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    Business Tax

    Fringe Benefits Tax and the holiday season

    The 2020 festive season is upon us! We are decking the halls and merrily singing carols to lift our spirits after a challenging year. Christmas parties are on the calendar and staff gifts are on order. Learn about FBT this holiday season.

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    Working from home tax deductions

    Thousands of Australians are working from home this year. With this significant shift of people to their home office, the ATO recognised the need to introduce a simple method of calculation for work expenses.

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    Making the most of small business capital gains tax concessions

    As a business owner it’s important that you understand the small business capital gains tax (CGT) concessions. Martin van der Saag, North Advisory Founder and Strategic Advisor, discusses the different types of concessions available and how we can help maximise your eligibility.

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    Uber travel expenses not FBT-exempt

    The ATO has clarified that any benefit arising from travel by taxi, and not a ride-sourcing service, by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee’s place of work.

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    2018/19 tax changes for small businesses

    For 2018/19 income year, companies with an annual aggregated turnover under $50m will have a reduced tax rate of 27.5%. To be eligible for the reduced rate, the company must be a base rate entity.

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    TPRS Exemptions: Legislative Instrument

    Legislative Instrument Taxable Payments Reporting System – Reporting Exemptions for Certain Entities Determination 2019 and Explanatory Statement (TPRS 2019/D1) regarding the de minimus exemption for entities required to lodge Taxable Payments Annual Reports (TPAR) under amendments enacted by the Sch 2 Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 and Sch 2 Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Act 2018 have been issued for comment.

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    FBT reasonable food and drink amounts

    Taxation Determination TD 2019/7 sets out the amounts that the Commissioner considers reasonable under s 31G of the Fringe Benefits Tax Assessment Act 1986 for food and drink expenses incurred by employees receiving a living-away-from-home allowance (LAFHA) fringe benefit for the fbt year commencing on 1 April 2019.

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    Instant tax write-off for small business assets extended

    The Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 was passed by the Senate and the House of Representatives on the morning of 4th April 2019, with 18 government amendments which give effect to the federal budget announcement to increase the threshold to $30,000 and expand the eligibility to medium-sized businesses with a turnover of less than $50 million.

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    Consultancy fees not deductible as rental property expenses

    As a general rule, expenses incurred by a taxpayer for the purpose of earning assessable rental income will be deductible, provided they are not private or capital in nature, and that they are not explicitly excluded from deduction.

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    Payroll Tax Rebate Scheme

    If you are a NSW business owner, you may be eligible for a payroll tax rebate. Businesses that create and fill new jobs on or after 31 July 2016 will receive payroll rebates worth A$6,000. New jobs commencing on or after 31 July 2016 will receive a rebate of up to $2,000 payable on the first anniversary and up to $4,000 on the second anniversary.

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    Guidance for courier and cleaning industries reporting system

    As of 1 July 2018, under this reporting system, businesses in the courier industry and the cleaning industry are required to report payments they make to contractors (individual and total for the year) to the ATO. The reporting system previously was only operational for the building and construction industry.

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    ATO Benchmark Interest Rate for Division 7A loans for Year Ending 30 June 2019

    The ATO has advised that it intends to issue the following guidance on 25 July 2018: Taxation Determination TD 2018/14 Income tax: what is the benchmark interest rate applicable for the year of income that commenced on 1 July 2018 for the purposes of Division 7A of Part III of the Income Tax Assessment Act 1936 and how is it used?

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    Reasonable travel and meal allowances for 2018/19

    The Commissioner has set out the amounts considered to be reasonable in relation to claims made by employees for the 2018/19 income year for travel and meals.

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    Simplified transfer pricing — ATO guidance updated

    The ATO has updated its guidance on simplified transfer pricing record keeping options to include the minimum interest rate of 3.79% for small related party outbound loans for the 2018 year. Paragraph 75 of Practical Compliance Guideline PCG 2017/2 has been updated to reflect the new rate.

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    FBT Exemptions and Concessions

    It sounds strange, but the FBT law is full of exemptions and concessions. The FBT law was introduced way back in 1986 with the intention to tax non-cash fringe benefits. But in doing so, the law has allowed for exclusions, concessions, reductions and exemptions.

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    GST changes for Australian retailers who use drop shipping

    From 1 July 2018, GST will apply to sales of low value imported goods (valued at A$1,000 or less) to consumers in Australia. These GST changes will also affect Australian GST-registered suppliers including Australian retailers who ‘drop ship’.

