TAXAGENT

the
Issue 49  September 2010

Employer
obligations –
Continuing
to ensure
fair’s fair

Targeting
super funds
that don’t
lodge
Lifting the lid on the
cash economy
Australian
business
register gets
an upgrade

next 
 Commissioner’s message
Strengthening positive working relationships
Recently I released the ATO’s 2010–11 compliance
program outlining our priorities for the coming year.
Our compliance program describes
the tax and superannuation
compliance risks we are most
concerned about and what we
are doing to address them. This
year, our focus includes refund
fraud, the cash economy, employer
obligations and tax secrecy havens.
We believe that being open and
accountable about our compliance
activities encourages voluntary
compliance and builds community
confidence.
Australia’s strong culture of
voluntary compliance means our
strategies are weighted to helping
people and businesses comply.
Behind our strategies is our belief
that prevention is better than cure.
For example, benchmarks, which
are published on our website,
are a useful tool for businesses
2 the taxagent September 2010
and their tax agents to see if they
are operating in line with similar
businesses and if they are at risk
of being reviewed or audited by
the ATO.
This financial year, around
110,000 businesses can expect
us to contact them because
their reported income is outside
published benchmark ranges.
Of course, if we find businesses
have legitimate reasons to be
outside the benchmarks, we will
work closely with them and assist
in every possible way. However,
if we find businesses deliberately
using cash transactions to hide
income, we will take firm action.
Our cash economy activities this
year will see the tax affairs of more
than 26,000 micro businesses
reviewed or audited.
Tax practitioners play a vital
role in helping people and
businesses comply with their tax
and superannuation obligations.
Last year we were delighted to
see subscriptions to the monthly
BAS agent newsletter grow
by 1,800 to over 6,800, our
weekly eLink newsletter grow
to over 22,300 subscribers and
the successful transition of the
TAXAGENT magazine to its new
interactive format.
This year we will place particular
emphasis on delivering relevant
information electronically, and
providing timely advice on
emerging issues of concern using
the ‘tax professionals’ segment
of our website, webcasts, email
broadcasts, eLink and seminars.
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 Commissioner’s message continued
Although intermediaries can
use our self‑service products
for routine matters, we can help
them assist their clients on more
complex issues through our
professional‑to‑professional service.
Last year, around 540 tax agents
registered to use the service and
we plan to offer it to more agents
in 2010–11.
The 2010–11 compliance program
has been guided by our new
strategic statement, which sets
out our vision for the future, and
describes our values, strategies,
themes and approaches. More
3 the taxagent September 2010
generally, it seeks to encourage
people to recognise tax and
superannuation as community
assets, where willing and proper
participation is a part of good
citizenship.
This is an aspirational vision that
challenges convention and requires
meaningful change. I look forward to
working with you to implement and
foster this vision across Australia.
Michael D’Ascenzo
Commissioner of Taxation.
 back
To complement the launch of the
Compliance program 2010–11, we
released a webcast that outlines
some key compliance messages
for tax practitioners.
For more information and to access
the webcast, refer to Tax practitioner
webcasts.
|  contents  | next 
 Contents Lifting the lid on
the cash economy
Page 5

News 5–9 n Liftingthe lid on the cash economy n ATO Centenary – commemorative coin and stamp
n The Australian Business Register gets an upgrade n SBR is now open for business
n The fuel tax credit rate for heavy vehicles changed on n Are business systems costing your clients time and money?
1 July 2010
n New guides for taxable non‑profit organisations
n Reportable employer super contributions on
payment summaries

Compliance 10–13 n Continuing to ensure fair’s fair in business n ApplyingDivision 7A – usage of assets
n Targeting tax crime magazine n Watch our webcast to learn more about TOFA
n Avoid common mistakes when reporting partnership n Wickenby gathers momentum
and trust distributions
n Using computer assisted verification (CAV) in
compliance cases

Lodgment 14–17 n Help improve super lodgments
n Claiming income tax deductions for personal
contributions to super funds
n Self‑assessed lodgment deferrals trial
n Concession for paper quarterly BAS lodgments ends soon
n Income tax returns due on 31 October 2010
n New form to request copies of documents
n Choosing PAYG instalment variation codes
n Time to choose PAYG instalments options
n PAYG withholding payment summary annual reports due

New Measures 18–19 n Recent GST law changes cross several boundaries n TFN withholding arrangements for closely held trusts
n Completingtax returns for clients with foreign n The entrepreneurs’ tax offset is now income tested
employment income

SuperANNUATION 20–23 n Reducing illegal activity in self‑managed super funds
n Register SMSFs correctly today to avoid problems tomorrow
n New super clearing house – cutting red tape for
small business
n New super agreement with Poland
n Excess contributions tax and CGT small business concessions
n Taxreturn labels for super co‑contributions
n Consider super in temporary residents’ tax returns
n Super co‑contribution letter

Your Practice 24–25 n Administering the law

n Clarifying
the law
n Professional development opportunities

GST 26 n Correct reporting of property transactions

Profile 27 n Staying on track with work/life balance

More information and feedback 28

4 the taxagent September 2010  back |  contents  | next 

News
Lifting the lid on
the cash economy
Businesses that don’t declare or report all their cash
transactions are more likely to hear from us than ever before.
This financial year, we
will contact approximately
110,000 taxpayers via mail
who may be participating in
the cash economy.
The letters support our strategies to
deal with under‑reported or omitted
income, and cash transactions used
to hide or evade tax obligations.
They also notify business taxpayers
that they have been identified using
one of our cash economy indicators
such as:
■■ small business benchmarks
■■ data matching
■■ allegations of tax evasion reported
to us by the community.
The majority of letters we send
will be to businesses we identify
as reporting outside the small
business benchmarks for their
industry.
5 the taxagent September 2010
NEWS
They will provide important What this means for you
information about: If you are a registered tax agent
■■ how their business transactions of a business taxpayer we identify,
compare with key benchmark we will write to you to advise we
ratios have contacted your client.
■■ the way we select businesses
You can help your client by
for audit or review
■■ how we use benchmarks to
assisting them to review their
calculate default assessments records, returns and income,
and to use the form enclosed
■■ how to correct their mistakes
with your client’s letter to advise
or make voluntary disclosures.
us if a mistake has been made.
We encourage taxpayers to review
their records to ensure they have For more information, refer to:
n Cash economy letter program
correctly reported all income,
n Small business benchmarks
especially cash transactions.
to find out how the small business
benchmarks can help businesses
We recently sent around 8,000 meet their tax obligations.
letters to businesses that reported
transactions outside the small
business benchmarks for their
industry. From this, we received
valuable feedback, which we are
incorporating into the way we use
benchmarks to identify businesses
for audit or review.
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The Australian Business
Register gets an upgrade
The Australian Business Register
(ABR) will be upgraded to a
new system platform by early
2011 to allow it to offer business
registration services on behalf of
other government agencies. This
will include a business names
transaction the ABR will host on
behalf of the Australian Securities
and Investments Commission
in 2011.
Other enhancements to the ABR
will include:
■■ A streamlined process –
if you identify yourself as a tax
professional during login, there will
be fewer screens to navigate when
updating your clients’ records.
6 the taxagent September 2010
NEWS
The fuel tax
■■ Partitioning of registrations –
all registrations will be provided credit rate for
heavy vehicles
as separate options within a single
transaction. After completing each
registration, you will be taken to a
new ‘My registrations’ page showing
what you have already completed changed on
1 July 2010
and what you can still apply for.
■■ An exit summary screen –
after finalising your clients’
business registration activities,
you will be presented with an exit From 1 July 2010, the fuel tax A heavy vehicle is either of the
credit rate for fuels such as diesel following:
summary screen showing you
what was registered for and the or petrol for use in heavy vehicles ■■ a vehicle with a gross vehicle
status of each registration. on public roads was reduced to mass (GVM) of greater than
15.543 cents per litre. This change 4.5 tonne
■■ A save and exit function – is due to an increase in the road
when registering for an ABN on ■■ a diesel vehicle acquired before
user charge.
behalf of a client, you will only 1 July 2006 with a GVM equal
be given a reference number to 4.5 tonnes or more.
and asked for a password if you Remember to use this new rate
decide to save and exit before when you complete a business To substantiate their claims, your
completing the application. activity statement from 1 July 2010 clients will need to keep records
for any client affected by the road showing they acquired the fuel
■■ Real time address validation – and how they used it. Acceptable
user charge increase.
business and postal addresses records include fuel dockets,
will be matched against Australia invoices and log books.
Post records for all new ABN
registrations. If the address does
not match, you will be asked to For more information, refer to Fuel tax
select the appropriate address credits rates and eligible fuels.
from a drop down list.
■■ Re‑designed transaction screens
– screens will be redesigned to
make them easier to use.
We have co‑designed the ABR
enhancements with tax professionals
and businesses of all sizes.
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 er mutual
organisation

