Edition 21/2008
10 June 2008
HEADLINES
- Second Commissioner’s speech on Tax Time 2008
INSTITUTE NEWS
- Standard Business Reporting Business Advisory Forum
- NTLG GST sub-committee meeting
- Commissioner's Small Business Consultative Group meeting
- Accounting Working Group meeting
- Joint submission on draft taxation ruling
CASES
- Deduction for administrative assistant allowed to the extent of seven eighths - Frisch v Commissioner of Taxation [2008] AATA 462
- Fee for purportedly managing tax affairs not deductible – apportionment methodologies rejected – Harvey v Commissioner of Taxation [2008] AATA 457
- Acquisition of artworks and antiques amounted to carrying on an enterprise - "The Taxpayer" and Commissioner of Taxation [2008] AATA 461
- Decision Impact Statement - Reliance Carpet
RULINGS
- Draft taxation ruling
- Product rulings
- ATO interpretative decisions
- Legislative determination
- Taxpayer alert
LEGISLATION
- Tax Laws Amendment (Election Commitments No. 1) Bill 2008, Income Tax (Managed Investment Trust Withholding Tax) Bill 2008, and Income Tax (Managed Investment Trust Transitional) Bill 2008 introduced
- Legislation update
- Legislative instrument
ATO PUBLICATIONS
- Recent ATO publications
OTHER NEWS
- The Commissioner warns taxpayers to take care with land trust arrangements
TRAINING AND DEVELOPMENT
YOUR INPUT
HEADLINES
1. Second Commissioner’s speech on Tax Time 2008
In a speech entitled “Fostering a ‘prevention is better than cure’ approach for Tax Time 2008”, Second Commissioner, Jennie Granger explored a number of topics that will be addressed in the Compliance Program 2008 -09. The areas that the Second Commissioner covered included:
- tax time focus for individuals and small business;
- update on the ATO’s initiative which encourage taxpayer disclosure of hidden offshore income and profits; and
- update on the ATO’s services and supports for tax agents.
In term of tax time focus for individuals, this year the ATO will be concentrating on:
- investors, particularly in relation to their rental properties, dividends and interest, sale of investments, managed investment schemes, avoiding dodgy tax schemes and saving for retirement;
- salary packages of executives and directors; and
- employees and their work expenses claims.
Ms Granger also shed some lights as to types of assistance the ATO will be providing to tax agents and taxpayers. She said that the ATO is collaborating with tax agents and is continually enhancing the tax agent portal via new releases. A new portal will be released in 2009 through the ATO’s Change Program. In addition, this year taxpayers will be able to access to a greater amount of pre-filled data for individual tax returns such as ATO-held data on the Higher Education Loan Programme, prior deductions, baby bonus information and a family tax benefit status indicator. Other assistances mentioned including tax practitioner helpline and relationship manager services.
The Second Commissioner concluded that the ATO is currently developing the Compliance Programme and will be releasing it by mid-August.
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INSTITUTE NEWS
2. Standard Business Reporting Business Advisory Forum
On Monday 2 June the Institute’s Head of Reporting, Kerry Hicks, participated in the second meeting of the Standard Business Reporting (SBR) Business Advisory Forum (BAF).
The BAF helps SBR stay in touch with the needs of Australian businesses and their intermediaries. The Forum provides input into SBR design, consultation, marketing and strategy implementation. Comprising representatives from industry groups and professional associations, the BAF sets and enhances public perceptions of the program, and communicates SBR direction and outcomes to the businesses and intermediaries they represent.
Topics discussed at the meeting included:
- the role and charter of the BAF
- timetable for SBR
- SBR activities since the last meeting
- proposed government communiqué on SBR
- feedback from workshops
- recent international SBR/ XBRL (eXtensible Business Reporting Language) initiatives including the mandatory lodgement of XBRL financial statements for all US registrants (including foreign private issuers)
- SBR messages, strategies and directions
- the process for dealing with issues raised by members of the BAF
- the need for SBR to be communicated through relevant organisations core training events
- SBR deliverables and the need for organisations and their members to be involved in workshops, authentication and user testing over the coming months.
