The main changes between the 2023 specifications and 2024 specifications are as follows: 

• Reorganisation of sections: The ‘HERDC specifications – updates to note’ section was moved to the beginning of the document, and the ‘Introduction’ was shifted to the second section to enhance the document’s flow.
• Clarification on data usage: A minor amendment was made to specify that preliminary HERDC data may be shared with Knowledge Commercialisation Australasia (KCA) to assist with its Survey of Commercialisation Outcomes from Public Research (SCOPR) data collection, validation, and reporting processes.
• Materials required: The table detailing required materials was reworded and repositioned within the document for better comprehension.
• Inclusions and exclusions on income return:: Section 4.2.1(a) was restructured into parts (a) and (b) to provide clearer guidance on non-Commonwealth Government top-ups.
• Subsidiaries and affiliates: Clarifications were made regarding the eligibility of subsidiaries and affiliates as research end-users for the Research Training Program (RTP) industry internship weighting.
• Shared income: An example was expanded to demonstrate the treatment of shared income with non-Higher Education Providers (non-HEP) organizations that are neither affiliates nor subsidiaries. Example: If HEP A receives a grant of $50,000 and allocates $20,000 to HEP B and $5,000 to a non-HEP organization that is not an affiliate or subsidiary, HEP A should report only the remaining $25,000 as its R&D income. HEP B would report the $20,000 it received, while the $5,000 allocated to the non-HEP organization is not reportable by either HEP.
• Sub-category 3.8 International Government (Other): Grants from the US National Institutes of Health were removed as an example in this sub-category.
• References to the department: Updates were made to clarify that references to the department pertain to the Australian Government Department of Education.  

Each HEP must arrange for an audit of the Category 1, 2, 3 and 4 R&D income in their respective R&D income return and provide the department with a Special Purpose Audit Report under the Auditing and Assurance Standard Board (AASB) Auditing Standard ASA800, which clearly certifies that the R&D income recorded is correct. The audit report is due 30 June 2025.

How SW can help

With a dedicated education group, we specialise in performing HERDC audits for HEPS. If you are looking for an experience team to perform your HERDC audit, please reach out to Christine Krause and Matthew Paull.   

We will be at ARMS 2025 Melbourne Conference– looking forward to connecting and sharing insights from the HERDC 2024 audits.

The post 2024 HERDC specifications released: Key updates & audit requirements appeared first on SW Accountants & Advisors.

While the draft Ruling does not introduce significant changes, it provides greater clarity by detailing factors and examples that can be considered. Each taxpayer’s situation will determine the deductibility of their self-education expenses.

The draft ruling present numerous examples, the facts and circumstances of each taxpayer will determine if the expense:

• is incurred in gaining or producing assessable income,
• enables you to maintain or improve a skill or specific knowledge, or
• objectively leads to, or is likely to lead to, an increase in your income.

The full draft Ruling can be viewed here.

For employers who subsidise or reimburse self-education expenses for their employees, it’s crucial to understand the implications of the “otherwise deductible” rule in the context of Fringe Benefits Tax (FBT). Under this rule, if an employee could have claimed a deduction for the self-education expenses had they incurred them personally, the taxable value of the fringe benefit provided by the employer can be reduced. This aligns with the principles laid out in TR 2023/D1, making it essential for employers to review the new guidelines to ensure that any benefits provided are compliant with both income tax and FBT laws.

Details

On 27 September, the Commissioner released draft Taxation Ruling TR 2023/D1, addressing the deductibility of self-education expenses incurred by an individual and replaces TR 98/9 which has been withdrawn from 27 September 2023.

The draft Ruling reflects the current rules following the changes in 2022 that removed the $250 non-deductible threshold for self-education expenses.  Therefore, self-education expenditure is deductible from the first $1 spent.

The Commissioner reinforces that self-education expenses will be deductible under section 8-1 to the extent that they:

• are incurred in gaining or producing your assessable income, and
• Are not:
  • capital, private or domestic in natureincurred in gaining or producing exempt or non-assessable non-exempt (NANE) income
  • prevented from being deducted by a specific provision.

A key focus of the draft Ruling is that self-education expenses will be incurred in gaining or producing assessable income if either or both of the following principles apply:

• income-earning activities based on skill or specific knowledge (Principle 1)
• leads to, or is likely to lead to, an increase in your income (Principle 2).