Mutuality
s

a Guide to c
taxable in nd tax return ompany
come fo NEWS
This guide
explains the
non‑profit r
organisati
societies and principle of
associations mutualit
calculate their y and helps non-prof
taxable inco
me.
it clubs,
2010 ons
To help you
complete the
company tax
return for 1
Explains som July 2009
e – 30 June
2010
taxable non‑ common errors and
profit club their conseque
s, societies
and associati nces for
ons

Use this guide Use this guide

if you

New guides for taxable

are involve involved in if you are
d in Use the Subsc
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n of a taxable www.ato.gov ribe link on of a taxable
non‑profit
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organisation. to receive t instructions tax return
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free email
update 2010 and www.ato.gov ribe link on
issues affectin s the guide
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non‑profit
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non‑profit organisations NAT 73436-0

7.2010

NAT 73512‑0
6.2010

We recently released two new
guides for taxable non‑profit clubs,
societies and associations – that is,
non‑profit organisations that are not
exempt from income tax.
Only certain types of non‑profit
organisations are exempt from
income tax. Others are taxable,
including organisations that have
mutual dealings with members.
Mutuality and taxable income
(NAT 73436) explains the principle
of mutuality and helps these
non‑profit organisations: non‑profit organisations complete We will update the guide each year
■■ work out if they need to lodge the Company tax return 2010 to accompany each income year’s
an annual income tax return (NAT 0656). It explains: company tax return.
■■ calculate their taxable income, ■■ some common errors made
including how to treat mutual when completing the return
Guide to company tax return for
dealings with their members. and the consequences of
non‑profit organisations 2010
these errors (NAT 73512) should be read in
■■ how to complete related conjunction with the following:
To order a printed copy of this guide, phone
1300 720 092 and quote its full title. labels on the return correctly, n Mutuality and taxable income
including a worked example (NAT 73436)
that uses figures from case n Company tax return instructions
Guide to company tax return study 2 in Mutuality and 2010 (NAT 0669).
for non‑profit organisations taxable income (NAT 73436).
2010 (NAT 73512) helps taxable

Reportable employer super contributions on payment summaries

There is a new label on the 2009–10
payment summary for reportable
employer super contributions.
If you have employer clients who
have not yet prepared their 2009–10
payment summaries, when they do
so, they must:
■■ not include compulsory super
amounts, such as
– super guarantee contributions
– super contributions made
because of an award
or industrial agreement
■■ include all reportable employer notify their employees and issue
super contributions, such as them with amended payment For more information about:
– contributions they make for summaries. If they have already n reportable employer super
their employees under a salary lodged their payment summary contributions, refer to Employer
guide for reportable employer
sacrifice arrangement annual report with us, they will
superannuation contributions.
– additional employer super also need to lodge an amended
n completing the payment summaries,
contributions they make for annual report.
refer to How to complete the PAYG
their employees. If you have individual clients who payment summary – individual
If you have employer clients have payment summaries with non‑business form.
incorrectly included compulsory n the income test changes, refer to
who have already issued payment
super amounts, they will need to the Income tests.
summaries to their employees that
incorrectly include compulsory notify their employer and obtain
super amounts, they will need to an amended payment summary.

7 the taxagent September 2010  back |  contents  | next 


ATO Centenary –
commemorative coin and stamp
A commemorative coin and
stamp was released this year
to mark the centenary of the
ATO in November 2010.
Tax agents and the ATO have a
long history of working together
to ensure all Australians know
and understand their rights,
and are able to fulfil their
tax obligations easily and at
minimal cost. Together, we
have also co‑designed better
tax administration systems and
processes that have benefited
all Australians. The imagery
and messages that appear
on the coin and stamp typify
how this significant relationship
has contributed to Australia’s
development.
The Royal Australian Mint is
recognising this milestone with
a circulating 20 cent coin. The
coin was co‑designed by
8 the taxagent September 2010
the ATO in consultation with
representatives of the Australian
community.
Australia Post released the
commemorative stamp in
late July 2010, which depicts
working Australians in different
industries. It was designed
by an artist commissioned by
Australia Post and includes
design elements from the including the ATO.
ATO Centenary.
Both the coin and the stamp
contain the phrase ‘Working
for all Australians’. The phrase
recognises the role of the
ATO since the early years of
Federation in helping to shape
the Australian social and
economic landscape as we
know it today.
Collectors can obtain a limited
edition coin and stamp package
from Australia Post outlets.
NEWS
SBR is now
open for business
Standard Business Reporting (SBR) payroll records. This means less
now offers Australian businesses, time spent analysing, gathering the
accountants, bookkeepers, BAS required information and rekeying
agents, tax agents and payroll data, reducing the potential
professionals a quicker and simpler for error and costly
way to prepare and lodge reports reworking.
to government organisations,
Software providers are
progressively SBR‑enabling
software and forms. Depending
on the software you use, you can
prepare and lodge tax file number
declarations, pay as you go
payment summaries and activity
statements to us directly from
your software, secured by the
single sign‑on – AUSkey. You
also obtain a receipt in real time.
SBR is an addition to the existing
online services we offer, giving
you more options to help your
clients meet their tax obligations.
SBR also makes information
sharing between you and your For more information about SBR, visit
clients easier, as data is clearly www.sbr.gov.au
defined and linked to financial/
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Are business systems costing
your clients time and money?
Your clients can save time and
money by conducting regular
health checks on their reporting,
accounting and business systems.
Poorly maintained or failing goods and
services tax (GST) recording systems often
result in incorrect GST reporting. We refer
to this as an ‘integrity of business systems’
(IBS) risk and clients in the small‑to‑medium
enterprise (SME) market are particularly at risk.
We recommend you encourage your SME
clients to focus on their business systems
to ensure they aren’t costing unnecessary
time and money. Our experience tells us that
SME clients should be particularly vigilant in
circumstances where a business is:
■■ growing rapidly
■■ restructuring
■■ going through a merger or demerger
■■ installing new accounting software
■■ experiencing a change in accounting staff.
9 the taxagent September 2010
NEWS
Effective, up‑to‑date systems can provide
a range of benefits to your SME clients,
including:
■■ reducing compliance costs and
adding value to their business
through correct reporting
■■ offering certainty for growing or
changing businesses
■■ better cash flow management
■■ getting the correct GST credits
■■ confidence that ‘one‑off’ transactions
are treated correctly
■■ fewer errors resulting in reduced downtime
with staff or system changeover
■■ providing your clients with confidence
that they are reporting correctly.
We’ve recently released a new guide entitled
GST and the integrity of business systems
to help you and your SME clients when
reviewing systems. The guide includes a
checklist of things to do to avoid the risk,
case studies and other information about:
■■ key industries at risk
■■ why systems errors occur For more information about GST and IBS risks or to
■■ how we identify businesses at risk obtain a copy of our new guide, refer to GST and the
■■ where to go for more information integrity of business systems.
and assistance.
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Compliance
Continuing to ensure
fair’s fair in business
In 2009, the Level Playing Field project
was initiated to ensure employers don’t
gain an unfair competitive advantage
by evading their withholding and super
guarantee responsibilities to their
workers. After the first full year of audit
work, our level playing field teams have
raised significantly more revenue than
they first expected.
To support their compliance, we
provide employers with a range of
assistance, including information, tools
and calculators to make it easy for them
to get it right. When businesses start to
experience difficulties, we want them to
contact us as soon as possible to work
out a better and fairer way to address
their financial problems.
We also monitor compliance and
intervene where necessary to help
businesses get their compliance back
on track. We select audit candidates
based on industry intelligence, data
analyses and referrals from within the
ATO and the general community.
10 the taxagent September 2010
To be sure your clients are compliant
and have peace of mind, we urge you
to ensure they:
■■ register for pay as you go (PAYG)
withholding as soon as they believe
they need to withhold
■■ use the employee contractor decision
tool to clarify any ambiguities about the
status of a client’s workers
■■ are familiar with the types of payments
they need to withhold from
■■ check that their bookkeepers can
correctly work out the amount to
withhold – you can refer them to
PAYG withholding essentials
■■ report and pay the amounts they
withhold to us
■■ provide payment summaries to their
workers and lodge an annual report
at the end of each income year.
If your clients are aware of any
competitors who are not complying
with their PAYG obligations, encourage
them to refer the issue to the Tax
Evasion Referral Centre by phoning
1800 060 062.
For more information, visit
www.ato.gov.au/reportevasion
COMPLIANCE
Targeting
tax crime
magazine
Keep an eye out for the latest
edition of the Targeting tax crime –
A whole‑of‑government approach
online magazine.
The magazine is a convenient way
to understand tax crime issues and
help you provide accurate advice to
your clients.
This edition contains the latest
information about tax evasion,
avoidance and crime. It also features
what agencies are focusing on and the
improved data collection capabilities
they use to catch people who are
avoiding paying their fair share.
The magazine has lots of interesting
case studies that show the risks and
consequences for those who think
they can avoid their tax obligations.
Subject areas include identity crime,
illegal early access to super, Wickenby
getting results and AUSTRAC’s efforts
to educate businesses about how
criminals may misuse them to commit
offences such as drug trafficking and
money laundering.
Access the latest edition of
Targeting tax crime online.
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 COMPLIANCE

