News & Tax Insights

The lenient approach to debt collection taken by the Tax Office during the Global Financial Crisis has been discarded and replaced with a new hard-line.  This follows a blowout in outstanding tax debts from 5% of revenue to 11% ($15 billion) last year.  The new approach includes the early instigation of garnishee notices and windup proceedings. During the 2011 financial year, the Tax Office instigated more than 10% of all windups (numbering over 1000).  This is double the figure for 2010. It is using a new business viability software tool to determine whether a softly-softly approach or firm action is…

Tax laws have been changed to allow Foreign Income Tax Offsets to be applied against the Medicare levy, Medicare levy surcharge and Flood levy with effect from the 2008-09 income tax year. This could be of substantial benefit for professionals that remain Australian tax residents whilst working overseas for a period of time. Previously, the Tax Office said that your foreign income tax offsets could only be applied to the income tax component and not to these levies. This caused a very unfair circumstance where people working overseas that remained Australian tax residents were required to continue to pay these levies, in…

Where the termination of employment is deemed a “Genuine Redundancy” under the tax rules, payments that the employee receives for the termination that exceed the amount that would be received after a voluntary resignation get special, reduced tax treatment. A Base Amount and a further Service Amount for each Year Of Service may be entirely tax-free!  For the 2013 income year, the base amount is $8,806 and the service amount for each year of service is $4,404.  Accordingly, and as an example, the tax-free limit for a Genuine Redundancy payment where there is ten years of service would be: $8,806…