Principle 1

Where income-earning activities are based on the exercise of a skill or specific knowledge, expenses undertaken to maintain that knowledge or skill will be deductible.

The Commissioner notes following factors that the courts have determined when considering if expenses are incurred to maintain or improve knowledge or skills:

• if the knowledge or skills obtained are too general, there will not be a sufficient connection between the expense and the income-earning activity
• the self-education has a necessary connection to your income-earning activities at the time.

Principle 2

Where self-education will objectively lead to, or likely to lead to, an increase in income from your current income-earning activities, the expenses will be deductible.

The Commissioner notes following factors to assist in this determination:

• the increase in income is clearly linked to the self-education undertaken
• a real opportunity for promotion results from the self-education
• the self-education leads to or is likely to lead to a higher pay grade in your current income-earning activities
• the self-education leads to or is likely to lead to a bonus or higher pay grade once completed
• advancement of employment and salary must be a substantial part of you motives for undertaking he self-education.

The draft Ruling also highlights that if you were to cease your income-earning activity whilst you were completing a course, only expenses incurred up to the point when the activity ceases are deductible.

Exclusions

Another key focus of the draft Ruling is the following exclusions that will not be incurred in gaining or producing assessable income:

In addition to examples relation to each principle and exclusion, the Commissioner provides examples of self-education expenses relating to the following:

• course fees (including work-related conferences, HECS-HELP loan, VET Student loan etc.). Employers should remember that Higher Education Loan Program (HELP) charges are not otherwise deductible and the full value is subject to FBT if paid by the employer 
• interest
• books, digital subscriptions and stationery
• airfares, Accommodation and meals (including course and holiday).  This has been an area hotly contested over the years. Unfortunately, the examples provided merely replicate the existing examples in TR 98/9 and are quite simplistic and have an obvious outcome
• transportation costs

Apportionment

The Commissioner says that if an expense is not entirely incurred in gaining or producing your assessable income, it may be apportioned in certain circumstances.

Expenses can be apportioned in the following ways:

• according to its particular purpose where some parts are for an income-producing purpose, and some are not (where the expense has district parts), or
• on a fair and reasonable basis based on your facts and circumstances where the expense is singular.

FBT

From an FBT perspective understanding the “otherwise deductible” rule is of paramount importance. This rule stipulates that if an employee would have been eligible to claim a deduction for self-education expenses had they paid for them out-of-pocket, the taxable value of the fringe benefit that the employer provides can be reduced accordingly. However, to ensure that the otherwise deductible reduction is obtained, an employer should:

• obtain Employee declarations
• ensure that the benefit is covered by a Recurring fringe benefit declaration provided by the employee, or
• ensure that the benefit is covered by a No-private-use declaration prepared by the employer.

This is particularly relevant in light of the newly released draft Taxation Ruling TR 2023/D1, which provides updated guidelines on what qualifies as a deductible self-education expense.

Employers should closely review these new guidelines to ensure that the benefits they offer align with the ruling’s principles. By doing so, they can optimise their FBT liability while also ensuring compliance with income tax laws. This dual compliance not only mitigates the risk of potential penalties but also enhances the employer’s ability to provide meaningful benefits that support employees’ professional development.

How SW can help

The ATO is currently seeking comments on the new draft legislation, with the comments period closing on 27 October 2023.

Once TR 2023/D1 is finalised by the ATO, it is important to note that the ruling will apply both prospectively and retrospectively.

Please reach out to your usual SW advisor or one of our experts for more information about deductibility of self-education expenses or what the draft Tax Ruling might mean for you.

Contributors

Rahul Sanghani

Blake Trad

The post Tax deductions for self-education expenses appeared first on SW Accountants & Advisors.

Under the proposed regulations, foreign institutions may set up a campus in India independently to conduct undergraduate and higher-level degrees in India in all disciplines.

The Regulations impose certain eligibility criteria on foreign institutions seeking to establish a campus in India, such as a ranking amongst the top 500 universities in the world or a reputed foreign institution. The Regulations shall be drafted to regulate foreign universities while allowing them to conduct undergraduate and post-graduate, doctoral, post-doctoral and other programmes, a vision as envisaged in National Education Policy 2020 while complying with the Indian laws and regulations. 

