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taxInsight - 2015/02 – February

2015/02 – February from taxInsight

Empire building still in operation

The Australian Charities and Not-for-profits Commission (ACNC) has revoked the registration of 392 charities who have not completed and lodged outstanding Annual Information Statements. Charities have always operated successfully in Australia under State law with their taxation exemption status overseen by the Tax Office.  In its wisdom, the previous Labor Government decided to establish the ACNC and require all charities to register with this federal body at the risk of having their tax exempt status revoked. Each charity is required to lodge an Annual Information Statement and to provide financial statements, together with the legal establishment documents and much additional […]

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Cutting costs and disputes about valuations

Valuations of assets and businesses are frequently needed for taxation purposes.  There might be transfers of assets between related individuals or companies, calculation of asset values to determine eligibility for small business concessions, valuations required when entering the consolidation process for wholly owned companies and so on. The Inspector General of Taxation has completed his review of the Tax Office’s administration of valuation matters and has identified inherent difficulties.  He has issued a 129 page report and made a number of recommendations to the Tax Office, most of which has been agreed to.  These attempts to prevent disputes from arising […]

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Code of settlement for tax disputes

The Tax Office has issued a Practice Statement which provides details of its code of settlement for taxation and superannuation disputes which includes disputes involving tax debt. The Tax Office will consider settling disputes because it is obliged to administer the taxation system in an efficient and effective way and use “discretion and good sense”. The following factors are considered when deciding whether or not to settle: The relative strength of the party’s position; The cost versus the benefits of continuing the dispute; and The impact on future compliance for the taxpayer and broader community. Settlement would generally not be […]

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Channel Seven takes on the Tax Office and wins

The Taxation Administration Act requires taxpayers paying royalties overseas to deduct withholding tax from those royalties. Seven Network Limited (Seven) made payments totalling $122 million to the International Olympic Committee (IOC) for the broadcasting rights to the Olympic Games. What was actually provided was the transmission by ITVR signal which, when received in Australia, were converted into the actual moving pictures. These payments were made by Seven during the period from March 2006 to August 2008.  In October 2005, Seven requested a private ruling on the matter.  Six months later, the Tax Office issued the ruling which stated that the […]

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Board of Taxation report on reducing red tape

In January, the Board of Taxation released its report on removing taxation impediments to the success and growth of small business.  This had been provided to the Government in August 2014 and the Government’s responses were attached. Those which were favoured by the Government and are in process included: Provision of guidance to applicants for an ABN as to how to show that they are intending to carry on a business and therefore eligible for an ABN. That the Tax Office review its employee contractor tool enabling business people to make the right decision. That the Tax Office should keep […]

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Fringe Benefits Tax – Airline tickets

The provision by an Airline of Airline tickets to their own or other Airline’s employees or employees of travel agents, is a fringe benefit that previously came under the unwieldy name of Airline Transport Fringe Benefits.  This came under a separate category which was eliminated from 8 May 2012.  Now such fringe benefits come under the heading of either In-house Property Benefits or In-house Residual Fringe Benefits and they are taxed under the In-house Benefit rules. Details must be included under the Property or Residual categories in the Fringe Benefits Tax Return. Taxable value is calculated by first finding the […]

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Land tax: State governments crackdown on principal place of residence exemption

A NSW couple has lost their Supreme Court case and have to pay land tax and penalties on a property that they considered their intended home for the four years from 2002 to 2006. The imposition of land tax is set out in the Land Tax Acts for each state or territory; it is a State tax, not a Commonwealth tax.  All of the states and territories have similar policies exempting your home from the tax.  However, you will pay land tax where you own a second home, holiday house, investment properly or other land. The land tax was levied […]

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