For more information on SBR, the terms of reference for the BAF, and to register your interest with the SBR team please refer to the SBR website.
If you would like to provide direct input to the Institute’s BAF group regarding matters discussed above, or matters/issues that may emerge and that you wish to be brought to the attention of the BAF/SBR groups, or even volunteer (to be involved in workshops, user testing, etc) as an Institute’s representative, please email us at techsubmissions@charteredaccountants.com.au.
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3. NTLG GST sub-committee meeting
On Wednesday 4 June, Norman Kang of the Institute along with Stephen Baxter attended the National Tax Liaison Group (NTLG) GST Subcommittee meeting on behalf of the Institute. The key issues discussed at the meeting included:
- New residential premises and the 5 year rule in subsection 40-75(2)
- Changes in extent of creditable purpose under Division 129
- Simpler GST accounting for the food and grocery industry
- Retrospective GST registration cancellation
- Reliance Carpet Decision Impact Statement
- GST refund and debt time limits
For more details on the above issues or other topics discussed, please refer to the draft agenda which contains the ATO’s response, prior to the meeting.
The updated ATO’s response will be available once the draft minutes of the meetings are approved. They will be published on the ATO website and a link provided in the Tax Bulletin.
The next meeting will be on 2 September 2008. If members have any issues they would like to raise please email these to taxgroup@charteredaccountants.com.au.
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4. Commissioner's Small Business Consultative Group meeting
On 2 June the Commissioner's Small Business Consultative Group met and the Institute was represented by Paul Twohill from Gregory & McCarthy.
The key matters arising out of the meeting are set out below:
- The ATO website is to undergo a significant redesign. The new website should be available by Christmas.
- The ATO is now engaging debt collection firms to assist with collection of tax debt.
- The Government proposes to establish and operate a clearing house to assist small businesses with their superannuation payments. The clearing house will collect superannuation from small business employers and will remit the amount to the superannuation funds of the employees. Consultation with industry is expected to commence within the coming months.
- Salary sacrifice superannuation payments will be recorded on employee payment summaries from 1 July 2009.
- The ATO is proposing a review of the Building and Construction Industry. The ATO has issues with non-lodgement, rising tax debt and an increase in contractors performing work normally undertaken by employees. A withholding from payments to contractors may be introduced which may operate like the previous Prescribed Payments System.
The minutes of the meeting will be published on the ATO website in due course and a link provided in the Tax Bulletin.
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5. Accounting Working Group meeting
On 6 June Norman Kang from the Institute attended a meeting of the Accounting Working Group. An update on the reduction of the regulatory reporting burdens for business was provided and other items discussed at the meeting included:
- Access by bookkeepers to lodge electronically
- The removal of tax agent contact numbers when a client is removed from their client list
- Circumstances in which a company or superannuation fund client may receive a payment slip from the ATO
- Improving the ATO’s written communication with taxpayers and tax agents.
Once the draft minutes of the meeting are approved, they will be published on the ATO website and a link provided in the Tax Bulletin.
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6. Joint submission on draft taxation ruling
TR 2008/D3: - Income tax: the taxation treatment of ship and aircraft leasing profits under the ships and aircraft articles of Australia’s tax treaties. A supplementary submission is planned.
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CASES
7. Deduction for administrative assistant allowed to the extent of seven eighths - Frisch v Commissioner of Taxation [2008] AATA 462
The Tribunal has set aside the objection decision in this matter and directed the Commissioner to issue a ruling to the taxpayer allowing a deduction for part of the expenditure for an administrative assistant.
The applicant has a disability that permanently confines her to a motorised invalid chair for mobility. She has limited motor skills and a mild speech impediment. The applicant employed an administrative assistant for three months while she took up a summer law clerk position at the Attorney-General’s Department. (Having a personal assistant was proposed to continue once the applicant commenced work as a legal practitioner after completion of her studies). The duties of the assistant in respect to an eight hour day were to type; write notes, memos and papers dictated by the applicant; retrieve, move and open files; photocopy documents; arrange the applicant’s desk and equipment; get coffee and lunch; and provide one hour per day of personal care assistance.
