - Operation Wickenby, Tax Evasion and Tax Fraud
Date: January 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
2010 was a very interesting year because it heralded a hardening of the approach taken by the ATO towards the collection of revenue on a world-wide basis. It might be remembered that with the onset of the GFC many of the initiatives that had been put in place by the ATO and other associated governmental agencies were sympathetically implemented.
Taxation Law - Garnishees - Do You Owe The Commissioner Money?
Date: January 25, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Commissioner has an armory of tools at his disposal to collect unpaid monies. In many cases he may sue for it or alternatively he can raise a notice under section 260-5 of schedule 1 of the Taxation Administration Act 1997 (TAA97) requiring an employer to pay money to the Commissioner of Taxation on behalf of the debtor named taxpayer.
Taxation Law - Money Laundering, Terrorism Financing and Tax Evasion
Date: January 13, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Money laundering is the process of attempting to legitimatise funds that are derived from any underlying activity that is illegal. Money laundering constitutes a separate criminal activity in itself in Australia and in an ever increasing number of jurisdictions throughout the world.
Taxation Law - Personal Services Business Structures
Date: January 13, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Scott Gray LPAB, Grad. Dip. Legal Practice
When an individual has derived Personal Services Income (PSI) the income will be taxed at marginal rates unless the individual is deemed to be carrying on a Personal Services Business (PSB). There are four tests to determine whether a PSB exists
Taxation Law - The Raftland Decision - Trust Losses, Trust Stripping and Shams - Part 1
Date: January 12, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Raftland Pty Ltd v Commissioner of Taxation (2007) 65 ATR 336, a case involving the "trust stripping" provisions of s 100A of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) where the taxpayer's appeal was heard and decided by the High Court of Australia on 22 May 2008. The paper will examine the signifiance of the case insofar as Australian taxpayers are concerned involving trust loss trafficking prior to the introduction of the trust loss measures.
Taxation Law - The Raftland Decision - Trust Losses, Trust Stripping and Shams - Part 2
Date: January 12, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
In unanimously dismissing the taxpayer's appeal, the High Court found that on the evidence (both documentary and other evidence), the entitlement of the E&M Unit Trust was never intended to have any substantive legal effect. It also found that the trust income in question had in fact been applied for the benefit of the brothers and their interests.
Taxation Law - The Raftland Decision - Trust Losses, Trust Stripping and Shams - Part 3
Date: January 12, 2011
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
If transactions and or arrangements are struck down as "shams" it will have ruthless tax and criminal consequences to taxpayers in Australia. The decision of the High Court has opended up and has given the Australian Taxation Office a signifiacant drive to push and strike down a wide range of transactions as "shams".
Testamentary Trusts - Excepted Assessible Income or Excepted Trust Income
Date: January 12, 2011
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Another exception to the general rule introduced by Division 6AA is whether the income is "excepted assessable income" or "excepted trust income." In other words, not all income is affected by the new rules in division 6AA. Excepted accessible income or excepted trust income will be assessed at ordinary marginal tax rates.
Testamentary Trusts - Taxation of Testamentary Trusts
Date: January 12, 2011
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Trustees will need to pay particular attention to section 102AG(2)(a)(i) of ITTA 1936. This section controls income distributed to minors from testamentary trusts. Trustees should insure that the will incorporating the testamentary trust is properly drafted so that the testamentary trust has the characteristics of the discretionary trust structure.
Testamentary Trusts - What Happens When A Beneficiary Is A Minor
Date: January 12, 2011
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Testamentary trusts are an effective vehicle for splitting business income. Problems arise, however if there are beneficiaries who are minors (i.e. under 18 years old).
Taxation Law - Personal Services Income (PSI)
Date: January 07, 2011
Author(s): Scott Gray LPAB, Grad. Dip. Legal Practice
Personal services income (PSI) operates to deny deductions from a contractor that would otherwise not be allowable to an employee performing substantially similar work. This occurs by taxing individual contractors the same way as employees in circumstances where the income received by the contractor is for the person’s skills, expertise or personal service. These rules will also operate to affect interposed entities such as companies, trusts and partnerships.
