Income Tax Tax Policy

More proof that journalists are lobbyists

In the fairfax papers today is another “big companies should pay more tax” article. And like most of these articles, it is just rubbish. The article states that ASX listed companies have tax rates at less than 30% – even lower than 10% – from analysing their accounts and looking at their tax expense line. […]

Income Tax Legislation Planning Idea Rulings

Using imputations credits in an entity that does not have retained earnings

I have been asked a few times about using imputations credits in an entity that does not have retained earnings. Well there are a series of ways to do this. What people often try to do in the small end of town is to drop in some tax free income (often using section 23AJ or […]

Income Tax Planning Idea

Can a new company pay a fully franked dividend in its first year?

A question I get asked regularly is can a new company pay a fully franked dividend in its first year, even if it has never paid a tax bill yet as it has not yet lodged its first tax return and so has not paid any PAYGI? The answer is a big YES without any […]

GST Legislation Rulings

“Excess GST”, “passed on”, “reimbursed”…

One of the best amendments to the GST Act ever was inserting a new Division, Division 142. This Division applies to tax periods starting on or after 31 May 2014. The object of Division 142 is to ensure that excess GST is not refunded if this would give an entity a windfall gain. In summary, […]

Income Tax Rulings

Employee Share Schemes – 4 simple rules…

The Commissioner has released a draft taxation determination on employee share schemes. While this draft determination relates a to employees who get a beneficial interest in a share subject to shareholder approval (this does not come within the employee share scheme rules) it is a great time to summarise the employee share scheme rules. Simply, […]

Income Tax Legislation Rulings

Gardening leave and personal services income

I never thought I would read the term “gardening leave” in a tax ruling but it is the main issue in draft taxation determination TD 2014/D15. The issue is whether the payment you get while you are on gardening leave (which if you don’t know is when you are told to go home, work in […]

Funny Stuff GST Income Tax Rulings

Am I cool if I say Bitcoin?

I live in a town of less than 400,000 people and I just saw a Bitcoin ATM. I don’t know who to use it but how cool am I for living near a Bitcoin ATM… The Commissioner also is cool as he has released his thoughts on the tax treatment of Bitcoin transaction. In summary, […]

Tax Policy

Julia Gillard’s tax legacy

This is a policy rant so if you care about what the current tax law is, and don’t care what it could have been, then save yourself some time and don’t read this…  This week we have both the release of former Prime Minister Julia Gillard’s biography telling us about her valuable legacy and her […]

Cases Income Tax

35-55 and non commercial losses discretion

Given it happens so infrequently, I thought I should mention a case where the AAT has required the Commissioner to exercise his discretion to not apply the non commercial losses rule in Division 35 of the ITAA97. In AAT Case [2014] AATA 620, Re Bentivoglio v FCT a medical doctor earning over $250,000 (so could […]

Income Tax Planning Stuff Rulings

Divorce and Dividends #2

The Commissioner has released a fact sheet on when a payment or in specie transfer from private company to an individual under matrimonial proceedings can be a dividend or a deemed divided. I have discussed this before but there are some interesting examples in this fact sheet: First the simple case… Tim, Helene and a […]