One of the soaring positives in the Draft Regulations is that they purport to provide a foreign higher educational institution with a significant amount of independence including ability to devise its fee structure and recruit faculty and staff domestically as well as from outside India.

Foreign institutions are also required to obtain necessary approvals from the UGC including validation on the capability i.e., financial and infrastructural capability to operate such campus in India. However, FHEI are free to appoint faculty and staff including decision on their qualification, salary structure etc while ensuring that they are at par with the main campus of the country of origin.

The regulations will come into force from the date of publication in the Gazette of India.

We believe that this development and the Gujarat International Finance Tec (GIFT) city initiative will bring a new era of international presence of foreign institutions and opportunities for students and faculty in India.

Where we compare these proposed regulations with the existing regulations introduced by the International Financial Services Centre Authority (IFSCA) for GIFT city campus, there are certain nuances which we have tried to capture below:

How can SW help

If you’d like further information or would like to explore the potential benefits of these new regulations, please contact one of our tax experts based in Australia or India.

Contacts

Stephen O’Flynn
Director
SW Australia

Rahul Sanghani
Senior Manager, Tax
SW Australia

Saurrav Sood
Practice Leader, International Tax & Transfer Pricing
SW India

The post UGC releases Draft Regulations facilitating entry of foreign campuses in India appeared first on SW Accountants & Advisors.

The new regulations allow the FU & FEI to operate an International Branch Campus (IBC) or an Offshore Educational Centre (OBC) in the GIFT City, which is a smart hi-tech city in the state of Gujrat.

We have outlined below the key advantages of operating in GIFT City:

Key contacts

If you have any questions or require advice regarding the new IFSCA regulations, please reach out to
our SW Team.

Stephen O’Flynn
Director – Tax

Rahul Sanghani
Senior Manager – Tax

Saurrav Sood
Practice Support Leader, International Tax & Transfer Pricing, SW India

The post GIFT City India | Newly introduced relaxed regulations appeared first on SW Accountants & Advisors.

We have undertaken numerous independent reviews of compliance with the Child Safe Standards to assist organisations identify, check and update documents and processes to meet the new Standards.

Updates to the Child Safe Standards

Victoria introduced 11 new Standards on the 1 July 2022 which are closely aligned with the
10 National Principles. Key changes include new requirements relating to the following:

• involving families and communities in efforts to keep children and young people safe
• greater focus on safety for Aboriginal children and young people
• managing the risk of child abuse in online environments, and
• creating, managing, maintaining and disposing of records in accordance with the
  Public Record Office Victoria (PROV) Record Keeping Standards.

The Commission for Children and Young People is the overall regulator of the Child Safe Standards. Under the Child Wellbeing and Safety Act 2005, the Commission holds legislative powers to oversee and enforce an organisation’s compliance with the Child Safe Standards.

From 1 January 2023, the requirements under the Child Wellbeing and Safety Act 2005 will include that:

• all Victorian organisations that provide services or facilities for children, including those that are funded and/or regulated by government are required to comply with the Child Safe Standards. 

Our experience is that many education providers will have existing polices, procedures and practices that can be adapted and extended to address the new standards. However, as a result of the changes in the Child Safe Standards, there will also be requirements to develop new policies and procedures. Our independent review of compliance with the Child Safe Standards can assist in providing recommendations to fill any gaps in current frameworks and processes.

Our industry experience

SW has expert knowledge and understanding of the Child Safe Standards and have extensive experience in assisting education providers. We have a dedicated education group with over 50 years’ experience in the education sector, remaining at the forefront of key issues and opportunities to support our clients.

Our highly experienced team provides assurance and advisory services to a number of universities, schools, TAFEs and registered training organisations throughout Australia.

Child Safe Standards Review

SW have developed a comprehensive audit program to assess compliance with the Child Safe Standards. Our review covers each element of the Child Safe Standards and provides recommendations that are developed in collaboration with management that are fit for purpose, practical and achievable.

How can SW help?