Business and Commercial Law - Partnerships - The traps and pitfalls
Date: January 07, 2011
Author(s): Scott Gray LPAB, Grad. Dip. Legal Practice
There are no strict legal requirements for the forming of a partnership other than when two or more persons carry on a business in common for profit, however given that this is a legal relationship it is advisable to create a written partnership agreement so that the terms of the relationship are clarified between the partners.
Taxation Law - Double Taxation Agreements (DTA)
Date: January 06, 2011
Author(s): LAC Lawyers
A double taxation agreement (DTA) is a bilateral tax treaty designed to eliminate conflict where income or gains might be subject to tax in more than one country. In particular, where relief is required to be granted from the simultaneous application of domestic tax laws in two countries, where it results in double taxation of the taxpayer.
Taxation Law - The impact of TR 2010/3 on your business group - Re-characterisation of unpaid present earnings - Loans - Structuring
Date: January 06, 2011
Author(s): LAC Lawyers
On 2 June 2010, the Commissioner of Taxation's views on the status of unpaid present entitlements (UPE) that are held by a private company and subsist along with the funds of an associated trust in the hands of a trustee was confirmed.
Testamentary Trusts - Income Tax and Asset Protection Advantages
Date: January 06, 2011
Author(s): LAC Lawyers
A testamentary trust is a trust that is established under a will. Accordingly, a testamentary trust only comes into operation after the death of the will-maker and upon the testator of the will transferring the assets of the will-maker into the trust.
Employment Law - Restraint of Trade - Cascading Clauses
Date: December 20, 2010
Author(s): LAC Lawyers
Restraint of trade has garnered an ever increasing amount of attention over the past few years as employers attempt to restrain former employees in their conduct after they leave their employ.
Taxation Law - International Taxation - Offshore Banks
Date: November 23, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
2010 has proved to be an interesting year for the taxation team at LAC Lawyers as we have experienced significant growth in our taxation practice.
Insolvency and Bankruptcy Law - The Effect of Being Made a Bankrupt
Date: October 08, 2010
Author(s): LAC Lawyers
The Starting proposition is that upon bankruptcy, the asset owned by the Bankrupt vest in the Trustee in Bankruptcy. A pool of assets is then created for the benefit of the bankrupt’s creditors.
Debt Recovery - I Am Owed Money, What Can I Do? - Part 1
Date: October 07, 2010
Author(s): Scott Gray LPAB, Grad. Dip. Legal Practice
If money makes the world go around, why do we allow ourselves to come to a screeching halt because we are owed money but chose not to pursue it? Let’s face it; it’s your money so let’s not give it away because it seems too hard or expensive to recover. We are all too aware of the rising costs of living and the increasing pressure to maintain cash flow in the home or office so it’s no real surprise that there is also a rise in debtors who refuse to pay what they genuinely owe. The good news is that we can have you back in the fast lane and in control of your own financial affairs sooner than you think.
Insolvent Trading
Date: September 22, 2010
Author(s): LAC Lawyers
Insolvent trading occurs when a company incurs a debt when it is unable to pay its debts as and when they fall due. LAC Lawyers' Bankruptcy & Insolvency team offer expertise in all aspects of Bankruptcy & Insolvency Law. Get instant results - call LAC Lawyers today on 1300 799 888 .
Taxation Law - Tax Fraud
Date: September 14, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Butterworths Australian Legal Dictionary defines fraud as "an intentional dishonest act or omission done with the intention of deceiving". Obtaining a benefit by deception is to obtain an advantage or a profit or a gain by deceit. LAC Lawyer's Taxation team offer expertise in all aspects of Business & Commercial Law. Call LAC Lawyers today on 1300 799 888.
Taxation Law - Tax Audits, Notices of Assessment and Tax Disputes
Date: August 30, 2010
Author(s): LAC Lawyers
The Australian Taxation Office is empowered to conduct an investigation into the taxation affairs of any Australian taxpayer and in certain circumstances, at any time the Commissioner of Taxation sees fit.
Taxation Law - The Australian Taxation Office and Directors Penalty Notice
Date: August 24, 2010
Author(s): LAC Lawyers
It is often the case that when trying to capture a good business opportunity, directors get caught up personally. This can happen not only on an emotive level through their desire to see the business succeed, but also by way of the provision of a personal guarantee which is often necessary to ‘close the deal’ such as for example when seeking to obtain finance or re-finance for the business or commercial leases of premises.