Avoid common mistakes when reporting

partnership and trust distributions
With your help, we have developed a new
publication entitled Partnership and trust
distributions – common mistakes to avoid.
This publication helps address a number of
mistakes taxpayers commonly make when reporting
partnership and trust distributions on their tax
returns. It will also help you with:
■■ lodgment issues
■■ completing the statement of distribution
■■ reporting tax file numbers
■■ disclosing partnership or beneficiary income
■■ reporting distributions for individuals
■■ exceptions for trusts
■■ reporting losses.
For more information about how to correctly
complete partnership and trust tax returns
and labels in the individual tax return, refer to:
n Partnership tax return instructions 2010
n Trust tax return instructions 2010
n TaxPack supplement 2010.

Using computer assisted verification

(CAV) in compliance cases
If your clients keep electronic
financial records, as part of our
compliance activities, we may use
CAV techniques to analyse these
records to reduce:
■■ the amount of time we spend
at a taxpayer’s premises
■■ the amount of paper copies of
transactions we need
■■ costs.
If we intend to use CAV as part
of a compliance activity, we will
schedule a meeting with your client
to discuss:
■■ the type of accounting system
they use
■■ the format of their electronic
records
■■ any relevant documentation
they have that may help us with
our analysis, such as chart of
accounts.
We will ask your client to save
copies of the mutually agreed
electronic information to a virus‑free
CD, DVD or other agreed medium.
We can provide disks for this
purpose if required.
As part of our interview with your
client, we may ask about the
internal controls they use to help
assess the integrity of the electronic
data their system produces. We may
also verify their data by comparing
it with data produced by other
systems, such as point‑of‑sale
(POS) systems.
We use specialised CAV software
to verify the electronic information
provided is accurate and complete.
We also conduct a series of tests on
the information to ensure it complies
with the relevant tax laws. Some
common problems we find while
verifying electronic data include:
■■ duplicate invoices
■■ incorrect coding of transactions
■■ inconsistent trading patterns
■■ flawed internal controls
■■ mistakes as a result of manual
intervention.
As part of the CAV process, your
clients must provide a copy of the
electronic information we need – our
staff will not operate their computer
systems. Though our CAV software
will read the electronic information
they provide, it does not allow
any changes to be made to that
information.
For more information, refer to Computer
assisted verification.

