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Save Tax: GST/VAT refunds

If you purchase items while travelling overseas you may be able to claim a refund of the VAT (Value Added Tax) or GST you paid on purchase. Claims can usually be made when departing the country. This scheme is also in place in Australia and, as such, your overseas visitors may be entitled to a refund of the GST for certain goods when exiting the country. These goods must have a combined value of at least $300 and purchased within 60 days of departure.

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GST on imported goods and services

Since its introduction in July 2000, GST has been applied to imported goods over $1,000 in value but not necessarily on imported services. The Treasurer has indicated that he will introduce legislation to apply GST to intangible supplies provided by offshore companies into Australia.  These supplies could include media services and all other services which are charged by offshore companies but which benefit Australians. Mr Hockey said that these integrity measures were related to an OECD consensus – that GST should be charged at the source, so a company providing intangible services into Australia, such as media services, should charge […]

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New UK tax to hit non-UK companies and groups

Commencing from 1 April 2015, HM Revenue & Customs (the UK Tax Office, referred to as HMRC) will levy a Diverted Profits Tax (DPT).  This is intended to counteract diversion of profits from the UK.  It will be levied on companies that seek to avoid setting up a permanent establishment in the UK or that use arrangements or entities which lack economic substance. Hence: If: a non-UK company arranges for a company to carry on an activity in the UK for the supply of goods, services or other property, and doesn’t create a permanent establishment in the UK, and this […]

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Pressure on tax evasion using Switzerland

On 3 March 2015, the Treasurer announced that Australia and Switzerland had agreed to increase cooperation in order to tackle tax evasion. The Tax Office will automatically receive details of financial accounts such as investment income and balances that Australians hold in Switzerland, and use it to check against the income declared in their Australian Tax Returns.  The Swiss Federal Tax Administration will receive details of Swiss residents that hold financial accounts in Australia. This information will be on the basis of the OECDs Common Reporting Standard (CRS) and will be implemented from 2017 with the first exchange information in […]

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Do we need a ‘Google Tax’?

Recently, there has been considerable discussion about the level of taxes being paid in Australia by large overseas multinationals.  A Senate Committee is currently examining executives of companies such as Apple and Google who acknowledge very substantial revenue earnings in Australia, but stress they are fully compliant with current Australian tax law. Concern is being voiced about very high revenue earnings but low reported net profits and taxes. The Treasurer has stated that multinationals should pay tax where their income is earned.  He said that there would be more about this in the 2015 Federal Budget. Should a special tax […]

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Save Tax: Exempt benefits

FBT is not charged on a number of items which are predominantly used for business purposes. These include laptop and other portable computers, protective clothing, briefcases, calculators, tools of trade, business related software, electronic diaries and mobile phone. These benefits are not included as assessable income of the employee. Minor and infrequent benefits with a value of under $300 are also exempt. If you have a Christmas party for employees and the cost works out out at under $300 per employee it would be exempt from FBT although not tax deductible because it is in the nature of entertaining. Christmas gifts […]

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Save Tax: Childcare

Costs incurred by an employer in providing recreational facilities for employees on the employer’s business premises, or for the care of the children of employees in a childcare facility may be located on the business premises of a related company. The childcare facility does not have to be located on the employer’s ordinary business premises. The exemption will still be available where an employer provides childcare facilities in premises which it has leased or purchased specifically for that purpose.

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Save Tax: Extension of time to pay tax

It may be possible to obtain an extension of time to pay your tax where: insufficient funds are available; payment would cause financial hardship and all avenues for obtaining the funds have been exhausted. The extended date for payment will apply where financial hardship is due to: Natural disaster; prolonged periods of unemployment; the taxpayer has died and probate has not yet been determined The general interest charge on the tax outstanding will accrue on a daily basis from the original date for payment, although this would be normally be waived in case of disasters. IN genuine dispute cases, an […]

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Save Tax: Works of art

Certain gifts of art with a value of $2 or more can be deductible to individuals or companies. To qualify, the gift must be made to: The Australiana Fund Public libraries, museums or art galleries in Australia Artbank The gifts must be accepted to maintain or establish a collection. The deduction available is based on the specified written average market value obtained from approved valuers. Valuation expenses incurred are also tax-deductible.

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Save Tax: Flight rewards

Are you an employee receiving benefits from flights paid for by your employer? If the membership is your personal membership the benefits you receive will not be assessable nor will the benefits be subject to FBT.

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Save Tax: Legal expenses

Look closely at legal costs to determine whether you can claim a deduction. Costs incurred in the course of running your business, preserving the business and its good name, preparing leases, and debt collection costs are all deductible. Costs in registering patents, trade marks, designs and copyrights represent intellectual property and become depreciating assets. Legal costs incurred in buying or selling assets are not deductible but should be recorded as they form part of the cost base of the asset and can be offset against capital gains on disposal.

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Save Tax: Home office

Be aware that if you set aside an area in your home solely for work purposes and claim a proportion of rates, maintenance, insurance and interest that part of your home will cease to enjoy the CGT exemption applicable to your main residence. You will need to apportion the cost and selling price of the residence in order to determine CGT payable on sale.

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Save Tax: Seminar expenses

You can claim expenses incurred in providing food, drink, accommodation and travel that is reasonably incidental to the attendance at a seminar which lasts for at least four hours and assists you to earn assessable income. The seminar must not: Be a business meeting Have a main purpose of promoting or advertising the business or it’s goods or services or; Have a main purpose of providing entertainment. The seminar can be held in an overseas luxury hotel at a tourist oriented location.

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Save Tax: Assignment of profits

Are you receiving a share of profit from a partnership? The Court has confirmed that an interest in a partnership can be assigned directly to another person, such as a spouse, or a discretionary trust. Thus, the income from the partnership can be distributed in a tax effective manner. (FCT v Everett 80 ATC 4076). The assignment must be formally documented. Either the while or a stated percentage of the partnership interest can be assigned. It is essential that the documentation is correctly prepared by a solicitor. Not only future income, but also earnings of the partnership for the current year, […]

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Disclaimer: The information contained in this publication is for guidance only and we believe it is correct at the time of publishing. It should not be relied upon without obtaining professional advice regarding your circumstances. No responsibility for loss occasioned directly or indirectly to any person acting or refraining from acting wholly or partially upon or as a result of the material in this online publication or for any error in or omission from or external broken links within this online publication can be accepted by the publisher or any author, editor, contributor or consultant of any company referred to herein.

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