Taxation Law - Investment Schemes and Tax Avoidance
Date: August 19, 2010
Author(s): LAC Lawyers
An investment scheme is often aimed at postponing the tax liability on the relevant underlying asset/s. Ultimately however, it most circumstances, some tax will be payable. Such schemes generally operate based on two fundamental premises, investing to reduce tax exposure or borrowing money to reduce tax exposure.
Taxation Law - Tax Havens and Information Sharing Agreements - Project Wickenby
Date: August 18, 2010
Author(s): LAC Lawyers
It is commonly known that there are many legal and legitimate transactions that Australian residents participate in which are located in offshore tax havens. Such transactions and arrangements are designed to take advantage of the tax benefits available in the relevant offshore jurisdictions.
Taxation Law - Voluntary Disclosure (OVDI) - Named or Un-Named (1)
Date: August 06, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over the last few months but more recently we have been preparing a lot of OVDI applications for submission to the ATO. What strikes us as odd is that quite a number of taxpayers have consulted professionals other than tax lawyers.
Taxation Law - Voluntary Disclosure (OVDI) - Named or Un-Named (2)
Date: August 06, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
When the overseas voluntary disclosure or initiative was originally announced and the forms which were available on the ATO website were produced they asked for more comprehensive material than those produced in April and following.
Taxation Law - The Background to Taxation Information Exchange.
Date: August 05, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
With the increased fiscal leakage caused by tax evasion the OECD and countries in the European Union have raised concerns as to how the issue should be addressed.
Taxation Law - The Brussels Agreement - The Direct Involvement of the CIA in Banking and Revenue Matters
Date: August 05, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
The Brussels agreement which was formalised in late 2009 is an important development to overcome the issue of banking secrecy in the European Union. It is an agreement between EU countries and the USA which provides the CIA with powers to access bank accounts held by individuals in the European Union.
Taxation Law - The Future - The Loss of Privacy and Confidentiality
Date: August 05, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Taxation Law - The Gathering Pace and Scope of Taxation Information Exchange
Date: August 05, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
The importance of effective tax information exchange and effective transparency between countries is vital to a country’s well being and integrity of its tax system with inter country transactions.
The Mechanisms of Tax Information Exchange Between Different Jurisdictions
Date: August 04, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
A Tax Information Exchange Agreement is a formal agreement between countries that formalizes the ability of relevant government agencies to exchange information between them concerning the tax affairs of individual taxpayers or other entities.
The Purpose of Tax Information Exchange Agreements and Factors that Determine the Issues of Confidentiality
Date: August 04, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Taxation Law - ATO and ASIC Crackdown On Phoenix Activity
Date: August 02, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
On 1 July 2010, amendments to tax and corporations laws gave the ATO new powers against fraudulent Phoenix activity.
Taxation Law - Phoenix Activity - Further Changes in the Pipeline
Date: August 02, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The Rudd/Gillard Federal Governments are also considering giving to the ATO and to ASIC a number of additional powers against directors involved in fraudulent Phoenix activity including the following powers
Taxation Law - Taxation of Overseas Based Employees Within Australia
Date: May 17, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
From 1st July 2009, the foreign employment income of most Australians working overseas is no longer exempt from Australian income tax.
Taxation Law - Offshore Voluntary Disclosure Initiative (OVDI) - A Question of Choice
Date: May 04, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
There is now a choice offered to taxpayers who make a voluntary disclosure prior to the 30th of June 2010. The Commissioner states in his Offshore Voluntary Disclosure Initiative...
Taxation Law - Offshore Voluntary Disclosure Initiative (OVDI) - The Current Status of the ATO Concerning Tax Evasion and Tax Avoidance
Date: May 04, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
From a government perspective, there is some concern that proceeds of crime have become associated with fraud, tax evasion and other criminal activity. For example, in 2005-06, the ATO’s Serious Non-Compliance Department achieved the following...