The Tribunal came to the conclusion that the expenditure was incurred in respect of the first limb of s 8-1 of the ITAA 1997 Act (to the extent of seven eighths), for the purpose of the derivation of the relevant income and it was incurred (to the same extent) in the derivation of the relevant income. This expenditure was not of a private or domestic nature.
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8. Fee for purportedly managing tax affairs not deductible – apportionment methodologies rejected – Harvey v Commissioner of Taxation [2008] AATA 457
The Tribunal has affirmed the Commissioner’s decision to disallow a deduction under section 25-5 of the Income Tax Assessment Act 1997 for $249,550 paid to a legal firm by the taxpayer, purportedly for managing his tax affairs, as he failed to discharge the onus of proving that the assessment was excessive in accordance with section 14ZZK of the Taxation Administration Act 1953.
The fee was in relation to an arrangement for making contributions to a non-employer sponsored superannuation fund (where it was claimed that the taxpayer, as both an employee of a company and its controlling shareholder, could make tax deductible contributions to a superannuation fund) and was identical to that in Drummond v Federal Commissioner of Taxation [2005] FCA 1129; 60 ATR 356. The taxpayer was provided with proforma documentation to enable the structure to be set up and made contributions of over $5m to the fund in the 1999 year. The firm of solicitors charged $250,000, with the invoices stating that $450 was for providing basic superannuation plan documentation (non-deductible), with the balance wholly deductible.
On the question of apportionment, the Tribunal observed that although what was specified in the invoices was a relevant factor, it was not determinative. Rather, the ‘proper inference to draw’ was that the taxpayer was prepared to pay the $250,000 ‘because of the value to him of the totality of the services that he received’. However, the Tribunal rejected all three carve-out methodologies put forward by the taxpayer to apportion the fees and also an estimate done by another practitioner based on hours (which was not accepted as the fee charged was a fixed fee based on what the market would bear without being time-based).
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9. Acquisition of artworks and antiques amounted to carrying on an enterprise - “The Taxpayer" and Commissioner of Taxation [2008] AATA 461
The Tribunal has determined that the applicant was entitled to be registered as an enterprise in accordance with A New Tax System (Goods and Services Tax) Act 1999 (GST Act), remitting the matter to the Commissioner with a direction to restore the applicant’s GST registration with effect from 1 October 2001.
The applicant's activities were described as ‘investment in artwork and antiques’. Since the introduction of GST, the applicant had spent at least $4 million on acquiring various artworks and antiques. The expenditure was treated as being for creditable acquisitions under section 11-5 of the GST Act, thus attracting input credits pursuant to section 11-20. These claims were made on the basis that the acquisitions of artworks and antiques were made in the course of an enterprise consisting of the dealing in such items.
After a detailed analysis of case law and various tax rulings, the Tribunal concluded that the applicant had been carrying on an enterprise done ‘in the form of a business’ or ‘in the form of an adventure or concern in the nature of trade’. In particular, the artwork was acquired as part of a process of acquiring and consolidating a valuable collection of saleable artwork, with the objective of deriving a profit. The Commissioner’s arguments that the holding of the artwork was an investment and hobby or recreational pursuit were rejected.
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10. Decision Impact Statement - Reliance Carpet
On 4 June, the ATO issued a Decision Impact Statement on Commissioner of Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22, where the High Court held that GST was payable with respect to a forfeited deposit upon the non-completion of a standard contract for the sale of real property, as reported in Edition 19/2008 of the Tax Bulletin.
The DIS gives the ATO view of the decision, including that the reasoning of the High Court is equally applicable to cases involving the forfeiture of deposits on contracts for the provision of goods and services generally and views on the issue of a single thing being dissected into multiple taxable supplies.
The administrative treatment is also covered. For instance, taxpayers who followed the view of the Full Federal Court (in that there was no supply and thus no GST payable on a forfeited deposit) need to amend the relevant activity statement(s) and pay any additional GST liability. The DIS states that ‘Taxpayers will have a period of 3 months from the issue of this Decision Impact Statement to make amendments to the relevant BAS without attracting administrative penalty and or GIC for the shortfall and shortfall period respectively’.
