News & Tax Insights

Currently, employees of certain not-for-profits can salary sacrifice entertainment benefits.  If they do so, no FBT is payable by the employer nor does it have to be reported.  Those not-for-profits which are not exempt, but rebateable, would receive a partial FBT rebate. The 2015/16 Budget included a provision for this benefit to be substantially reduced.  From 1 April 2016, there will be a separate, single, grossed-up cap of $5,000 for salary packaged meal entertainment and entertainment facility leasing expenses provided to employees of public benevolent institutions, health promotion charities, public and not-for-profit hospitals and public ambulance services. The charges are…

You will avoid attributed personal services income and be operating a personal services business if you can satisfy the results test.  This is set out in Section 87-18 of the Income Tax Assessment Act 1997. In a recent case (Prasad Business Centres Pty Ltd v FC of T AAT (2015) AATA 411) the Administrative Appeals Tribunal confirmed the Tax Office’s decision not to provide a personal services business determination as requested. The Tribunal held that the results test was not satisfied because: The relevant contract remunerated the principal only for time he spent working on certain projects; Whilst the contract…

There was great joy, not only for small businesses but also for many retailers, from the 2015 Budget announcement of the $20,000 tax write-off.  The economy will also benefit from the increased business activity which is resulting from this much needed measure. Highlights: Any small business with an aggregate annual turnover of less than $2 million is eligible. The write-off applies to any business depreciable asset (new or second hand) acquired after 12 May 2015 until 30 June 2017. This measure replaces the previous instant asset write-off threshold of $1,000. It applies on a per-asset basis. An unlimited number of…

Deep pockets were needed but in Haritos & Anor. v FC of T (2015) ATC, the Full Federal Court struck down earlier decisions by the Federal Court and the Administrative Appeals Tribunal and brought justice to the taxpayers. It seems that in this case, Tax Office investigators ignored evidence in MYOB accounting records and decided that a significant number of payments made by a cleaning contracting company were dividends to its shareholders. This, despite the accounting records, despite the fact that a cleaning contracting business employs sub-contractors and must pay them, despite the fact that evidence was given as to…

In recent times, there have been a number of enquiries into what the OECD calls Base Erosion and Profit Shifting (BEPS).  Internationally, there is concern about multi-national companies using techniques such as arranging funding in low tax countries and charging high interest to their subsidiaries in high tax countries (called Base Erosion) or, through pricing mechanisms, arranging profits to be shifted from high tax countries to low tax countries (Profit Shifting). The OECD is examining this with a view to encouraging member countries to introduce legislation aimed at limiting the resulting adverse revenue effects but despite some years of effort,…