News & Tax Insights

The Productivity Commission released a draft report early in August about the current $1,000 low value threshold where GST and duty is not imposed on imported goods. Australian retailers have complained that the threshold makes for unfair competition as they have to charge GST and are suffering because consumers are no longer spending up big. The report indicates that collection cost would be three times the tax collected if the low value threshold was removed. The draft report indicates that 55 million international parcels valued under the $1,000 threshold arrive in Australia and that if the threshold was removed $578…

Personal director obligations for unpaid PAYG withholding tax will be beefed up under a draft bill released for comment. The bill also sheets home responsibility for unpaid super guarantee to company directors personally. The change was announced in the May Budget and was aimed at phoenix companies but significantly increases personal liability risk for all, including the most diligent directors. Currently, where a company has unpaid PAYG withholding liabilities the Tax Office can issue a Director’s Penalty Notice and the director has 21 days to either: + Cause the company to pay the tax; + Negotiate a payment arrangement for…

There are number of common errors in the way the self-managed super fund tax return is completed including the correct record of an instalment warrant/limited recourse borrowing arrangement for real property or securities. The Tax Office has reported common errors in the SMSF Newsletter. To overcome common errors in the superfund tax return, care should be taken to: + Record instalment warrants/limited recourse borrowing arrangements at the Derivatives and instalment warrants label and not at the real property label until the borrowing arrangement has been discharged; + Recording investments in the appropriate categories and not bundling them in the other…

The Tax Office website has set out some common mistakes that employers make to remind them of their super guarantee obligations: + Not providing the tax file number of the employee to their nominated superannuation fund within 14 days of the employer receiving it (the superfund might reject the contribution or the employee’s account in the superfund may be subject to extra tax); + Even where a contractor quotes an ABN, if the contract is wholly or principally for the contractor’s labour, the employer is still obliged to pay super guarantee; + Some employers pay insufficient super contributions for their…

The Tax Office is using data matching to catch out employers not paying fringe benefits tax for motor vehicles and living away from home allowances. The minutes of a Tax Office and industry liaison committee have been released and show Tax Office use of data matching to: • Identify excessive reductions to minimise the taxable value of living away from home allowances; • Employers that purchased high value new motor vehicles and have not registered for FBT; • The Tax Office also says it is using direct mail and phone campaigns including: + Contacting 1,000 employers whose FBT return lodgement…

Assistant Treasurer Bill Shorten has foreshadowed that legislation will be introduced to increase compulsory superannuation guarantee from 13%. He also said we will make the system fairer by ensuring no tax is paid on the 9% superannuation contributions for Australians earning up to $37,000 and that the money is instead directed into their superannuation. He argued that this Parliament must back the move from 9% to 12% to provide: • A more comfortable post work life; • Retirement incomes at 70% replacement rate of accustomed income; • Leverage the benefits of concessional tax, compound interest and dividend imputation; • For…

A package of Bills was introduced to the Federal Parliament to transfer responsibility for the registration of business names from eight state and territory Governments to ASIC. Where an individual, partnership or company operates a business using another name (apart from the legal name of the businessperson or entity) current state laws require that name to be registered in the applicable states or territories. If a business operates nationally with such a business name there may need to be up to eight separate registrations. Under the Australian Constitution the power for business name registration lies with State Governments and they…

From July 2008 the quarantining of foreign tax losses was abolished and these can be claimed against any other income.

The cash basis of taxing income can be used by most individuals. Under this method your income is not taxed until it is actually received (e.g. fees earned and invoiced in June but not received until July, are taxed in the later year). This can be beneficial for tax planning purposes as you don’t have to pay tax on the earned income until it is actually received, but you can still claim expenses incurred even though not paid.