The DIS also notes that GSTR 2006/2 and GSTR 2000/28 will be amended to accord with the decision and reasons of the High Court.
Comments on the DIS are due by 30 July.
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RULINGS
11. Draft taxation ruling
TR 2008/D5 - Income tax: meaning of 'Australian superannuation fund' in subsection 295-95(2) of the Income Tax Assessment Act 1997.
The Institute will be preparing or co-ordinating the preparation of submissions to the ATO in respect of this Draft Taxation Ruling. If you have any comments please e-mail them to us at mailto:taxgroup@charteredaccountants.com.au by 8 July 2008.
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12. Product rulings
PR 2008/55 - Income tax: deductibility of interest incurred on borrowings related to the Merrill Lynch Structured Equity Loan
Addendums
PR 2007/70A1 - Addendum - Income tax: Great Southern 2008 High Value Timber Project
PR 2007/102A1 - Addendum - Income tax: Great Southern 2008 Almond Income Project
PR 2008/17A1 - Addendum - Income tax: Moora Citrus Project - 2008 Growers
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13. ATO interpretative decisions
ATO ID 2008/81 - GST and sale by an Owners Corporation of a new residential lot created out of common property
ATO ID 2008/82 - GST and subdivision of common property to create a new residential lot
ATO ID 2008/83 - Non-Resident Insurers: principal office or branch in Australia
ATO ID 2008/84 - PSO: accredited laboratory and appropriate facilities, resources and expertise
ATO ID 2008/85 - PSO: non accredited laboratory and appropriate facilities, resources and expertise
Withdrawals
ATO ID 2001/48 (Withdrawn) - Deductions and expenses: Home Office Expenses
ATO ID 2001/174 (Withdrawn) - Borrowing expenses - Stamp Duty on transfer of title, Lands Title Office search and registration of title fees
ATO ID 2001/233 (Withdrawn) - Television and Video Cassette Recorder hire costs
ATO ID 2001/377 (Withdrawn) - Air conditioner for retirement village home unit
ATO ID 2001/413 (Withdrawn) - Assessable Income: Royalties - Author not carrying on business
ATO ID 2001/534 (Withdrawn) - Rental Property Expenses - deductibility of loan establishment fees
ATO ID 2001/546 (Withdrawn) - Part-year Resident and Tax-free Threshold
ATO ID 2001/592 (Withdrawn) - Retirement income entities: Non-resident trustee
ATO ID 2001/612 (Withdrawn) - Derivation of interest income from term deposit with a bank
ATO ID 2001/614 (Withdrawn) - Deductibility of stamp duty and transfer expenses with regard to a crown lease
ATO ID 2001/666 (Withdrawn) - Reversionary bonus tax offset - refundable tax offset
ATO ID 2001/739 (Withdrawn) - Assessability of medical income.
ATO ID 2001/762 (Withdrawn) - Special rate of income tax on above-average special professional income
ATO ID 2001/805 (Withdrawn) - Retaining Cash-Register Z-Totals as Taxation Records on a Daily Basis
ATO ID 2002/58 (Withdrawn) - Agent and marketing expenses incurred on Assignment of a Crown Lease
ATO ID 2002/559 (Withdrawn) - Part IX Taxation of superannuation entities - all members are non-resident
ATO ID 2004/36 (Withdrawn) - GST and accounting on a cash basis
ATO ID 2004/500 (Withdrawn) - Consolidation: capital gains - tax cost setting amount - cost base and reduced cost base - incidental costs
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14. Legislative Determination
OPS 2008/2 - Variation to the rate of withholding from lump sum superannuation member benefits for certain recipients with a terminal medical condition
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15. Taxpayer alert
TA 2008/11 - Land Impairment Trust Arrangement
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LEGISLATION
16. Tax Laws Amendment (Election Commitments No. 1) Bill 2008, Income Tax (Managed Investment Trust Withholding Tax) Bill 2008, and Income Tax (Managed Investment Trust Transitional) Bill 2008 introduced
The Government has introduced into Parliament Tax Laws Amendment (Election Commitments No. 1) Bill 2008 (the Bill), Income Tax (Managed Investment Trust Withholding Tax) Bill 2008, and Income Tax (Managed Investment Trust Transitional) Bill 2008 on 4 June. The Bill contains the following measures:
Schedule 1:
- replaces the existing 30 per cent non-final withholding regime applying to certain distributions (called ‘fund payments’) from Australian managed investment trusts with a new withholding regime. The rate of withholding tax under the new regime will depend on the residency of the foreign investor. Where the foreign investor is resident in a country with which Australia has effective exchange of information (EOI) on tax matters, the tax treatment will as follows:
- fund payments of the first income year following Royal Assent of the enabling legislation will be subject to non final withholding at 22.5 per cent;
- fund payments of the second income year will be subject to a 15 per cent final withholding tax; and
- fund payments of the third and later income years will be subject to a 7.5 per cent final withholding tax.