Taxation Law - Offshore Voluntary Disclosure Initiative (OVDI)
Date: April 27, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary), Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
In recent months and especially with Project Wickenby there has been increasing attention in the press to the issue of tax evasion especially in relation to overseas transactions which are located in tax havens. In this respect many taxpayers may be under the belief that if there is offshore income there is little need to disclose it to the tax authorities as there is little possibility that the Tax office will be able to determine the nature of it.
Taxation Law - Global Transparency: High Net Wealth Individuals, Tax Information Exchange Agreements and Multinationals: Country by Country Reporting - Part 1
Date: January 18, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Recent attention by the media and statements by the Australian Tax Office (“ATO”) concerning Project Wickenby has raised questions of the scope of tax avoidance by taxpayers who use offshore tax havens
Taxation Law - Global Transparency: High Net Wealth Individuals, Tax Information Exchange Agreements and Multinationals: Country by Country Reporting - Part 3
Date: January 18, 2010
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
According to a briefing paper from the Tax Justice Network and to the UK Tax Minister country by country reporting means that Multinational Companies (“MNC”) report in its accounts without exception
Taxation Law - The Purpose of Tax Information Exchange Agreements (TIEA's) and the Current Status of Proposals for Australia on TIEA's - Part 1
Date: December 11, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
In any attempt to reduce the impact of tax havens and discover any questionable cross border transactions, the role of TIEA’S is important. The exchange of information between jurisdictions serves three purposes for tax administrators
Taxation Law - The Purpose of Tax Information Exchange Agreements (TIEA's) and the Current Status of Proposals for Australia on TIEA's - Part 2
Date: December 11, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
From a practical point of view, there is some concern that proceeds of crime have become associated with fraud, tax evasion and other criminal activity .As a result Commonwealth legislation has been introduced to address this issue whereby proceeds arising from criminal offences against Commonwealth laws may be forfeited.
Taxation Law - The Purpose of Tax Information Exchange Agreements (TIEA's) and the Current Status of Proposals for Australia on TIEA's - Part 3
Date: December 11, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
While there has been considerable attention given to the issue of tax evasion there are a number of important issues that taxpayers and their advisers should consider given the formalisation of TIEA’s by Australian authorities with overseas countries and in particular some recognised tax havens
Taxation Law - An International Perspective; Examples of Abusive Tax Scheme Investigations in the USA - Fiscal Year 2009 - Part 1
Date: November 23, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Taxation Law - An International Perspective; Examples of Abusive Tax Scheme Investigations in the USA - Fiscal Year 2009 - Part 2
Date: November 23, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Taxation Law - An International Perspective; Examples of Abusive Tax Scheme Investigations in the USA - Fiscal Year 2009 - Part 3
Date: November 23, 2009
Author(s): Tony Anamourlis B.A., LL.B., MTaxLaw, GradDipLegPrac, SJD Candidate (La Trobe); ATIA
Intellectual Property - Trade Practices - The Law of Passing Off
Date: August 28, 2009
Author(s): LAC Lawyers
The principle behind the tort of “passing off” is that a person cannot represent their goods or services as those of another. The action for passing off protects business goodwill and reputation from wrongful appropriation.
Setting up a discretionary trust
Date: July 04, 2009
Author(s): LAC Lawyers
A trust is a relationship where a person (The Trustee) is under an obligation to hold property or assets for a benefit of a group of persons called the Beneficiaries. The relationship and terms of the Trust are contained in the Trust Deed executed by the Trustee and the Settlor.
Taxation Law - CGT and Trust Cloning Exception
Date: June 15, 2009
Author(s): LAC Lawyers, Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In 1990, Section 160M(1a) ITAA 97 was enacted to ensure that mere change of legal ownership in an asset does not constitute a change of ownership of the asset for the purpose of Part IIIA of the ITAA 97. Consequently neither the transfer of an asset nor the change of the Trustee of a trust would be deemed to be a disposal under Part IIIA ITAA and therefore not subject to the payment of CGT.
Taxation Law - CGT and Trust Cloning
Date: June 10, 2009
Author(s): LAC Lawyers, Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
A Discretionary trust is one of the most sought after trust structures in view of the enormous benefit that follows from the establishment of such a trust. The Discretionary Trust structure creates a framework for family assets to be passed from one generation to another without losing control over key assets, allows for the protection of assets from creditors, creates an effective tax structure and in particular allows access to Capital Gains Tax (CGT) concessions.