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Applying Division 7A –
usage of assets
From 1 July 2009, the
non‑commercial loan rules in
Division 7A were tightened. This
means that the value of benefits
private companies provide to their
shareholders or associates through
the use of company assets, such
as houses and cars, may now be
taxable as a deemed dividend if
they provide them for:
■■ free
■■ less than their market value.
Under Division 7A, the term
‘payment’ now includes providing
an asset for use by an entity. Before
these changes, only transfers of
property were taxed. A transfer of
property occurs if ownership of the
asset is transferred or there is a
lease of real property.
12 the taxagent September 2010
COMPLIANCE
If you have private company clients,
Watch our
we recommend you advise them
to review all use of their assets to
work out if Division 7A applies. If
webcast to learn
a Division 7A payment arose in
the 2010 income year, it can be
converted to a loan before the
company’s lodgment day for the
2010 income tax return.
The amount of a payment is the
more about TOFA
We have recently released a new webcast
amount that would have been paid
for the asset by parties dealing providing an overview of the new Taxation
at arm’s length, less any amount
actually paid. of Financial Arrangements (TOFA) rules.
The use of an asset will not be a The webcast runs for about 30 minutes and will
payment if it is covered by one of help you work out whether the TOFA rules do or can
the following exceptions: apply to you or your clients, and what the effects of
■■ minor use of certain company
the rules are.
assets
In addition to the webcast, we have also published a
■■ certain payments that would range of other information to help you and your clients
otherwise be allowable as a once apply the TOFA rules on a day‑to‑day basis.
only deduction
■■ the use of certain dwellings,
subject to certain conditions. For more information about the TOFA rules and
to view the webcast:
n visit www.ato.gov.au/tofa
For more information about the
n email our TOFA team at tofa@ato.gov.au
exceptions or the definition of ‘payment’,
refer to Division 7A – payments by
private companies.
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Wickenby gathers momentum
Wickenby, the multi‑agency
taskforce that investigates
abusive secrecy haven
schemes, has raised over $850
million in tax liabilities. Also,
because of Wickenby:
■■ 57 people have been
charged with serious offences
■■ more than 1,400 audits and
reviews have been completed
■■ nearly 600 audits are
currently in progress
■■ 24 criminal investigations are
underway.
13 the taxagent September 2010
Continued government support
to tackle schemes that threaten
the integrity of the tax system
means Wickenby isn’t going
away any time soon.
Wickenby’s success can be
seen in recent convictions and
significant jail terms:
■■ Two Gold Coast
businessmen were sentenced
to six and a half years jail
each for conspiring to
defraud the Commonwealth
of more than $2 million. Both
will serve a minimum three
years and nine months.
■■ A Perth accountant was
sentenced to three years
and three months with a
minimum 13 months to
serve for his involvement
in illegally conspiring with
others to evade paying
between $25.78 million and
$27.68 million in tax.
Wickenby is watching
The firm approach taken by
the courts is best summed up
by recent judicial sentencing
remarks:
■■ It’s ‘of the first importance
that others similarly
placed appreciate that the
consequences of involving
themselves in these sorts
of deceptive manoeuvres
will be severe’.
■■ One of the most important
factors when sentencing is
‘the need to impose a
sentence, which will deter
others from similar conduct’.
Is Wickenby watching? You bet
it is. If you think you or one of
your clients may have become
involved in an illegal scheme,
or have unreported income,
act now, before we do.
COMPLIANCE
The Offshore Voluntary
Disclosure Initiative (OVDI)
closed on 30 June 2010.
However, taxpayers can still
come forward and make a
voluntary disclosure to us if
they have lodged incorrect
tax returns or statements. By
doing so, they can benefit from
reduced penalties and a far
lesser chance of being subject
to a criminal investigation.
For more information about:
n what taxpayers need to do to
make a voluntary disclosure,
refer to voluntary disclosure
overview
n project Wickenby, refer to
Project Wickenby – is it
worth the risk?
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Lodgment
Help improve
super lodgments
We need your help if you have super
fund clients with overdue returns.
We are focusing on super funds that have
failed to meet their lodgment obligations.
As a tax agent, you play a vital role in
influencing and helping support our
tax and super system by making sure
your clients understand their rights and
obligations.
Even after our reminders, some funds super funds that fail to lodge overdue super
still fail to lodge their annual returns.
These funds will be the focus of our
attention for further compliance and
prosecution action, so we are seeking
your help to ensure these clients lodge
their overdue returns immediately.
Lodging annual returns is a key
compliance obligation for all super funds,
regardless of their income. To help them
avoid compliance action, we recommend
you ensure your super fund clients have
their lodgment obligations up-to-date.
We have also started making some
funds with a poor compliance history
non-complying, and raising default
assessments.
If you have super fund clients who are not
meeting their lodgment obligations, you
may have received either of the following:
■■ a visit from one of our relationship
managers
■■ a letter from us reminding you
to lodge overdue super returns
14 the taxagent September 2010
LODGMENT
Claiming income
tax deductions for
personal contributions
to super funds
We may also After recently matching – the day you lodged
contact your clients contribution data we received their income tax return
directly to remind from super funds with individual – 30 June 2011 for the
them to lodge their and partnership returns, we’ve 2009–10 income year
overdue super returns. identified some common errors ■■ your client has an
individuals make when claiming acknowledgment notice
We may take further compliance action against income tax deductions for their from their fund.
personal super contributions.
returns, which may include: In particular, many individuals: Record the deduction
n prosecuting them ■■ fail to meet the notification at the right label
n making them non-complying requirements
Personal super contributions
n raising default assessments for them. ■■ incorrectly claim their
are not work‑related expenses.
contributions as business This means they can only be
Non-complying funds are subject to or partnership expenses. claimed in the supplementary
serious taxation consequences, including: Because of this, we will focus section of the individual income
■■ losing their concessional tax treatment tax return at label D13 for the
more on these claims for the
■■ having all their income taxed at the 2009–10 income year, not
2009–10 year.
highest marginal rate – currently 45% at any other label or through
■■ having all their assets (less any Before you claim an income any associated entity or
contributions the fund has received tax deduction for your clients’ partnership.
that are not part of the taxable income personal super contributions,
of the fund) taxed at the highest check whether:
Remember, your clients will
marginal rate. ■■ your client gave a notice of
be eligible for an income tax
intention to claim a deduction
Non-complying funds continue to be deduction for their personal super
taxed at the highest rate until we reinstate to their fund in the approved contributions if they:
their complying status. form before the earlier of n receive an acknowledgment
notice from their fund
n complete label D13.
To avoid prosecution and default assessment
action being taken, make sure your super fund
clients lodge their prior year returns immediately.
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Self‑assessed lodgment deferrals trial
A new initiative of the Lodgment
Program 2010–11 enables you to
submit self‑assessed lodgment
deferral requests up to three days
after the lodgment due date. We
listened to your feedback that you
wanted more flexibility around when
to request lodgment deferrals. This
initiative will be trialled for 12 months
and we will monitor tax agent use
of, and adherence to, the new
approach.
Under the trial, self‑assessed
lodgment deferral requests from tax
agents are acceptable only where
both of the following apply:
■■ they meet the self‑assessed
lodgment deferral criteria
Concession for paper quarterly
BAS lodgments ends soon
If you currently lodge your
clients’ quarterly business activity
statements (BAS) via paper, there
are some changes of which you
need to be aware.
One of the changes in the Lodgment
Program 2010–11 is the removal
of the two‑week ‘standard agent’
concession if you lodge via paper.
This concession will no longer be
available from the beginning of
quarter three – 1 January 2011.
15 the taxagent September 2010
■■ they are submitted on the
self‑assessed lodgment deferrals
form through the Tax Agent Portal.
We will monitor how well tax agents
comply with the lodgment deferral
conditions during this period, though
we anticipate only genuine deferral
requests will be made.
Remember, deferral requests can only be
calculated for a period from the original
lodgment due date, not the date we
receive the request.
For more information, refer to Lodgment
Program 2010–11 – additional time to lodge.
However, this change does not affect
the current four‑week lodgment and
payment concession for quarterly
BAS you lodge electronically.
Your clients may be eligible for a two‑week
deferral of their quarterly BAS due date
if they lodge online – refer to Terms and
conditions – two week deferral offer.
For more information, refer to Lodgment
Program 2010–11 – details of the program.
Income tax
returns due on
31 October 2010
Your clients’ 2010 income tax
returns are due on 31 October
2010 if:
■■ they have one or more prior year
income tax returns outstanding
as at 30 June 2010
■■ they were prosecuted for
non‑lodgment of income tax
returns in 2009–10, unless you
have been given an alternative
lodgment date
■■ they were prosecuted for
non‑lodgment of income tax
returns in 2008–09
■■ you have not lodged your
authority to act on their behalf
for income tax purposes by
31 October 2010.
When will your clients
receive the benefit of
your lodgment program?
For clients with outstanding
prior year returns
If your client lodges all their
outstanding prior year returns by
31 October 2010, we will reset their
2010 income tax return due dates to
your lodgment program due dates.
LODGMENT
Remember, reset lodgment due dates
can take up to three weeks to appear
on your client list.
For prosecuted clients
If you have clients who have been
prosecuted for non‑lodgment, their
future years’ tax returns will be
due as per the normal lodgment
program, if they lodge:
■■ by the revised due date imposed
for at least two years
■■ all of their following income tax
returns on time.
For new income tax clients
If you take on any new clients,
you must advise us by 31 October
2010 that you have been appointed
as their tax agent if they do not
appear on your client list in the
electronic lodgment service (ELS) or
the Tax Agent Portal. You can add
the client to your list by using the
ELS client update form or through
the portal ‘Add Client’ facility.
For more information, refer to
Lodgment Program 2010–11 –
details of the program.
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Self
New form
to request
copies of
documents
We have developed a new form
entitled Copies of returns request
– individuals and authorised
representatives to make it easier
for you to request copies of your
clients’:
■■ lodged tax returns
■■ notices of assessment
■■ group certificates or payment
summaries.
To submit your request, complete
the form on‑screen and then print
it, sign it, and post or fax it to us.
There is no fee for electronic
record requests, though a $10
administrative fee applies for each
original paper return you request.
However, we can waive this fee if it
would cause financial hardship.
We aim to respond to all requests
for copies of documents within
28 days of receiving them.
16 the taxagent September 2010
Choosing
PAYG
instalment
variation
codes
If you are varying PAYG
instalments to reflect a client’s
change of circumstances,
you need to include a reason
code at label T4 on the activity
statement or instalment notice.
Remember to use the code
that best describes why the
instalment amount or rate has
been varied.
For a complete list of variation
codes, refer to PAYG instalment
variations – reason codes.
For more information about varying
PAYG instalments, refer to How
to vary pay as you go (PAYG)
instalments.
Time to choose PAYG
instalments options
In quarter one, many
taxpayers can choose the
PAYG instalments reporting
and payment option that
best suits their needs.
They can choose either of the
following options on their activity
statement:
■■ option 1 – to pay the instalment
amount we work out for them
■■ option 2 – to calculate their
own PAYG instalment amount
by multiplying their business
and investment income by the
instalment rate we provide.
Some clients may also be eligible
to choose to pay their instalments
annually.
Eligible clients must notify us of their
choice by the due date for their first
quarter activity statement. If they
don’t make a choice, they will need to
pay the amount we work out (option
one) for the remainder of the year.
LODGMENT
Once your clients choose a
reporting option, they must continue
to report and pay their instalments
using this option for the rest of the
income year.
If you have clients whose only
obligation is a PAYG instalment,
they will receive an instalment notice
in quarter one. This does not offer
the choice to calculate their own
instalment (option two). If these
clients wish to pay instalments
based on their instalment rate, ask
us to send out an activity statement
so that your client can choose
option two by phoning us on
13 72 86 and using Fast Key Code
1 4 1. You should do this by the
date the instalment is due.
For more information about how to
choose a reporting option, refer to PAYG
instalments – how to complete your
activity statement.
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 LODGMENT