These amendments apply to fund payments of income years starting on or after the first 1 July following Royal Assent.
The Institute has lodged a submission on the draft legislation on 16 May.
On 6 June, the Treasury released for public consultation draft regulations which specify the countries with which Australia has effective EOI. Comments are due by Wednesday 11 June 2008.
Schedule 2:
- amends the ITAA 1997 to exempt from income tax the Prime Minister’s Literary Award, to the extent that the award would otherwise be assessable income.
This amendment applies to assessments for the 2007-08 income year and later income years.
The Explanatory Memorandum to the Bill is available here.
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17. Legislation update
First Home Saver Accounts Bills passed by the House
A package of the following three Bills to implement the Government’s election commitment to introduce First Home Saver Accounts (FHSAs) has passed by the House on 2 June.
Tax Laws Amendment (2008 Measures No. 3) Bill 2008 passed by the House with amendments
Tax Laws Amendment (2008 Measures No. 3) Bill 2008 has passed by the House with 3 amendments. The amendments remove two Schedules (Income tax treatment of rent assistance paid to Austudy recipients and Carer adjustment payment) from the Bill. It is understood that these Schedules may be referred to a Senate committee and will be inserted in a future Bill.
The bill was introduced into the House last week and details contained in Edition 20/2008 of the Tax Bulletin.
A copy of the amendments is available here.
The Supplementary explanatory memorandum is available here.
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18. Legislative instrument
The Taxation Administration Act – Notice exempting entities from giving a payment summary for lump sum superannuation benefits to certain recipients with a terminal medical condition were registered on the Federal Register on 4 June 2008.
This instrument is a notice removing the requirement to issue a payment summary to the recipient of a withholding payment under paragraph 12-85(a) of Schedule 1 to the Taxation Administration Act 1953, where the payee is classified as having a terminal medical condition.
The instrument applies from 1 July 2007.
The Explanatory Statement is available here.
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ATO PUBLICATIONS
19. Recent ATO publications
Booklets and publications
TA 2008/11 - Land Impairment Trust Arrangement - This Taxpayer Alert describes land impairment trust arrangements associated with forestry managed investment schemes. These arrangements involve the sale of land at an impaired value by a member of a group of entities that are treated as a consolidated group for income tax purposes.
Take care with land trust arrangements - Tax Commissioner Michael D'Ascenzo today issued a taxpayer alert warning people to be cautious about entering into certain land trust arrangements.
Broad overview of the trust loss measures - general guide to the trust loss measures.
Division 7A calculator and decision tool - determine if a direct transaction by a private company to a shareholder or their associate will be deemed a dividend under Division 7A, and calculate the minimum yearly repayment required on a loan to avoid a deemed dividend arising under Division 7A.
eLink 20/08 - Bulletin to inform tax practitioners of the most recent updates to ato.gov.au including a lead article titled 'Are you getting the most out of Portal mail'. Issued on 28 May 2008.
Foreign exchange rates - List of daily, monthly and annual foreign exchange rates. Updated to include monthly and daily rates for May 2008.
Changes announced in the Federal Budget 2008-09 - Streamlining administration of Family tax benefit (FTB) - Information for Family tax benefit (FTB) clients on the Federal budget 2008-09 measure titled ' Streamlining administration'.
