Tax Facts

Tax Facts contains news and alerts relating to tax practice, for the benefit of accountants and other professionals in public practice. Please click on the links below for recent issues. You may also like to peruse Tax Facts by topic category - topics are listed below to the right.

Please note that the information provided in Tax Facts is of a general nature only and should not be acted upon without specific advice based on the precise facts and circumstances of a particular taxpayer.

If you do not already receive Tax Facts direct from us but would like to, please subscribe by entering your details to the right of this message.

Subscribe to Tax Facts

Subscribe to: Tax Facts Mailing List
  • Special difficulty in objecting against a default assessment

    The Commissioner has released a Decision Impact Statement on the decision of the Full Federal Court in Rigoli v FC of T [2014] FCAFC 29. The Commissioner was successful on appeal in having existing law applied, although the case is a good illustration of the fundamental difference between a normal income tax assessment under s166 of the 1936 Act (based on an income tax return) and a default assessment under s167 (when a return is not furnished or the Commissioner is not satisfied with the return).

    In the AAT hearing in this case, the taxpayer had conceded the Commissioner's determination of his assessable income, limiting his submissions then to depreciation deductions which he argued the Commissioner had not allowed. On first instance in the Federal Court and on appeal to the Full Court, it was held that the taxpayer had failed to discharge the burden of proving that his assessment of tax was excessive. It was not enough to identify that some elements of the assessment were wrong – a taxpayer seeking to overturn an assessment under s167 must generally establish by evidence what the actual taxable income is.

    The point in the case, in a sense, is a procedural one. But a very important point nevertheless and, in the circumstances of this case, fatal to the taxpayer.
    ... Read More

    21 May 2014

    Topic: Income Tax

  • First 2014 amending Act passed

    The Bill containing the first 2014 tax amendments has been passed by both Houses of Parliament. The Bill deals only with 2 matters:
    • Farm Management Deposits – enables consolidation of multiple FMDs into a single deposit, increases the allowable limit of taxable non-primary production income from $65,000 to $100,000 (from 1 July 2014), and ensures that FMDs cannot become ‘unclaimed monies’.
    • Refunds of GST – the rules for refunds of overpaid GST have been rewritten to remove refunds being reliant on an exercise of discretion by the Commissioner and to correct several perceived deficiencies in the existing law, maintaining the rationale that taxpayers should generally not receive refunds if they have passed on the cost of overpaid tax to others.
    (Tax Laws Amendment (2014 Measures No. 1) Bill 2014)
    ... Read More

    21 May 2014

    Topic: Income Tax/GST

  • Potential increased arbitrage of tax rates

    This edition of Tax Facts was deferred from last week to avoid clashing with the Federal Budget. I will not add to the prolific coverage of the Budget, except to make a brief comment about proposed tax rates.

    Assuming the Government can overcome its political difficulties and achieve enactment of relevant Budget proposals, the gap between the corporate tax rate and the highest marginal rate will increase by 2.5% from 1 July 2014 (although the additional 2% levy is proposed to run only for 3 years) and an additional 1.5% (making a total increase of 4%) from 1 July 2015 when the corporate tax rate is proposed to decrease to 28.5%. So structuring things correctly – attracting the corporate tax rate without holding appreciating CGT business or investment assets in companies (and consequently giving away very valuable CGT concessions) – is becoming even more important. There are almost always ways to achieve this for business clients.
    ... Read More

    21 May 2014

    Topic: Income Tax