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    Fundamental year end tax planning Issues

    It is best practice to review clients’ taxation affairs in advance of the year end to identify any tax planning opportunities that may exist. Good planning opportunities do not necessarily have to be most complex / innovative, simple strategies are often the most effective.

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    Warning for hobbies claiming GST credits

    An entity cannot be registered for GST unless it is carrying on an enterprise (GST Act s 23-5; 23-10). The term “carrying on an enterprise” is defined in s 9-20 as an activity, or series of activities done in the form of a business.

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    International taxation issues to consider – Part 3

    Most tax advisers will agree that one of the many ‘knock-on’ effects associated with the fast pace of globalisation is that businesses of all types and sizes are increasingly able to operate cross-border.

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    Tax technical update – December 2017

    A list of the topics and issues raised in the December 2017 edition of the tax technical update is summarised.

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    International taxation issues to consider – Part 2

    The legislation in relation to international tax is complex and has been amended significantly across recent years. Most international tax issues tend to focus around the fundamental concepts of tax residence, source and derivation.

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    International taxation issues to consider – Part 1

    Globalisation has had a profound impact on the modern business operating environment, whereby significant technological transformations especially over the last decade have given arise to increased international mobilisation of both staff and senior level management.

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    Addendum to reasonable travel and overtime meal allowances determination

    The ATO has issued an addendum to Taxation Determination TD 2017/19 (reasonable travel and overtime meal allowance expense amounts for the 2017/18 income year).

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    2016/17 tax year – tax changes for small business

    As 30 June 2017 is fast approaching, we would like to advise of some key tax changes that your business may be in a position to take advantage of before the end of the financial year.

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    Tax time 2017 ATO service commitments

    The ATO will aim to finalise the majority of electronically lodged current year tax returns within 12 business days of receipt. This includes both individual and non-individual tax returns.

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    Couriers and cleaners to report contractor payments

    Recently the Federal Budget included new strict reporting requirements for payments to contractors in the courier and cleaning industries with effect from 1 July 2018.

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    Capital gains tax relief – start planning now

    The changes to superannuation announced in the 2016 Federal Budget have been passed by Parliament. Amongst the changes was legislation which provides CGT relief for members who are transferring assets out of retirement phase in 2016/17 to comply with the changes.

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    FBT on private use of utility vehicles

    A motor vehicle designed to carry a load of more than one tonne may still be a reportable fringe benefit for an employee. The ATO has confirmed in a recent Private Binding Ruling any consistent use of these vehicles is a residual fringe benefit.

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    Uber drivers must register for GST

    In ‘Uber BV v FC of T’, the Federal Court has held that persons who are Uber drivers are required to be registered for GST purposes. The court considered that the provision of a ride by an uberX Partner to a customer was the supply of “taxi travel” for GST purposes.

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    ATO targeting business operating as cash only

    Businesses operating in the cash economy will be under increased scrutiny in the coming months. The ATO is looking to continue their fight against the cash economy by visiting various businesses in capital cities that are currently operating as a “cash only” business.

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    GST and countertrade transactions

    The Commissioner has issued Practical Compliance Guideline PCG 2016/18 which outlines a practical compliance approach for certain countertrade transactions that are GST neutral.

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    New Australian law applying GST to imported digital products and services

    Australia has introduced a new law applying the Australian Goods and Services Tax (GST) to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales from 1 July 2017.

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    GST cross-border transactions between businesses

    Recent changes to Australia’s GST law mean that from 1 October 2016, certain transactions between overseas businesses and Australian businesses will no longer be subject to GST.

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    Cabinet makers – ATO benchmarks

    Continuing our review of ATO benchmarks, we review the performance benchmark rates for businesses in the cabinet makers industry. Businesses in this industry typically manufacture and install cabinets for kitchens, bathrooms, wardrobes and shop fittings.

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    Electrical services – ATO benchmarks

    Benchmarks are one of the indicators that the ATO uses to identify businesses for review or audit. The ATO releases performance benchmark rates each year for businesses across a number of industries to compare their operations against industry expectations.

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    Airport lounge memberships

    A recent tax determination has confirmed that the annual membership fee for airport lounges is deductible if the membership holder has an employment relationship with the bill payer.

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    Small business CGT concessions

    If you are running a small business, pass the aggregated $2 million turnover test or pass the $6 million net asset value test, you may be entitled to the Small Business CGT Concessions when you sell active business assets.

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