Taxation
Content Summary
2024
21 November 2024 - CPA Australia worked hard with many of the professional bodies, the Assistant Treasurer's office, and Treasury to resolve substantial concerns we had at the time the Tax Agent Services (Code of Professional Conduct) Determination 2024 (the Determination) was first issued. We now welcome the opportunity to comment on the Tax Practitioners Board's draft guidance on the Determination.
15 November 2024 - The Commissioner of Taxation (Commissioner) should exercise his General Powers of Administration to disregard the application of the DDCR in purely domestic arrangements where there is no artificial increase in associate or third party debt in Australia. For purely domestic transactions with no evidence of debt dumping, smaller market taxpayers, especially those outside consolidated group structures, should not face integrity measures when restructuring related-party debt; these groups may suffer a competitive disadvantage relative to larger multinationals managing intragroup debt where tax consolidation applies.
8 November 2024 - CPA Australia supports the introduction of the Bill, which offers tax relief for expenditure incurred in providing food and specified services including storage and transportation of food to registered food relief charities. This legislation is particularly timely given the current economic climate, where rising living costs are exacerbating food insecurity across Australia.
6 November 2024 - CPA Australia has made a submission to the Treasury outlining our support for a robust regime to dissuade and penalise the promotion of schemes designed, marketed and/or implemented to exploit Australia’s tax system.
16 October 2024 - The Government’s proposal to deny deductions for General Interest Charge (GIC) and Shortfall Interest Charge (SIC) from 1 July 2025 raises significant concerns, particularly regarding its impact on small businesses and individuals. While the measure is intended to address the growing outstanding collectible business tax debt, the approach risks unintended financial harm.
9 October 2024 - We submit that paragraph 27's assertion that the Commissioner could have been successful in applying Part IVA of the ITAA 1936 to a narrower scheme is unsupported. in the PCG. the ATO should clarify and include examples on how the ATO would apply the personal services income rules and Part IVA for non-white collar professional businesses such as a tradesperson or a machinery operator, and where a married couple’s business hires an apprentice or an employee, and where both individuals in a marital relationship are income generators, or they have an income-generating employee.
9 October 2024 - The briefing paper on New Zealand’s tax system presents an opportunity to assess the challenges and opportunities that will potentially shape the tax framework for decades to come. This submission addresses the key questions outlined in the paper. We also refer to CPA Australia’s recent research paper, Towards Better Tax Policy and Tax Reform for consideration in your review.
2 October 2024 - We welcome the opportunity to comment upon the proposed amendments to the Code of Professional Conduct contained in the Tax Agent Services Act 2009. The exposure draft amendments are contained in the Tax Agent Services Amendment Determination 2024 and Explanatory Statement. The ED amendments make changes to the Tax Agent Services Determination 2024 which amends the Code. Our comments relate to the ED amendments as well as other provisions of the Determination.
30 August 2024 - Based on the statement contained in paragraph 7 of the Draft PCG, we understand that the ATO intends to only allocate compliance resources to the application of section 99B to trusts that at some time have been a non-resident trust. We believe the compliance saving measures contained in the Draft PCG will assist many taxpayers in complying with section 99B. We have provided some comments requesting further clarity in the Draft TD and Draft PCG in relation to a number of the examples.
20 August 2024 - The proposed expansion of the capital gains tax base for foreign residents significantly broadens the scope of assets, that could potentially be caught under the new proposals. It also potentially conflicts with Australia’s clean energy transition ambitions. Without transitional rules or grandfathering provisions, existing foreign investors may face unexpected tax liabilities on assets that were not factored in at the time of investment. This, coupled with a relatively low $20 million threshold that applies before a reporting obligation arises to the ATO, means there is a need for clear legislative and administrative guidance and practical examples by the time the law is enacted. A post-implementation review should also be conducted.
9 August 2024 - CPA Australia welcomes targeted and effective enhancements to the regulation of the tax system and tax professionals. However, we are concerned that proposals put forward in Treasury’s Consultation paper will create significant barriers to entry into the tax profession that disproportionately impact small and medium practitioners.