Interposed entity election or revocation 2008 - Election form and explanatory notes. For use by the trustee(s), company or partners to assist with completion of 2008 tax returns. NAT 2788-6.2008
Workforce education news: Issue 1 - This first issue of Workforce education news covers a range of topics affecting employers and professional associations, and their employees and members, including super changes from 1 July 2008. Issued on 30 May 2008.
Save time - do your business online - Encourage clients to use Electronic Commerce Interface (ECI) for bulk reporting and lodgment
Consolidated groups losses schedule instructions 2008 - A head company of a consolidated group or MEC (multiple entry consolidated) group that satisfies any one or more of a series of tests, must complete the Consolidated losses schedule 2008 and lodge it with the Company tax return 2008. NAT 7891-6.2008
GST and the environmental management charge - How GST applies to the environmental management charge.
Luxury car tax: increase in luxury car tax rate - The Government announced in the 2008-09 Budget that it will increase the luxury car tax from 25 per cent to 33 per cent from 1 July 2008.
Workforce education news - Information about Workforce education news and how to subscribe
Family trust elections
Family trust elections (FTEs) and Interposed entity elections (IEEs) - Question and answers - Provides questions and answers around the trust loss measures, FTEs and IEEs, company loss tracing and franking credit trading measures.
Family Trusts - Details of amendments - Outlines the amendments to the law as enacted on 24 September 2007 in the Tax Laws Amendment (2007 Measures No. 4) Act 2007 which apply to income years starting on or after 1 July 2007.
Increased flexibility for family trusts - This document describes the changes to the trust loss measures to further increase flexibility for family trust and interposed entity elections.
Family trust election, revocation or variation form 2008 - Election form and explanatory notes. For completion by family trust trustee(s) to assist with completion of 2008 tax returns. NAT 2787-6.2008
Administration
Additional time to lodge for income tax returns due on 15 May 2008 - Broadcast sent on 3 June 2008 to remind tax agents that the self assessment deferral date for individual and trust income tax returns has now passed and the due date to lodge and pay is 5 June.
Member contributions statement electronic reporting specification version 8.2 - The new member contributions statement (MCS) version 8.2 is now available from the software developers website.
The BAS service provider - edition 15, June 2008 - The BAS service provider edition 15, issued 30 May 2008. This edition includes information about the release of the draft Tax Agent Services Bill 2008, upcoming BSP seminars, fuel tax credits, closing a business, e-Record version 6.1, creditable purpose adjustments and motor vehicle holdback payments.
TaxPack 2008 - TaxPack 2008 is designed to help you complete your 2008 tax return for individuals. This guide includes information about the TaxPack, TaxPack supplement and TaxPack for retirees. NAT 0976-06.2008.
Superannuation
Provide your TFN to your super fund by June 30 - Taxpayers need to provide their tax file number (TFN) to their super fund by Monday 30 June, or risk paying extra tax on certain contributions.
GST and financial supplies for self managed super funds - This fact sheet explains the GST obligations for self managed superannuation funds and provides details of the requirements for claiming reduced GST credits on purchases used to make financial supplies.
Tax file numbers and superannuation - Information and examples on why it is important that your super fund knows your tax file number.
Residency of self-managed super funds - For a self-managed super fund to receive tax concessions, it must be a complying super fund and must satisfy a residency test.
Access to super for those with a terminal medical condition - Information about the proposed legislation relating to the taxation of superannuation lump sum payments to those with a terminal medical condition.
Tax-free super for members with a terminal medical condition - Changes to the taxation of super lump sum payments paid to a member with a terminal medical condition.
Schedules
Schedule 1 - statement of formulas for calculating amounts to be withheld - For payments made on or after 1 July 2008. Use this table to obtain the statement of formulas for calculating amounts to be withheld from payments. NAT 1004.
Schedule 10 - special daily rates tax table incorporating medicare levy including statement of formulas - For payments made on or after 1 July 2008. Use this table where a payee is engaged on a daily or casual basis. NAT 1024.
Schedule 11 - Higher Education Loan Programme (HELP) weekly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from weekly payments, to cover anticipated Higher Education Loan Programme (HELP) debts. NAT 2173.