PAYG withholding payment

summary annual reports due
By now, your clients in the following categories must have
PAYG withholding where ABN not quoted 31 October 2010
lodged their pay as you go (PAYG) withholding payment
annual report (NAT 3348)
summary annual report:
■■ large withholders (annual withholding greater than $1 million) For payers who withheld an amount from
■■ payers who have no agent involvement in preparing the report. payments for goods and services where
a payee did not quote their ABN. These
If these reports weren’t lodged by 14 August 2010, a failure to amounts are reported at label W4 of the
lodge penalty may apply. activity statement.
Other PAYG withholding annual reports PAYG withholding from interest, 31 October 2010
lodgment due dates dividend and royalty payments paid to
non‑residents – annual report (NAT 7187)
Description Lodgment end date
For payers who withheld amounts from
PAYG withholding payment summary Due date of payer’s payments of unfranked dividends, interest
annual report – Closely held entities income tax return (not reported on an annual investment
For payers, including personal services income report) and royalties to non‑residents.
income (PSI) entities who have agent These amounts are reported at label W3 of
involvement in preparing the report and have the activity statement.
both of the following:
PAYG withholding annual report – 31 October 2010
■■ only closely held payees
payments to foreign residents (NAT 12413)
■■ met the criteria for the closely held
lodgment concession. For payers who withheld amounts from
payments made to foreign resident payees
PAYG withholding payment summary 30 September 2010 involved in entertainment or sports activities,
annual report – Other entities with agent construction and related activities, and
involvement arranging casino gaming junket activities.
For payers who have agent involvement in These amounts are reported at label W3 of
preparing the report and have one of the the activity statement.
following:
■■ one or more arm’s length payees
■■ only closely held payees but do not meet For more information, refer to:
n Reporting requirements – changes for the 2009/10 income year
the criteria for the closely held lodgment
n Lodgment Program 2010–11.
concession.

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New Measures
Recent GST law changes
cross several boundaries
On 1 July 2010, a number of changes to GST,
other indirect taxes and excise came into effect.
Rulings
The general ruling system has been
expanded to include excise, GST,
luxury car tax and wine equalisation
tax. These changes are intended
to reduce compliance costs for
taxpayers by providing more
consistent rules across different
taxes. This means:
■■ there will be more rules in
common for both private and
public rulings across taxes
■■ taxpayers will also have the right
to object to private indirect tax
and excise rulings in specific
circumstances
■■ the range of publications
considered to be public indirect
tax rulings has changed – for
example, fact sheets, booklets
and guides are now guidance
materials and no longer legally
binding.
18 the taxagent September 2010
For more information refer to:
n Adopting the general rulings system
for indirect taxes and excises –
frequently asked questions
n Adopting the general rulings system
for indirect taxes and excise –
overview
n Changes to GST public rulings as a
result of the Board of Taxation (BoT)
recommendations
n the updated industry issues registers
on our website by searching using
the term ‘Issues register’
n Changes to Wine Equalisation Tax
(WET) rulings from 1 July 2010
n Changes to excise advice from
1 July 2010
n ATO Media release – Legislation
expands tax rulings regime.
Tax invoices
The amount of information required
on tax invoices and recipient
created tax invoices (RCTI) has been
relaxed. This will affect anyone who
either issues tax invoices or RCTIs,
or relies on them to claim GST input
tax credits or fuel tax credits.
For more information refer to:
n Changes to tax invoices and
recipient created tax invoices –
frequently asked questions
n Changes to tax invoices and
recipient created tax invoices –
overview.
GST groups and joint ventures
Entities can self‑assess their
eligibility to form and make changes
to a GST group or GST joint venture
at any time during a tax period.
They can also enter into indirect
tax sharing agreements.
For more information refer to:
n GST groups and GST joint ventures
n Indirect Tax Sharing Agreement (ITSA).
NEW MEASURES
Completing tax
returns for clients
with foreign
employment
income
If you have clients with a PAYG
payment summary – foreign
employment, you may need to
complete the following items on
their income tax returns:
■■ salary and wages – item 1
■■ work‑related expenses that they
incurred in earning the foreign
income – items D1 to D5
■■ reportable fringe benefits and
reportable employer super
contributions (if required) –
items IT1 and IT2
■■ foreign source income and foreign
assets or property – item 20 labels
– U – Net foreign employment
income – payment summary
– O – foreign income tax offset.
For more information, refer to:
n Foreign employment income and
23AG – employers
n Foreign employment income and
23AG – employees.
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TFN withholding arrangements
for closely held trusts
The tax file number (TFN)
withholding rules now
apply to closely held trusts,
including family trusts, from
the first income year starting
on or after 1 July 2010.
Under the rules, trustees
of closely held trusts must
withhold from payments they
make to most beneficiaries
where they have not
provided their TFN to the
trustee. Some beneficiaries
are excluded from the
measure.
We have developed
transitional arrangements to
help trustees meet their TFN
reporting obligations for the
first income year that starts
on or after 1 July 2010.
Trustees will be able to meet
their TFN reporting obligations
for the 2011 income year
when lodging their 2010 trust
income tax return. They must
also ensure they provide their
Unlike other TFN withholding rules,
beneficiaries who receive various
pensions and benefits are included under
these arrangements. This means trustees
must withhold from payments they make
to pensioners who don’t provide their TFN.
19 the taxagent September 2010
beneficiaries’ details (including
their TFNs) in full in the
statement of distribution.
Trustees must report their
beneficiaries’ details in a TFN
report for the fourth quarter
of the year if either of the
following applies:
■■ they don’t have to lodge
a 2010 trust income tax
return
■■ they receive a TFN from
a beneficiary after lodging
their 2010 trust tax return.
For normal balancing trusts,
the TFN report due date will
be 31 July 2011.
Trusts should only register
for these rules if they have a
withholding obligation. The
administrative arrangements
for registration are still being
developed and further
information will be published
on our website once these
are determined.
More information, refer
to TFN withholding
for closely held
trusts.
The entrepreneurs’
tax offset is now
income tested
Recent changes to
the law introduced
an income test for
individuals claiming
the entrepreneurs’
tax offset (ETO).
The changes apply
for income years
starting on or after
1 July 2009.
The new income test takes
into account other income
of the individual and their
spouse, such as salary and
wages, in addition to total
reportable fringe benefits
amounts, reportable super
contributions and net
investment loss.
What are the changes?
The amount of ETO
individuals can receive
for their sole trader or
partnership activities, or
as beneficiaries of a trust,
is reduced if their income
for ETO purposes exceeds
the following income test
threshold:
■■ $70,000 if they are
single with no qualifying
dependant
■■ $120,000 if they had
either of the following
– a spouse on the last
day of the income year
– a qualifying dependant
on any day during the
income year.
If an individual does not
meet the income test, their
offset will be reduced by
20 cents for each dollar their
income for ETO purposes
exceeds the threshold. This
reduction is in addition to
the phase‑out that begins
where their aggregated
turnover exceeds $50,000.
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NEW MEASURES
What you need to do
For the 2009–10 and later
income year returns, you
need to:
■■ work out your client’s
income for ETO purposes
before claiming the ETO
■■ alert your clients of the
changes to the eligibility
criteria
■■ complete the new labels
in your client’s tax return
if claiming the ETO
– relevant Income tests
and Spouse details
labels
– marital status code
at T13.
For more information:
n refer to
– Entrepreneurs’ tax offset
– Concessions for small
business entities
(NAT 71874)
n phone us on 13 72 86 and
use Fast Key Code 2 1 3.
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 Superannuation Superannuation