SW conducts Child Safe Standards reviews that includes the following steps:

1. Gain an understanding of the organisational accountability, systems and processes for meeting the requirements of the Child Safe Standards

2. Review documented strategic policy, frameworks and procedures relating to the Child Safe Standards

3. Review the Complaint policy and handling procedures

4. Assess documentation and processes relating to recruitment, induction and professional development for staff or volunteers

5. Assess processes relating to student enrolment, pre-assessment and induction of students under the Standards

6. Review student support services and communication resources available to support a child safe culture

7. Review the record management systems and online environment including the capture of relevant child safe activities data

8. Discuss any anomalies with relevant personnel as a part of the review process

9. Provide a detailed report providing practical recommendations to address any gaps in your current framework and processes.

Get in touch

Our extensive higher education sector experience will enable us to undertake a tailored and comprehensive Child Safe Standards independent review. We have developed a comprehensive audit program that can be tailored to the needs of your organisation. Please get in touch with our subject matter experts to discuss how we can assist your organisation in meeting the requirements of the new Child Safe Standards

Contacts

Matthew Paull, Senior Manager, Assurance & Advisory Services

The post Child Safe Standards appeared first on SW Accountants & Advisors.

了解联邦预算案在2022年对您有何意义：

农业综合企业

能源与资源

国际业务

托儿

房地产与基础建设

教育

中小型企业与养老金

The post 联邦预算案对您有何意义？ appeared first on SW Accountants & Advisors.

Hear from Dipesh Shah, Executive Director, International Financial Services Centres Authority (IFSCA), Sandip Shah, Head of the IFSC Department, Atul Puri, Managing Partner & Co-founder, SW India and Saurrav Sood, Practice Leader, SW India as they discuss the IFSC regulations and highlight the advantages of GIFT City and what it can offer in terms of its world class infrastructure to Australian universities.

In a recent policy update, the Government of India issued regulations enabling Foreign Educational Institutions to establish an International Branch Campus (IBC) or Offshore Education Centre (OEC) in International Financial Services Centres (IFSC) in the Gujarat International Finance Tec-City (GIFT City) in India.

This much anticipated legislation is welcome news for Australian universities looking to establish a location for teaching, research and industry engagement in India.  This provides an opportunity to enter the Indian market in a more tax effective and less heavily regulated environment.

If you have any queries or would like more information, please contact the Marketing team via marketing@sw-au.com.

The post Webinar │Concessions provided to foreign universities to operate in India   appeared first on SW Accountants & Advisors.

With the change of government, there was great anticipation on the updated Federal Budget. However, this Budget may not provide enough support for households in managing the cost of living. Many businesses, especially small to medium-sized businesses are still feeling the impact of the COVID-19 pandemic and rising prices and interest rates.

On 25 October 2022, the Treasurer announced the Government’s plan for a more inclusive and sustainable economy. This budget is in line with the Labor’s five-point Economic Plan, aiming to reduce the costs of living, drive productivity growth and expand the capacity of the economy to alleviate supply side pressures, increase real wages and genuine economic investment for Australians. The SW team has navigated the papers to find key measures for industry and sectors.

Did you miss out on our Federal Budget webinar?

Check out Bill Lang, Director at Small Business Australia and our panel of industry experts as they share their insights and key takeaways from the Budget.

What does the Federal Budget mean for you?

Our Fast Facts provide an overview of the budget insights and potential opportunities from our team of experts. Tailored to your industry or business type, SW also reviews if the Federal Budget support measured up to expectations.

Take a look at what the Federal Budget means for you in 2022:

Agribusiness

Energy & Resources

Childcare

Property & Infrastructure

Education

SMEs & Superannuation

The post Federal Budget overview 2022/23 – October appeared first on SW Accountants & Advisors.

Introduction to SMSF | 自我管理退休金簡介（國語中字）

Treatment of overseas income | 移民澳洲如何處理海外收入（國語中字）

Tax issue of investment in Australia properties | 澳洲房地產投資的稅務問題（粵語中字）

Family Trust structure in Australia | 詳解澳洲家族信託架構（粵語中字）

Transfer Pricing | 轉讓定價（國語中字）

Setting up a business | 在澳洲開設企業（國語中字）

Migration Visa | 移民簽證（英語中字）

Investing in Australia | 澳洲投資（中文字幕）

Capital Gains Tax | 資本增值稅（中文字幕）

Tax issues of principal place of residence | 主要居住地稅務問體（中文字幕）

Education in Australia | 澳洲教育（中文字幕）

Audit requirements in Australia | 澳洲審計要求（中文字幕）

Introduction to Australian taxation | 澳洲稅務需知（中文字幕）

Tax Residency | 澳洲稅務居民身份（中文字幕）

Reach out to our experts to start the conversation today! 如果您有任何移民相關的問題請聯絡我們。

The post Migration video series | 移民澳洲系列 appeared first on SW Accountants & Advisors.

