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 - 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 - 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 - 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 - 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 - 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 Laws - 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 Laws - 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 - 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 - 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 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 - 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 - 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.
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.
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 - 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 - 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.
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) - Considerations for Motor Vehicle FBT
Date: March 28, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Taxpayers need to know the type of analysis carried out by the ATO where car fringe benefits are involved. In order to address this properly the following matters need to be considered...
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 - 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 - 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 - 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).
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 - 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.
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.
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.
Tax Evasion - Offshore Activities
Date: September 24, 2010
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
All member countries of the OECD’s forum on tax administration including Australia are working together to identify taxpayers’ bank accounts linked to Lichtenstein to counter the effects of tax evasion. LAC Lawyers' Taxation team offer expertise in all aspects of Taxation Law. 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
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.
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 - 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 - 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.
Tax Law - Vanuatu and the use of overseas tax havens
Date: May 08, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
For many years now a number of Australian taxpayers have been using overseas tax havens to shield their wealth from the Australian Taxation Office. Although there is nothing new in this it has come to greater prominence with the advent of Project Wickenby.
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.
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.
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.
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.
Taxation Law - The old adage “you get what you pay for” is as true today as it has ever been.
Date: September 11, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Currently the taxation landscape in Australia is in a state of great flux. Although legislation is constantly being updated a comprehensive review of this whole area has not been carried out. The whole area is unnecessarily complex and both the Australian Taxation Office and the courts have been left to do the best they can to provide meaningful interpretations of the law in this area.
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
Taxation Law - Private Rulings
Date: May 22, 2006
Author(s): LAC Lawyers
This article sets out the procedures to be followed by taxpayers who wish to challenge Private Rulings for taxation assessments made by the Commissioner of Taxation.