Reducing Register SMSFs

correctly today
illegal activity to avoid problems
in self‑managed tomorrow
super funds
Registering a immediately after
self‑managed registration.
super fund (SMSF)
is a relatively simple By following these
process, but incorrect tips, you can avoid:
We are focusing on improving identify and prevent illegitimate the rollover is a member of the registrations can ■■ delays in being
the self‑managed super fund SMSFs from operating SMSF, reducing the risk of illegal cause future problems registered and
(SMSF) registration and super and appearing on SFLU. activity. for yourself, the unnecessary
rollover process to reduce fund trustees and contact from us
In May 2010, we refreshed This service will provide SMSFs
the risk of super being illegally members, and us. ■■ delayed publication
SFLU. As part of the with more security in the super
accessed through SMSFs. of the SMSF on
refresh, we introduced rollover process. Use the following
In January 2010, a range of a new domain name – tips to avoid some www.superfund
Any changes to your clients’ lookup.gov.au
changes were introduced to www.superfundlookup.gov.au common registration
details may take up to 28 days stopping rollover
the SMSF registration process. – improved usability and errors:
to process, so your clients need requests
These changes included updated its technical content. ■■ Do not register
to take this into account if they
completing a risk assessment the SMSF as a ■■ potential delays
Later this year, we will want to roll their money into
on all new SMSF trustees and non‑regulated fund in large funds
implement an SMSF member an SMSF.
the use of a new ‘Registered – (NRF) at question 1. processing
verification service that will
status not determined’ status in ■■ Elect to be a rollover requests
provide greater transparency
Super Fund Lookup (SFLU). For more information: regulated fund if the member is
around rollovers from
As a result of these changes, APRA‑regulated super funds n refer to Super funds and illegal at question 31. unknown to us
it currently takes up to seven into SMSFs. APRA‑regulated early release schemes ■■ Accurately list ■■ being taxed at
days before an SMSF appears super funds making a rollover to n visit www.ato.gov.au/ the 45% tax rate
all member and
on SFLU. This provides time for an SMSF will be able to check superschemes trustee names on instead of the
us to assess the trustee and that the member requesting the form. concessional
■■ List yourself as 15% rate
the SMSF’s tax ■■ being unable to
Before completing a rollover to any SMSF with We recommend ensuring the membership details we have for
your clients’ SMSFs are correct, especially if they have added agent through the lodge the SMSF’s
the new ‘registered’ status, many Australian
Prudential Regulatory Authority (APRA) regulated new members. Tax Agent Portal annual return.
super funds will undertake additional checks to If your clients’ membership details are incorrect, it may be harder
ensure the SMSF is legitimate. and take longer for them to roll over their money into their SMSF. To correct an error or omission that has already
These funds may request additional To update your clients’ details with us, refer to Change of details occurred, lodge a Change of details form.
documentation for this purpose. for superannuation entities.