Taxation Law - Liquidation of Entities - Tax Consequences
Date: June 10, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
For a number of years now both ASIC and the ATO have been clamping down on arrangements which lead to the liquidation of entities, particularly companies which continue to avoid their liabilities including the payment of tax.
Consumer Protection - Contract Review Act
Date: May 21, 2009
Author(s): LAC Lawyers
Often times consumers enter into contracts where the terms are not negotiable and are expected to just sign the bottom of the page and be on their merry way. Some of these contracts include mobile phone contracts, car hire contracts, pay television contracts, finance agreements, and even those little car parking tickets issued by the machines when you go into a shopping centre or car parking station.
Taxation Law - Consequences of Directors Penalty Notices
Date: April 16, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Where there has been a failure to abide by Section 222AOE by the end of the 14 day period the ATO is at liberty to recover the amount of outstanding tax from each and every director on a joint and several basis.
Taxation Law - Directors' Liability for Tax
Date: April 08, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over recent years the Tax Office is exercising less forbearance with respect to the recovery of outstanding tax irrespective of the category involved. Normally tax is not paid by a taxpayer where the entity involved is under financial pressure which affects its overall profitability.
Taxation Law - Taxation Disputes - Resolution
Date: March 09, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation disputes arise for either legitimate or illegitimate reasons.
Taxation Law - Taxation Disputes - Concealment
Date: March 08, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
may feel confronted and try to characterise or manufacture a situation which will support circumstances which will disguise their tax non-compliance were this not done. They conspire to contrive a situation where their affairs including their financial accounts will pass muster on cursory examination.
Taxation Law - Wickenby Legal Professional Privilege
Date: January 22, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Ever since 2004 we have consistently heard of Project and Operation Wickenby. The first is headed up by the ATO and the second by the Australian Crime Commission (ACC). The first is looking at the civil consequences of tax avoidance or tax evasion or tax fraud or money laundering and the second from a criminal law perspective. Project Wickenby comprises a multi-agency taskforce focused on the activities of Strachans SA of Geneva, a company providing specialist company and trust administration services together with international tax and financial consultancy.
Taxation Law - Taxation Disputes - Default Assessments
Date: January 20, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation disputes can arise for many reasons. Often they occur where no return has been furnished or the Commissioner is not satisfied with the return furnished or has reason to believe the person who has not furnished the return has derived taxable income. In these circumstances he is entitled to make an assessment under section 167 of the amount on which, in his judgement income tax has to be paid for the purposes of section 166 of the Act.
Taxation Law - Enforcement
Date: January 14, 2009
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
A lot has been said over recent years about the ATO’s commitment to various initiatives it has put in place. It should be remembered that for high profile risks the ATO established in July 2003 the Serious Non-Compliance (SNC) Business Line which deals with people who set out to deliberately evade their taxation obligations and/or fraudulently abuse the system to obtain an improper benefit.
Taxation Law - Taxation Disputes
Date: December 03, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over recent years there has been an alarming increase in taxation disputes involving all types of tax non-compliance. Where tax non-compliance is involved it can be managed as follows:
Taxation Law - Some Traps and Pitfalls with Taxation Interviews
Date: October 23, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation Law - Money Laundering
Date: August 14, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Money laundering was intended to catch large scale drug dealers, operators of crime syndicates and persons associated with these enterprises. Conveniently for the authorities it also has relevance to the area of tax crime including identity theft. Fraud or tax evasion has never had the reach the authorities want. Under the Crimes Act 1914 fraud was punishable for up to 20 years but under the Commonwealth Criminal Code 1995 it was dropped to 10 years as in the case of deception offences.
Taxation Law - Hoges v The Taxman - Taxation Considerations
Date: August 05, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation Law - How to Approach The ATO When Making A Voluntary Disclosure Or Responding To An Audit
Date: August 04, 2008
Author(s): Alexandra Egan B.Ec, LL.B.
Whether you are responding to an audit or making a Voluntary Disclosure to the Australian Taxation Office about your Taxation Affairs it is of extreme importance to bear in mind that the only approach to be taken is one that involves contrition and reparation, that is a capacity to pay back any outstanding primary tax, penalties and interest.