Schedule 12 - Higher Education Loan Programme (HELP) fortnightly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from fortnightly payments, to cover anticipated Higher Education Loan Programme (HELP) debts. NAT 2185.
Schedule 13 - Higher Education Loan Programme (HELP) monthly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from monthly payments, to cover anticipated Higher Education Loan Programme (HELP) debts. NAT 2186
Schedule 14 - statement of formulas for calculating Higher Education Loan Programme (HELP) component including coefficients for calculating weekly withholding amounts incorporating HELP component - For payments made on or after 1 July 2008. Use this table to obtain the statement of formulas for calculating withholding amounts for payees who have an accumulated Higher Education Loan Programme (HELP) debt. NAT 2335.
Schedule 15 - statement of formulas for calculating witholding amounts for members of the defence force - For payments made on or after 1 July 2008. Use this table to obtain the statement of formulas for calculating withholding amounts from payments made to members of the defence force. NAT 2446
Schedule 16 - statement of formulas for calculating Student Financial Supplement Scheme (SFSS) component including coefficients for calculating weekly withholding amounts incorporating SFSS component - For payments made on or after 1 July 2008. Use this table to obtain the statement of formulas for calculating withholding amounts for payees who have an accumulated Student Financial Supplement Scheme (SFSS) debt. NAT 3305.
Schedule 17 - Student Financial Supplement Scheme (SFSS) weekly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from weekly payments, to cover anticipated Student Financial Supplement Scheme (SFSS) debts. NAT 3306.
Schedule 18 - Student Financial Supplement Scheme (SFSS) fortnightly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from fortnightly payments, to cover anticipated Student Financial Supplement Scheme (SFSS) debts. NAT 3307.
Schedule 19 - Student Financial Supplement Scheme (SFSS) monthly tax table including statement of formulas - For payments made on or after 1 July 2008. Use this table to calculate the additional tax to be withheld from monthly payments, to cover anticipated Student Financial Supplement Scheme (SFSS) debts. NAT 3308.
Schedule 2 - weekly tax table incorporating medicare levy with and without leave loading - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made to payees on a weekly basis. NAT 1005.
Schedule 20 - quarterly tax table incorporating medicare levy with and without leave loading - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made payees on a quarterly basis. NAT 3479.
Schedule 21 - coefficients for calculating weekly withholding amounts incorporating SFSS component and HELP component - For payments made on or after 1 July 2008. Use this table to calculate weekly withholding amounts for payees who have both an accumulated Higher Education Loan Programme (HELP) debt and an accumulated Student Financial Supplement Scheme (SFSS) debt. NAT 3539.
Schedule 22 - special tax table for aged pensioners and low income aged persons (senior Australians) - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made to senior Australians. NAT 4466.
Schedule 23 PAYGW - special tax table for payments to individuals performing work or services in the JPDA - For payments made on or after 1 January 2007. Use this table if you make payments to individuals performing work or services in the Joint Petroleum Development Area (JPDA), as defined in the Timor Sea Treaty prepared at Dili on 20 May 2002. NAT 7288.
Schedule 28 - tax table for unused leave payments on termination of employment - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from unused leave payments on termination of employment or office. NAT 3351.
Schedule 3 - fortnightly tax table incorporating medicare levy with and without leave loading - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made to payees on a fortnightly basis. NAT 1006.
Schedule 30 - tax table for back payments including lump sum payments in arrears - For payments made on or after 1 July 2008. Use this table to calculate withholding amounts from back payments, including lump sum payments in arrears. NAT 3348.
Schedule 31 - tax table for annuities - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from annuity payments that are non-superannuation income stream. NAT 3350.
Schedule 32 - tax table for employment termination payments - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from employment termination payments paid to an individual. NAT 70980.
Schedule 33 - tax table for superannuation lump sums - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from superannuation lump sum payments to an individual. NAT 70981.
Schedule 4 - monthly tax table incorporating medicare levy with and without leave loading - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made to payees on a monthly basis. NAT 1007
Schedule 5 - weekly tax table with no and half medicare levy including weekly table for medicare levy adjustment - half levy - For payments made on or after 1 July 2008. Use this table if you make payments to a payee who is entitled to a full or half levy exemption from the Medicare levy. NAT 1008.