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New super clearing
house – cutting red
tape for small business
A free super clearing house service is
being offered to small businesses with
less than 20 employees.
This service is optional and is
designed to reduce red tape
and compliance costs for
small businesses to help them
meet their super guarantee
obligations.
The Small Business
Superannuation Clearing
House is administered by
Medicare Australia and
lets employers pay their
super contributions to a
single location in one simple
electronic transaction.
Small businesses that
register to use the service will
have their super guarantee
Small businesses can register online for the service by:
n visiting the Medicare Australia website at www.medicareaustralia.gov.au/super
n phoning Medicare Australia on 1300 660 048.
21 the taxagent September 2010
obligation discharged, as long
as all of the following apply:
■■ they pay the correct amount
■■ they pay by the super
payment cut‑off date
■■ the payment is accepted
by the clearing house
■■ the payment is not rejected
by the super fund.
Employers who receive an
employee’s choice of fund
nomination will have their
choice obligation discharged
if they pass the information
to the clearing house within
21 days of receiving the
choice of fund nomination.
New super agreement
with Poland
A new bilateral
agreement with Poland
will start on 1 October
2010, removing the
issue of double super
coverage.
Double super coverage Germany, Ireland, Japan,
occurs when an employee
works temporarily in another
country and that country, as United States of America.
well as Australia, requires super
(or equivalent) contributions to
be made for the employee.
Employers will be exempt from
making compulsory super (or
equivalent) contributions for
For more information or to apply
online for a Certificate of coverage,
refer to Bilateral agreements – what
are my super obligations when my
employee is working overseas?
Superannuation
employees sent to work in
Poland, provided the employer
continues to make compulsory
super contributions under
Australia’s super guarantee law.
Australia also has bilateral
super agreements with Belgium,
Chile, Croatia, Finland, Greece,
Korea, the Netherlands, Norway,
Portugal, Switzerland and the
To help your employer
clients take advantage of
these agreements, advise them
to apply to us for a Certificate
of coverage before their
employee departs Australia.
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Excess contributions tax
and CGT small business
concessions
Individuals can exclude
certain super contributions
from their non‑concessional
contributions cap, up to
their super CGT cap, if they
arose from certain small
business capital gains tax
(CGT) concessions.
They can elect to exclude:
■■ up to $500,000 of capital gains
that have been disregarded under
the small business retirement
exemption
■■ the capital proceeds from
the disposal of assets they
contributed under the small
business 15‑year exemption.
If an individual elects to exclude
more than $500,000 under
the small business retirement
exemption provisions, the amount
over $500,000 will be counted as
22 the taxagent September 2010
a non‑concessional contribution.
This may mean the individual will
be subject to significant excess
contributions tax.
To exclude contributions from their
non‑concessional contributions cap,
a member must notify their super
fund using a Capital gains tax cap
election form either before or when
they make the contribution. If they
submit the form to their fund after
they make their contribution, the
exclusion will not apply and their
fund must report the amount as
part of their personal contributions.
For more information about the:
n small business CGT concessions,
refer to the Advanced guide to
capital gains tax concessions
for small business (NAT 3359)
n super CGT cap amount refer to
Key superannuation rates and
thresholds.
Superannuation
Tax return labels for
super co‑contributions
From the 2009–10 income year, some of
your clients may need to complete additional
labels in their income tax return to receive the
government’s super co‑contribution.
The eligibility requirements for the super
co‑contribution have not changed.
The new labels are found at the new Adjustments
item – ‘A3 Super co‑contribution’ – they are:
■■ Label F – Income from investment,
partnership and other sources
■■ Label G – Income from employment and
business
■■ Label H – Deductions from business income.
To help you and your clients complete the new
labels, there are new worksheets available in
TaxPack and online.
It is not compulsory for your clients to complete
the super co‑contribution labels but if they
don’t, they may not receive the full super
co‑contribution payment.
We do not use the information provided at these
labels to calculate your client’s taxable income.
To calculate the super co‑contribution amount,
we use the figures reported at the new labels,
instead of the figures reported at income labels
such as ‘Interest, dividends, and rent’ and
‘Partnership distributions’.
For more information, refer to:
n Completing the super co‑contribution income tax
return labels
n Super co‑contributions.
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Consider super in
temporary residents’
tax returns
If you have temporary resident clients
who are departing Australia, when you
prepare their tax returns, remember they
may be eligible for a departing Australia
superannuation payment (DASP). You
can apply for a DASP on your clients’
behalf if you have signed an Agreement
for departing Australia superannuation
payments.
Every year, temporary residents who have
worked in Australia leave behind millions
of dollars in accumulated super that they
are entitled to receive after they leave.
Temporary residents who work in
Australia may be eligible to claim their
super money after they leave if the
following apply:
■■ they visited on a temporary visa
listed under the Migration Act 1958
(excluding subclasses 405 and 410),
which has expired or been cancelled
■■ they left Australia after they became
the visa holder.
23 the taxagent September 2010
Superannuation
Super
co‑contribution
letter
Late last year, we temporarily
The super money they receive will be subject to stopped issuing letters to
withholding tax. individuals advising them
when a super co‑contribution
payment was made to their
Temporary residents can still return to
super fund.
Australia on another visa, even if they
claim and receive their super money. We recently reviewed this matter
and after considering feedback
Generally, super funds must pay former
from the super industry, we
temporary residents’ unclaimed super
have decided to stop issuing
to us six months after the later of the
these letters permanently.
following events:
■■ the former temporary resident departed However, super funds should
Australia still report super co‑contribution
■■ their former temporary resident’s visa payments to their members
expired or was cancelled. through their member
statements.
If a former temporary resident’s super
money has been paid to us, they can
claim it from us rather than from their For more information, refer to
Super co‑contributions.
super fund. 
Working temporarily in Australia (NAT 8592)
provides useful information about super for
temporary residents working in Australia. To
obtain copies for your clients:
n use our online publication ordering service
n phone us on 1300 720 092.
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Your Practice
Administering the law
We have published the following Law Administration Rulings
Practice Statements since the last issue of the TAXAGENT:
PS LA 2010/1 Approach to cases involving Division 6 of Part III of the
Income Tax Assessment Act 1936
Purpose: To advise staff of the approach to be taken in respect
of compliance activities (including assessments, administrative
penalties and interest charges), rulings, objections and appeals
involving Division 6.
PS LA 2010/2 Self‑managed superannuation funds – approved auditors –
disqualification and/or referral to a professional association
Purpose: To outline considerations for the Commissioner, as
the regulator of self‑managed superannuation funds, when
deciding whether to:
■■ disqualify a person from being an approved auditor for the
purposes of the Superannuation Industry (Supervision) Act
1993, and/or
■■ refer an approved auditor to their professional association.
PS LA 2010/3 Apportionment for the purposes of the Fuel Tax Act 2006
Purpose: To provide guidance to tax officers by explaining
when and how an entity can satisfy the ‘fair and reasonable’
requirement in determining the extent to which it is entitled to a
fuel tax credit.
To view current practice statements, visit our Legal Database and select ‘Law Administration
Practice Statements’.
Law administration practice statements program
The Law Administration Practice Statements Program tells you about
topics that we are developing, when we expect to publish them and topics
withdrawn before completion. You can also download a copy of the program
in Portable Document Format (PDF).
24 the taxagent September 2010
Your practice
Clarifying the law
We have published the following final rulings since the last issue of the
TAXAGENT:
Income tax rulings
TR 2010/2 Income tax: effective life of depreciating assets (applicable
from 1 July 2010)
TR 2010/3 Income tax: Division 7A loans: trust entitlements
TR 2010/4 Income tax: Capital gains: when a dividend will be
included in the capital proceeds from a disposal of shares
that happens under a contract or a scheme of arrangement
To view these rulings and others, visit our Legal Database and select ‘Public Rulings,
Determinations and Bulletins’.
As well as these final rulings, we regularly publish draft rulings. To find out when these
draft rulings are issued for comment, subscribe to our Legal Database.
Determinations
We have published the following final determinations since the last issue of
the TAXAGENT:
Income tax determinations
TD 2010/13 Fringe benefits tax: For the purposes of section 39A
of the Fringe Benefits Tax Assessment Act 1986 what is
the car parking threshold for the fringe benefits tax year
commencing on 1 April 2010?
TD 2010/14 Income tax: Does a failure to plant trees intended to be
established under a forestry scheme affect the timing
of deductions for expenditure on seasonally dependent
agronomic activities where section 8–1(1)(b) of the Income
Tax Assessment Act 1997 and section 82KZMG of the
Income Tax Assessment Act 1936 have previously been
ruled to be satisfied?
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 Your practice

Clarifying the law (continued)

TD 2010/15 Income tax: Does failure to plant all the trees intended
Public rulings program
to be established under a forestry managed investment The Public Rulings Program tells you about topics we’re developing and
scheme covered by Division 394 of the Income Tax when we expect to publish them. The program also includes topics that
Assessment Act 1997 mean that no deduction is allowable have been withdrawn before completion.
under Division 394 of that Act in respect of a participant’s
initial contribution to the scheme? The Public Rulings Program is available on our website in HTML and Portable Document
Format (PDF).
TD 2010/16 Income tax: Capital gains: what is the improvement
threshold for the 2010–11 income year under section
108‑85 of the Income Tax Assessment Act 1997?
TD 2010/17 Income tax: What is the car limit for the 2010–11
financial year?
TD 2010/18 Income tax: What is the benchmark interest rate
applicable for the year of income that commenced on Professional
1 July 2010 for the purposes of Division 7A of Part III of
the Income Tax Assessment Act 1936 and how is it used? development opportunities
TD 2010/19 Income tax: What are the reasonable travel and overtime meal
The following websites contain details of professional development
allowance expense amounts for the 2010–11 income year?
sessions offered by accounting and tax professional associations.
Fuel tax determination
Association of Tax and Management www.atma.com.au
FTD 2010/1 Fuel tax: is apportionment used when determining total Accountants (ATMA)
fuel tax credits in calculating the net fuel amount under Chartered Institute of Management www.cimaglobal.com/australia
section 60‑5 of the Fuel Tax Act 2006? Accountants (CIMA)
Luxury car tax determination CPA Australia www.cpaaustralia.com.au
LCTD 2010/1 Luxury car tax: What is the luxury car tax threshold and Institute of Chartered Accountants in www.charteredaccountants.com.au
the fuel‑efficient car limit for the 2010–11 financial year? Australia (ICAA)
National Institute of Accountants (NIA) www.nia.org.au
To view these determinations and others, visit our Legal Database and select ‘Public National Tax and Accountants www.ntaa.com.au
Rulings, Determinations and Bulletins’. Association (NTAA)
As well as these final determinations, we regularly publish draft determinations. To find out Taxation Institute of Australia (TIA) www.taxinstitute.com.au
when these draft determinations are issued for comment, subscribe to our Legal Database.
Taxpayers Australia www.taxpayer.com.au/seminars