9 August 2024 - We support allowing small and medium businesses up to four years to request amendments to their tax assessments. Partnerships and self-managed superannuation funds that carry on a small or medium business should also be allowed the 4-year amendment period. Partners in a partnership, beneficiaries of a trust estate, or members in an SMSF that is a small or medium business entity should also be allowed the 4-year amendment period. An amendment application process requiring a decision by the Commissioner may significantly slow down the process and involve extensive further inquiries. The Commissioner’s period of review should be revised to two years instead of a further four years in light of the law change.
5 August 2024 - We broadly support the government’s announced measure in the 2023–24 Mid-Year Economic and Fiscal Outlook to improve the integrity of the foreign resident capital gains withholding regime. However, we recommend the Commissioner of Taxation consider issuing legislative instruments under Section 14-235(5) of the Taxation Administration Act 1953 to vary the FRCGW rate to nil in circumstances where amounts relating to certain related party transfers do not give rise to a capital gains tax liability.
19 July 2024 - CPA Australia is supportive of the implementation of the Pillar Two Global Anti-Base Erosion (GloBE) rules in Australia and recommends: The government, through the Australian Accounting Standards Board (AASB) works to issue specific and timely guidance as to when the Pillar Two rules are substantively enacted in Australia, to enable taxpayers to meet their financial reporting obligations. The government considers the compliance cost implications and explores opportunities to reduce compliance burdens. Further guidance is provided on how the Australian tax consolidation rules in Part 3-90 of the ITAA 97 interact with the Australian Pillar Two rules.
18 July 2024 - We support the STEP Submission noting that with the existing positive 310% recovery by the Probate Office, the proposed fees are not reasonable or proportionate. We further support the Base Case discussed in the Regulatory Impact Statement be maintained, including maintaining probate fees at existing levels, pending a thorough and focused review of the Probate process and further efficiencies that could be identified and adopted.
15 July 2024 - The Joint Bodies express our strong concerns about the construct and implications of provisions of the legislative instrument registered on 2 July 2024, the Tax Agent Services (Code of Professional Conduct) Determination 2024 (the LI). The LI imposes additional obligations on registered tax and BAS agents (tax practitioners) under the Code of Professional Conduct (Code) in section 30-10 of the Tax Agent Services Act 2009 (TASA).
28 June 2024 - The final list of specified jurisdictions for public country-by-country (CbC) reporting disclosure remains unknown at the time of the Bill’s introduction. We recommend Switzerland, Singapore and Hong Kong be removed from the final list of specified jurisdictions for disaggregated reporting. The $20,000 Instant Asset Write-Off threshold period should be permanent to give businesses certainty in their investments. The Small Business Energy Incentive measure is effectively lost as it applies to the 2024 financial year only. The incentive should be extended or made permanent to encourage small businesses to invest in energy-efficient assets.
13 June 2024 - CPA and CAANZ do not support the expansion of the ATO’s powers into criminal law enforcement. Australia has a very well-established framework for the enforcement of criminal law through its various criminal law agencies and the ATO should work with these criminal law agencies to ensure appropriate application of the law, with a clear separation of civil and criminal powers.
31 May 2024 - The Joint Bodies reiterate our concerns over the lack of proper consultation, particularly in relation to the amendments introduced by the Australian Greens to Part 5 of Schedule 3 to the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023. Those amendments were not subject to the usual process of public consultation and were tabled without an accompanying explanatory memorandum. This has resulted in vaguely expressed law that imposes a significant compliance burden on practitioners and will be challenging to apply and regulate in practice.
20 March 2024 - we suggest the Government more broadly consider the pros and cons of the early adoption of Pillar Two in full. We note that mainland China has not announced its position on Base erosion and profit shifting (BEPS) Pillar Two implementation and Singapore recently stated it will only consider the implementation of UTPR after their Domestic Top-up Tax (DTT) and IIR have been implemented.
23 February 2024 - Further work should be undertaken by the ATO on the case for tax deductibility of financial advice fees as part of an initial advice arrangement; apportionment principles and evidentiary requirements and date of application.
22 February 2024 - One of our key concerns is the guidance on the information to be published on the Register. In addition, regarding the Transitional rules, we have identified errors. We also highlight that the two Code items are unlikely to stop unregistered or deregistered preparers from circumvention of the Code obligations.