Taxation Law - Overseas Dealings
Date: March 13, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Often clients want to use their accountant to lend legitimacy to their taxation affairs and to deny any knowledge of overseas dealings, interests or assets as they say their adviser filled out their return and answered questions about overseas interests, assets and holdings as "No". From that point on they have lost credibility.
Taxation Law - Promoters
Date: March 13, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Although promoters are the Tax Office's principal targets they are after any taxpayer who has used offshore bank accounts, credit and debit cards, offshore financial products and/or structures to conceal income or assets from them.
Taxation Law - Tax Havens
Date: March 13, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Tax havens enable tax evaders to conceal their assets and income offshore from scrutiny. They are readily identifiable from their lack of transparency and effective information exchange. Secrecy means that tax administrations operate on the basis that the taxpayer proves the bona fides of any arrangement/ scheme.
Taxation Law - Offshore Funds and Structures
Date: February 20, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Often bogus/fabricated documents are relied upon by taxpayers to defend overseas interests/structures and locally claimed deductions. Why would anyone in their right mind enter into a multi million dollar contract for overseas IT consultancy, for example, in the Cook Islands, a tax haven, given that they are not known as a supplier of IT consultancy services like India.
Taxation Law - Have You Received A Letter From The Australian Tax Office
Date: February 18, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Australian Taxation office (Tax Office) is increasing its focus on Australian residents who may have undisclosed offshore income or over claimed deductions involving international transactions.
Taxation Law - Offshore Non-Complying Arrangements
Date: February 12, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation Law - Tax Havens and Non-Compliance
Date: February 11, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Over recent years the Tax office has tightened up considerably on overseas arrangements and schemes which have been used to either secrete assets or hide income. Normally the success of these arrangements relies upon concealment using any of a number of structures to prevent detection including the use of tax havens.
Taxation Law - Arrangements to Avoid Australian Tax - Could This Be You?
Date: November 18, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Whenever a taxpayer is involved in aggressive tax planning they need to ensure that they stay on the right side of the law. Essentially there is a great difference between tax avoidance and tax evasion. The first is lawful and the latter is unlawful with the consequence that can lead to criminal prosecution and a custodial sentence.
Taxation Law - Failing to Furnish Income Tax Returns - Part 1
Date: November 01, 2007
Author(s): LAC Lawyers
The failure to submit Income Tax Returns as and when required by the commissioner of taxation is an offence under section 8C(1)(a) of the Taxation Administration Act 1953.
Taxation Law - Failing to Furnish Income Tax Returns - Part 2
Date: November 01, 2007
Author(s): LAC Lawyers
Whilst it is conceded and supported that Income Tax Offences are serious matters and are far from trivial, there may be objective facts and mitigating circumstances which would warrant the non-recording of a conviction as provided for in section 19B.
Insolvent Trading and Director's Liability
Date: October 12, 2007
Author(s): LAC Lawyers
Directors may be liable, personally, under the Corporations Act, Trade Practices Act, and the OH & S Act, among other legislation. A Director may also be personally liable for non payment of taxes.
Taxation Law - Taxation Settlements
Date: September 11, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxation law and practice is a highly complex area of the law. For any number of reasons individual or corporate taxpayers may find themselves in dispute with the ATO. In order to provide some certainty as to how a taxation dispute may be dealt with the ATO follows a Code of Settlement Practice.
Taxation Law - Some Criminal Consequences of Tax Evasion
Date: September 09, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Although the majority of taxpayers abide by their obligations there are a number who don't. A range of penalties and sanctions which can be brought to bear including civil, administrative and criminal. Many people think if you don't pay your tax and ignore the problem it will go away, which couldn't be further from the truth.
Taxation Law - Major ATO Targets For 2007/2008 Tax Year
Date: September 04, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The Commissioner of Taxation has recently released his 2007/08 Compliance Programme. As with every compliance programme the emphasis shifts and this year the ATO's goals are about "being fair and professional; applying the rule of law; supporting taxpayers who want to do the right thing; and being consulted, collaborative and willing to co-design."
