LATEST ARTICLES from taxInsight

Bank information shared with USA Internal Revenue Service

Under the US Foreign Account Tax Compliance Act (known as FATCA) Australian banks have provided details of over 30,000 customer accounts worth over $5 billion to the US Internal Revenue Service (IRS – the US equivalent of our Tax Office). These are accounts of US citizens and tax residents with Australian bank accounts.  There is a wave of transparency measures being implemented world-wide.  By 2017 close to 100 countries will be sharing non-resident data under the OECD Common Reporting Standard. The Australian Tax Office will receive data from the IRS about Australians with financial accounts in the US and will […]

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Australian Securities and Investments Commission – is it up to the task?

Log on to ASIC’s website – and you can obtain information about how to make a complaint or report misconduct.  This is divided into different categories, many of which must be dealt with by other organisations.  But those matters which are within its responsibilities include troubles with investments, companies which have gone into liquidation or administration, shares, insider trading and operation of companies.  It also carries regulatory responsibility for company auditors and financial planners.  It has a very broad set of responsibilities. Will your complaint or problem be dealt with expeditiously?  Probably not.  The word around the traps is that ASIC doesn’t have the manpower to […]

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Allocation of Franking Credits by Trustees

A recent Federal Court decision has made it abundantly clear that franking credits must be allocated to beneficiaries in the same proportion as the relevant dividends. The trustee of the Thomas Investment Trust had resolved to distribute the net income in proportions to an individual and a company. In a second resolution it resolved to distribute the franking credits in different proportions. The trustee then sought and obtained directions from the Supreme Court of Queensland that franking credits were to be dealt with by the trustee and could be distributed to beneficiaries in accord with those trustee resolutions. However in a later hearing the superior […]

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Can’t claim $20k loss: Share trading not a business

In a tough decision, the Tribunal has refused a $20k deduction for losses in share trading activities for a casual childcare educator in the 2011 tax year (Devi v FCT [2016 AATA 67]). In that year, the taxpayer earned $40k in childcare wages working between 25 and 30 hours per week and commenced trading shares using $60k of savings and a $40k margin loan. 71 purchases of bank, mining and smaller company shares were made to a value of $380k.  37 sales to a value of $315k were made.  Most transactions took place in the first half of the year. […]

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Netflix tax before Parliament

At the moment, internet supplies of movies, music, apps, games, eBooks, other digital products and services such as consultancy and professional services made by a foreign supplier are generally exempt from GST. In line with previous Government Budget announcements, legislation has been introduced to Parliament to apply GST to these digital supplies when they are made to an Australian consumer. Under the new law, the supplier or the digital platform, will have a limited and simplified GST registration and will remit GST on a quarterly basis but not be able to claim any input tax credits. The new law will […]

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Appeal lost: Foreign companies were tax residents of Australia

The Full Bench of the Federal Court declined an appeal by multiple foreign companies against an assessment based on them being Australian tax residents. The foreign companies included: Hua Wang Bank Berhad (offshore bank incorporated in Samoa); Bywater Investments Limited (incorporated in the Bahamas); Chemical Trustee Limited (incorporated in the UK); and Derrin Brothers Property Limited (incorporated in the UK). Documents provided in evidence indicated that all of the companies were ultimately owned and controlled by an accountant based in Sydney.  Each company made profits buying and selling ASX listed shares.  If they were non-resident and the shares were held […]

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Sale of land for $2m or more? Buyer beware (and seller)!

Foreign resident capital gains withholding payments will apply where a foreign owner sells land or land interests with a market value of $2m or more requiring the purchaser to withhold and pay 10% of the purchase price to the Tax Office.  At the time of writing, the legislation is before the Senate and expected to become law.  The new law will apply to contracts signed from July 2016. This is another step in the Government becoming tougher on capital gains for non-residents.  It follows the removal of the 50% CGT discount for non-residents from the budget night in May 2012. […]

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Extra pay day in the 2015-16 financial year?

Where you are paid weekly on a Wednesday or Thursday, you will actually have 53 pay days during the financial year ending 30 June 2016 and similarly, if you are paid fortnightly and your pay day was either Wednesday 1 July 2015 or Thursday 2 July 2015, you will have 27 pay days for this financial year.  This might cause an expected tax refund to become an amount payable! The extra pay day happens for two reasons being that the 2016 year is a leap year (29 days in February) and also when you divide the number of days in […]

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Substituted Australian accounting period

The overseas, controlling owners of an Australian company may want to apply to change the 30 June balance date for the Australian company to line up with the home country balance date.  For example, the Australian subsidiary of a UK parent company could apply to change the balance date to 31 March to assist with UK reporting requirements. There is a Tax Office form called Application for Substituted Accounting Period (SAP) NAT5087. Also, the Tax Office has published a practice statement for its staff to follow in assessing an application: PSLA 2007/21 Substitute Accounting Periods (SAPs). The application should be […]

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Do you need an APEC Business Travel Card?

The Asia-Pacific Economic Cooperation consists of 29 Asian and Pacific countries who have established cooperative arrangements to promote trade and business.  These include Australia, Brunei, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Singapore, Taipei, Thailand, Vietnam and Russia.  Canada and United States are also members. If you are the head of a business entity or the owner or director of a registered business or a nominated employee of that business, you may be eligible to apply for an APEC Business Travel Card.  If you are a senior government official, you might also […]

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Revenue Authorities focus of taxing offshore income

The Tax Office launched a voluntary disclosure program which was called “Project DO IT” (disclose offshore income today) on 27 March, 2014. Errant taxpayers had until 19 December 2014 to come forward with details of untaxed offshore income and assets. Those who did were subjected to tax going back only four years and had their penalties reduced to 10%. This was announced as a precursor to more aggressive action by the Tax Office whose efforts are being bolstered by improved information sharing arrangements with an increasing number of countries. Many countries who relied on secrecy to attract investments and trade […]

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New Significant Investor Visa available

The previous Federal Government introduced a new Significant Investor Visa which targeted migrants who could make an investment of at least $5 million in the Australian economy. This was thought to make it easier for investors coming to Australia. Under this program investors would not have to meet a points test and had reduced residency requirements. Investments could be made in State and Territory bonds, ASIC regulated managed funds and direct investments into Australian companies. During the period from inception on 24 December, 2012 and 31 March, 2015 a total of 1,679 applications under this program have been lodged and […]

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Transfer Pricing rules getting serious attention

Do you have dealings with a related overseas entity?  If so, you may have been caught up with the dreaded complexity of the Transfer Pricing (TP) rules.  This is receiving increased attention by the Tax Office and by a Senate Committee currently examining the question of whether overseas companies are paying their fair share of tax on income earned in Australia. These rules are not limited to the ‘Apples’ and ‘Googles’ of this world but, due to increasing trade globalisation, they increasingly apply to small and medium enterprises.  The OECD term for entities which may be caught up in this […]

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Taxation discussions commences

The Federal Treasurer, Mr Joe Hockey, has issued a Tax Discussion Paper which is titled Re: Think.  Mr Hockey said that the Paper begins a dialogue on how to create tax system that supports high economic growth and living standards, improves international competitiveness and adjusts for a changing economy and new opportunities.  He noted that the current tax system, having been designed before the 1950s, is not suited to the 2050s. The Discussion Paper is a 203 page document and is available on The Government is encouraging consultation and is planning to issue a Green Paper to be published […]

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