Key takeaways

• Although there are no key tax measures introduced, direct property taxes will continue to be the source of over 50% of new revenue for the Victorian Government due to increased transaction volume and rising land values (although this is expected to be tampered by forecasted interest rate rises).
• A new Victorian Future Fund will be established to manage the fiscal impact of COVID 19. It will initially be funded from the VicRoads Modernisation joint venture and is expected to have a balance of around $10bn. Investment returns from the Fund is to be quarantined and returned to the Fund to help offset the current debt and return the Budget to surplus by 2025-2026.
• There is a clear focus in this Budget to repair the health system. Included in the Budget is more than $12bn of health-related expenditure including the training and hiring of additional healthcare workers and paramedic staff, funding for Ambulance Victoria to meet growing demand for services and investment to cut surgery waiting lists.
• The two-year Sick Pay Guarantee pilot program will receive $246m in funding to assist provision of a payment of up to five days of sick or carer’s pay at the national minimum wage for insecure work (casual employees).
• $250m provided for a one off $250 Power Saving Bonus to all Victorian households using the Victorian Energy Compare website to locate the cheapest electricity deal. The scheme will run from 1 July 2022 to 30 June 2023.
• A commitment of $111m to support Victoria’s tourism and major events.
• The Victorian Government has allocated $1.8bn to the school building project and plans to continue upgrading schools until it achieves its intended target of 100 new schooling facilities by 2026. The program includes upgrades to 65 schools including 36 special schools, building 13 new schools, additional stages at four more schools, and expanding capacity at two schools to meet enrolment demand.
• The Victorian Government also plans to invest $5bn in early three-year-old childhood education by increasing universal educational access for disadvantaged families as well as providing support to individuals from diverse backgrounds and $131m to assist students from rural areas to access four-year-old early childhood services.

For full overview of the infrastructure measures see our breakdown here.

Victorian Industry Fund to support Victorian Businesses

The Government has introduced a $120m fund to support the advancement of domestic manufacturing and other high priority sectors. Some of the initiatives to be supported by this Fund include:

• $40m to provide grants to support rapidly growing businesses
• $40m of targeted financial incentives to attract investment into Victorian businesses
• $20m for an equity investment pilot fund to attract highly innovative companies particularly in areas such as medical technology
• $7m low-carbon manufacturing grant program to help Victorian manufacturers to compete globally in the renewable energy space
• $4.5m for 300 digital jobs for manufacturing internships to help train Victorian workers in this industry. 

Significant Tax Measures

No significant new tax measures were announced in the 2022/23 Budget although there were minor amendments in relation to:

• Equalisation of gambling tax rates for electronic gaming machine operators

• Exemption from motor vehicle duty for wheelchair accessible commercial passenger vehicles that provide unbooked services.

However, as noted above, the State Taxes are to be a major source of revenue for the Victorian Government. The table below shows the annual revenue expected from State Taxes over the next 4 years.

Opportunities

The opportunity for businesses may come from the expected economic growth although this is not anticipated to be significant. Business sectors such as Medtech, pharmaceuticals and manufacturing should benefit from the increase in funding.

Did the VIC Budget measure up to expectations?

The Budget fell short of providing the required assistance to boost businesses which are facing significant uncertainties.

The Government’s commitment to repairing Victoria’s health system in needed and welcomed. However, the Government has not sought to increase property taxes to decrease the State’s debt and is instead relying on solid economic growth to repair the budget.

Please reach out to one of our experts below for assistance navigating the implications and opportunities this Budget presents for you, your business and your industry.

Contacts

Abi Chellapen

Daren McDonald

Stephen O’Flynn

The post VIC State Budget 2022/23 appeared first on SW Accountants & Advisors.