Schedule 6 - medicare levy adjustment weekly tax table - For payments made on or after 1 July 2008. Use this table if you make payments to payees on a weekly basis and the payee is entitled to medicare levy adjustment. NAT 1010
Schedule 7 - medicare levy adjustment fortnightly tax table - For payments made on or after 1 July 2008. Use this table if you make payments to payees on a fortnightly basis and the payee is entitled to medicare levy adjustment. NAT 1011.
Schedule 8 - medicare levy adjustment monthly tax table - For payments made on or after 1 July 2008. Use this table if you make payments to payees on a monthly basis and the payee is entitled to medicare levy adjustment. NAT 1012.
Schedule 9 - special tax table for actors, variety artists and other entertainers - For payments made on or after 1 July 2008. Use this table to calculate amounts to be withheld from payments made to actors, variety artists and other entertainers, who receive daily payments. NAT 1023.
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OTHER NEWS
20. The Commissioner warns taxpayers to take care with land trust arrangements
The Commissioner issued a taxpayer alert, TA 2008/11 (refer item 15) on 6 June, warning taxpayers to be cautions about entering into certain land trust arrangements. These arrangements involve land being sold at a loss because it is leased for growing trees under a forestry managed investment scheme until an agreed date, usually many years in the future.
The Commissioner said that the ATO is particularly focusing on whether the arrangement really gives rise to a revenue or capital loss and how future distributions from the land trust should be treated for tax purposes.
The Commissioner also noted that for those taxpayers with a product ruling, they can rest assured that they are entitled to deductions if the arrangement is carried out in accordance with that product ruling. But, these taxpayers should be careful of how they treat distributions from any trust which is not covered by the product ruling.
The relevant press release is available here.
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TRAINING AND DEVELOPMENT
Chartered Accountants Tax Seminars for Practice
Throughout June in Brisbane, Melbourne, Adelaide and Perth. Complete guide to Small business CGT concessions, GST and ‘Supply of a going concern’, GST and ‘Margin scheme issues’ and more.
Chartered Accountants Corporate Tax Conference
Sydney, 12 - 13 June 2008. Join industry experts as they discuss practical solutions and strategies across a number of key tax areas fundamental to business. The very latest on Division 250, a wrap up on TOFA, and much more.
Chartered Accountants New Employees Taxation Workshop
Throughout July and August in Sydney, Brisbane, Melbourne, Adelaide and Perth. This intensive two day workshop will provide new employees with the taxation skills and understanding needed to improve productivity in the early stages of employment.
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MEMBER INPUT
On the government's proposals to remove the ability to vary the test individual in regard to family trust elections retrospectively to 1 July 2007 (except in relation to marriage breakdown), one member writes:
In regard to the ATO "Family trust election, revocation or variation form 2008' released on 3 June, I am not sure how a poor tax practitioner is supposed to cope with instructions that tell you at one point that you can do a variation (to the test individual) with effect from 1 July 2007 but … check with us before lodging the form to see if the Government's Budget proposals are enacted!
Another member writes
Today we received an overdue payment reminder for "income tax" for a client. Upon reviewing of the client's Income Tax Account we could see that the taxpayer had been given credit for two PAYG income tax instalments rather than the three that had been paid (that could clearly be seen in the taxpayer's Integrated Client Account).
One staff member telephoned the Tax Agent Phone Line, FKC 1251, to query this. The ATO's first response was that we should object to the assessment. But, we were not objecting to an assessment rather we wanted to understand why our client had received an overdue payment reminder and communicated this to the ATO officer.
The ATO officer then asked someone in the Accounting division who again gave us the same response. It was then passed to an "income tax specialist" who could not shed any further light even though my staff member had gone through the Integrated Client Account with the ATO office which showed the three PAYG instalment payments.
After more than an hour, the ATO officer put an escalation on the matter and was finally convinced that we were correct in querying the overdue payment reminder. I guess we will have to see what happens in the next 28 days.
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