14 February 2024 - A joint submission requesting the Queensland Government increase funding to the QRO to improve their ability to meet service standards and deliver timely advice.
13 February 2024 - In response to the ATO’s request, we make the following comments to further improve the efficacy of the ATO’s PAG on the amendments to the thin capitalisation rules.
29 January 2024 - The Joint Bodies support the proposition that the Tax Practitioners Board (TPB) should have a robust sanctions regime to deter misconduct and impose appropriate penalties proportionate to the level of wrongdoing. Fundamentally, we consider it important that any sanctions regime be built on the core principles of proportionality and fairness. To give effect to these principles, the TPB’s powers should comprise a wider range of graduated sanctions that allow the TPB to impose the appropriate sanction proportionate to the severity of the relevant contravention or misconduct.
23 January 2024 - The Professional Accounting Bodies support all measures that intend to maintain or improve the integrity of our taxation and superannuation system and those who operate within it. We are of the view that it is important to ensure that any amendments effectively address identified shortcomings in the existing regulatory environment. Our submission intends to assist the Government achieve this through suggested amendments to the draft Instrument and draft Exposure Draft.
2023
22 December 2023 - We stress that passage of this Bill as is has the potential to damage our economy and jobs. Capital is mobile and investors have choices. They seek opportunities with the best return on investment and this Bill will impact that return. Jurisdictions with thin capitalisation rules that are more favourable and less complicated, will look more attractive to investors than Australia.
9 November 2023 - We support the PCG in uplifting the threshold for the market value of estate assets from $5 million to $10 million. We made corrections to some paragraphs and examples. We also made suggestions to improve the efficacy of the PCG.
30 October 2023 - Our biggest concern is the new ordering between the debt deduction creation rules and all other thin capitalisation provisions in Division 820. Because of the lack of a tax purpose test, this new ordering means the majority of the debt deductions in respect of the newly amended ‘financial arrangements’ will potentially be denied deductions under the amended debt deduction creation rules. This will reduce the amount of deductible debt, increase the tax and that will decrease investment in Australia. It will also significantly increase the compliance burden for taxpayers in tracing their use of funds and acquisitions of assets.
29 September 2023 - We believe that the adoption of a patent box tax regime will send a strong and positive signal of Hong Kong’s desire to attract and retain R&D activities. The Government should consider the merits of not following the OECD’s Nexus Approach provided it is functionally equivalent, similar to that of the IP regime in mainland China as it is a more expansive and flexible IP box regime, and it has been evaluated as non-harmful by the OECD.
25 September 2023 - We believe it is incorrect to determine tax residency based on a set number of days, and it should not be the sole determinative factor. Where individuals live and work overseas but have their spouse and children living in Australia, such individuals do not sever their Australian tax residency. We also do not believe that individuals should be considered tax residents of Australia simply because they have spent more than 45 days here.
21 July 2023 - The Government should defer the commencement date and change the $2m de minimise threshold to a net basis. Consultation is needed for debt creation rules and correction is needed for the third party debt test.
18 July 2023 - We recommend the Government extend the bonus period beyond one year and increase both the size of the bonus deduction and the total eligible expenditure. We also seek clarification on a number of important aspects to improve the proposed tax incentive.
17 July 2023 - The Professional Accounting Bodies recommended the federal and state governments develop a holistic pre-prepared and tested national disaster relief package for business and their employees.
14 July 2023 - We recommend improved targeting of the trustee tax and reference the Division 7A provisions in Australia and expand the tax concession period for deceased estates.
14 March 2023
28 February 2023
2022
22 December 2022
20 December 2022
11 December 2022
7 December 2022
4 November 2022
20 October 2022
6 October 2022
5 October 2022
3 October 2022
30 September 2022
13 September 2022
14 April 2022
31 January 2022
2021
28 September 2021
NZ IRD Expenditure claims living onsite in hotel or boarding house
13 July 2021
28 June 2021
10 June 2021
28 May 2021
30 April 2021
23 March 2021
15 March 2021
1 March 2021
12 February 2021
2020
27 July 2020
28 April 2020
2 April 2020
2 April 2020
2019
21 August 2019
12 August 2019
23 April 2019
14 March 2019
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