Taxation Law - Voluntary Disclosure
Date: August 15, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Currently the Glen Wheatley case is colouring everyone's perception of the Australian tax landscape. Obviously the decision is not understood by the press which has influenced many taxpayers' perceptions on the desirability of making a voluntary disclosure.
Taxation Law - The Glen Wheatley Case - The Value Of Coming Forward - Was It An Unprompted Voluntary Disclosure?
Date: July 31, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
For some time now the papers have been full of the Glen Wheatley case, and the following types of comments have been made by a number of commentators.
An Explanation of Some Areas of Risk for Director's
Date: June 24, 2007
Author(s): LAC Lawyers
If you (personally) breach the Act, both you and the organisation may be prosecuted. If convicted, both you and the organisation may have to pay significant penalties.
Taxation Law - Negotiation
Date: May 22, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Negotiation is an art not a science. Often clients forget this and do not really understand the process. Butterworths Australian Legal Dictionary defines negotiation as "generally, mutual discussion and arrangements of the terms of a transaction or agreement."
Taxation Law - Goods and Services Tax
Date: May 01, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
As everyone understands there are a number of Commonwealth Government taxes. The major ones are CGT, FBT, ICT, GST, LCT and PAYG (earn/withholding). At this stage this paper will only deal with GST legislation. The main piece of GST legislation is a new tax system (Goods and Services Tax Act 1999) which came into operation on 1 July 2000 and is payable only on supplies and importations made on or after that date.
Employment Contracts and Restraint of Trade Clauses
Date: April 22, 2007
Author(s): LAC Lawyers
This paper explores restraint of trade and confidentiality agreements between employers and employees. It is common for employers to have a global restraint clause to restrain departing employees from working for a competitor and that may not be sufficient.
Trade Practices Law - Key Provisions that all businesses should be aware of!!!
Date: April 22, 2007
Author(s): LAC Lawyers
Key provisions of the Trade Practices Act that a business should be aware of in order to avoid a breach of the Act.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.
Taxation Law - Tax Evasion - How Do The Criminal Courts Treat Tax Evaders
Date: October 11, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
The most serious case in this area was handed down by the New South Wales Court of Criminal Appeal in R. v Ida Ronen, Nitzen Roden and Izhar Ronen on the 19th April 2006. The message which the courts delivered in this case is that they will treat all cases of serial tax evasion as extremely serious leading to long periods of imprisonment irrespective of the taxpayer’s individual circumstances even where taxpayers have paid their penalty tax in full.
Taxation Law - Extensions of the Time for Lodging Applications for Review of the Taxation decisions at the Administrative Appeals Tribunal
Date: September 14, 2006
Author(s): LAC Lawyers
Section 29 (2) of the Administrative Appeals Tribunal Act 1975 (Cth.) states that the general rule is that an application for review of a decision made by the Deputy Commissioner of Taxation must be made to the Administrative Appeals Tribunal ("AAT") within 60 days after the day upon which the person is notified of the reviewable decision.
The Benefits of Hiring A Lawyer
Date: August 16, 2006
Author(s): LAC Lawyers
The old adage “you get what you pay for” is as true today as it has ever been.
Why stay with your lawyer
Date: August 01, 2006
Author(s): LAC Lawyers
The lawyer/client relationship is a personal one and there are many reasons which will dictate who you can and cannot work with. If you don’t like your lawyer, should you change? Ultimately, the relationship between a lawyer and client must be built on mutual trust.
Taxation Law - Appeals to the Federal Court
Date: May 25, 2006
Author(s): LAC Lawyers
Appeals to the Federal Court require a written application which sets out brief details of the objection decision and must be filed with the relevant Federal Court Registry.
Taxation Law - Taking Action (AAT & STCT)
Date: May 25, 2006
Author(s): LAC Lawyers
Taxation Law - Changes to Private Rulings
Date: May 23, 2006
Author(s): LAC Lawyers
Consumer Claims - What Are The Processes In The CTTT
Date: February 12, 2006
Author(s): LAC Lawyers
Consumer Claims - What Do I Need To Know About Them?
Date: February 12, 2006
Author(s): LAC Lawyers
The Consumer Claims Act (NSW) 1998 ("the Act") provides a cause of action, which is known as a consumer claim, to consumers together with a number of remedies. All consumer claims are based in contract, including an oral contract.