25 the taxagent September 2010  back |  contents  | next 

CGT
Correct
reporting
of property
transactions
Ensure your clients are reporting their property
transactions correctly, including the transfer,
sale or purchase of real property.
The recent release of the our
Compliance Program 2010–11 is a
timely reminder to check your clients
are correctly reporting property
transactions on both income
tax returns and business activity
statements (BAS).
In the 2009–10 financial year, we:
■■ completed over 1,000 GST
compliance activities in relation to
property in the small‑to‑medium
enterprise segment and raised
liabilities of approximately $98
million
■■ conducted 3,250 GST reviews
and audits in total that directly
26 the taxagent September 2010
related to property transactions,
and raised net GST liabilities of
approximately $195 million across
all market segments.
Our property focus in 2010–11 will
include:
■■ data matching with property
transaction data we obtain
from third parties and various
government agencies
■■ using data mining techniques
to identify taxpayers who either
don’t or incorrectly report
property transactions.
GST
Case study What you need to do
In a recent property case, a company that Ensure your clients are
developed a 40‑unit, strata titled, apartment correctly reporting their property
block sold 36 of the units at market value and transactions and in the instance
reported the sales on the appropriate BAS. where an error may have
They also:
occurred contact the ATO
n sold three of the remaining four units to for assistance.
suppliers for well below market value as
settlement for outstanding accounts
n transferred ownership of the single
For more information, refer to:
remaining unit to the spouse of a director n GST and property (NAT 72957)
of the company n Common GST errors and
n did not report the sales and transfer of property (NAT 73112)
ownership on their relevant BAS. n Reporting mistakes on GST
property transactions.
Through our data matching activities,
we identified the company’s unreported
transactions, which resulted in a large GST
debt. The resident Office of State Revenue
also engaged with the company to recoup
under‑paid stamp duty amounts for the units
sold for less than the market value.
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Profile
Rod and his daughter
Trina have found that the
tax industry offers them
the flexibility to work while
pursuing their personal
passions.
Rod Williams and daughter Trina
Curtis work together in suburban
Adelaide operating two small
businesses; product procurement
firm ‘Ask‑Us Consultancies’ and
tax practice ‘R.J. Williams and
Associates’.
Rod began work in the finance
department of General Motors
Holden (GMH) where he started
part‑time accounting studies with
the aim of obtaining a tax agent
licence. After three years, he left
GMH to work with a large painting
contractor. While with the painting
contractor, he continued studying
27 the taxagent September 2010
Staying on track with
work/life balance
accounting and obtained his tax
agent registration in 1976. Rod
also obtained a builders licence for
painting, decorating and general
repairs in 1978.
In 1983, Rod decided to go out
on his own. Using a combination
of his accounting, tax agent,
contracting and builder experience,
he established a small after‑hours
practice. Shortly after, Rod took on
accountancy work for a wholesale/
retail client. Although Rod managed
their accounts fulltime and helped
with sales and marketing, he
still managed to keep his small
after‑hours tax practice operating.
After 13 years with that business,
Rod decided to start his own
company – Ask‑Us Consultancies –
specialising in product procurement.
He currently operates this company
with his tax practice RJ Williams &
Associates.
For many years, Rod’s passion has
been model trains. Even during
his busiest times, he manages
to indulge in his passion. Rod is
currently constructing a layout in
his 20’ x 12’ train room at home
and has a portable exhibition layout
titled GWR Country. He can often
be found at exhibitions and shows
as a member of the ‘Ready to
Run Model Rail Group’. For years,
Rod focused on the British Great
Western Railway – a railway that
was founded in Bristol in 1833 and
linked London to much of south
and western England, but has now
begun an Australian focus as well.
Rod’s other hobby is hairdressing
– ‘quite apt for someone without
much hair!’, he quipped. He
comments that styling hair is a great
form of relaxation ‘a bit like sculpture
or art!’.
After leaving school, Trina worked
in insurance with a building society,
which later became the Adelaide
bank. She worked her way up to
become manager of the Castle
Plaza Branch. In 2000, Trina left
the bank to concentrate on raising
her children. To ‘exercise her brain’,
Trina completed the H&R Block
tax course and achieved a near
perfect score. In 2002, she began
working part‑time with Rod in his
businesses. Trina’s involvement
in the businesses grew and she
recently became a registered
BAS Service Provider. With two
young girls and activities including
coaching their school netball
PROFILE
team, as well as her business
commitments, Trina doesn’t have
much time on her hands. However,
she still managed to design and
build an outdoor living area, garden
beds and fish ponds at home. Trina
loves renovating ‘I love to get my
hands dirty’, she said with a laugh.
Together, Rod and Trina make a
great team. Their close relationship
means their communication is great
and, according to Rod, it’s like being
able to ‘read each others minds’.
Rod says Trina is great at relating
to clients and their businesses,
and they both believe in ‘good
old fashioned customer service’.
Their clients appreciate the family
atmosphere in their office and that
they provide more than just a basic
tax service.
Rod’s not thinking of retiring and
Trina is too involved with ‘the
shop’, bookkeeping, the kids and
renovating to think about what her
future direction will be. Despite all
that, one thing is certain – their
family and businesses will always
be an important part of their lives.
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More information and feedback
More information and feedback
The TAXAGENT is produced
quarterly. If you have any suggestions
for future topics, email them to visit the Tax Professionals homepage
taxagentmagazine@ato.gov.au
The magazine team values your
feedback on this publication. regularly as an email bulletin to to be incorrect, or it is misleading and you
You can email your comments to
taxagentmagazine@ato.gov.au
or write to:
The TAXAGENT magazine team
PO Box 9990
BOX HILL VIC 3128
28 the taxagent September 2010
To find out the latest news and
changes that affect your practice,
on our website.
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help users of our website, especially
tax practitioners, stay informed of
updates to the site.
For information about subscribing
to eLink, visit our website.
OUR COMMITMENT TO YOU
We are committed to providing you with
guidance you can rely on, so we make
every effort to ensure that what we give
you is correct.
If you follow our guidance and it turns out
make a mistake as a result, we will take that
into account when determining what action,
if any, we should take.
If you feel that our guidance does not fully
cover your circumstances, or you are unsure
how it applies to you, contact us.
This publication was current at
September 2010.
© Commonwealth of Australia 2010
This work is copyright. Apart from any use
as permitted under the Copyright Act 1968,
no part may be reproduced by any process
without prior written permission from the
Commonwealth. Requests and inquiries
concerning reproduction and rights should
be addressed to the Commonwealth
Copyright Administration, Attorney‑General’s
Department, 3–5 National Circuit, Barton ACT
2600 or posted at http://www.ag.gov.au/cca
published by
Australian Taxation Office
Canberra, September 2010
ISSN1326‑5679
JS 17392
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