The ATO’s aim, in publicising its programs and focus areas, is to encourage taxpayers to identify and address risks and to improve voluntary compliance.

This presents an opportunity for private groups to review their governance frameworks, validate tax positions, and ensure readiness for future interaction with the ATO.

Private wealth group demographics

The ATO estimates there are about 284,000 private wealth groups in Australia. These groups are divided into three categories, and each category is reviewed differently as part of the ATO’s compliance programs:

ATO focus areas for private wealth groups for the 25/26 income year 

Tax governance – a major (and increasing) priority  

Tax processes are likely to be more centralised and concentrated in private groups than in public groups. Nonetheless, the ATO expects privately owned and wealthy groups to maintain a documented tax governance framework that clearly outlines roles, responsibilities, and escalation protocols for tax issues.  

Aspects that the ATO are likely to focus on in this context include: 

• processes for active identification, monitoring, and management of tax risks 

• decision-making in relation to tax matters supported by documentation and specialist advice 

• alignment of frameworks and processes with the ATO’s justified trust framework. 

Claiming of CGT concessions  

A number of CGT concessions are flagged for attention by the ATO as being risk areas. These include:  

• eligibility for the CGT discount 

• groups that inappropriately seek to access the small business restructure rollover provisions 

• eligibility for other small business CGT concessions that are claimed  

• arrangements where capital gains are distributed to foreign beneficiaries of trusts and capital gains are disregarded.  

The ATO will be looking to ensure that eligibility conditions for the above concessions are met and appropriate documentation to support or evidence the concessions is maintained.    

Various issues relating to trusts  

Trusts are widely used in private groups and the ATO has indicated a particular interest in the following matters:  

• section 100A – distributing to lower-taxed beneficiaries where there is a reimbursement agreement under which a person or entity other than the beneficiary effectively obtains the use or benefit of the relevant funds 

• application of trustee beneficiary non disclosure tax where there are circular trust distributions 

• distributions made by trusts that have made a family trust election or interposed entity election outside the relevant ‘family group’ that may trigger family trust distribution tax 

• eligibility to claim franking credit tax offsets where distributions are made to newly incorporated company beneficiaries that may not meet the 45 day holding rule.  

Division 7A  

Division 7A is predictably a key area of focus of the ATO. In particular, they are monitoring common risk areas, including: 

• failure to make required minimum yearly repayments

• non-complying (or non-existent) loan agreements 

• arrangements designed to circumvent Division 7A with guarantees of third-party loans by private companies. 

Other issues on the hit list 

The ATO has also shown interest in several areas, including: 

• lifestyle assets, which potentially raise various tax issues (for example, lifestyle assets being treated as business related, rather than person use assets, Division 7A and GST issues) 

• succession planning – the ATO are interested in mechanisms employed in relation to intergenerational wealth transfer where business restructures or transfers of assets are involved. 

Property and construction industry 

The property and construction industry remains a focus for the ATO.  

Areas of focus including: 

• capital vs revenue treatment  

• GST and margin scheme 

• Non-arm’s length dealings within entities in the same private group to reduce their taxable income 

• Failure to lodge or report sales or income (particularly subcontractors) as identified by the ATO through the TPAR. 

Other industries 

Other industries of focus include the following:  

• tax advisers and professional firms 

• private equity transactions and activities  

• retail operations 

• cross-border transactions 

• crypto assets  

• use of tax-exempt or concessionally taxed entities (super funds and not-for-profit entities, including ancillary funds). 

How SW can help 

The ATO is increasingly active in conducting reviews and audits of private groups. Being aware of these key focus areas is essential. Preparing in advance helps private groups manage risks effectively and maintain strong governance, which can minimise potential issues and ensure compliance. 

SW have deep experience in advising private groups on tax governance frameworks, processes, and the various areas of interest highlighted above. We also have extensive experience in managing ATO reviews and audits.  

Please contact us should we be able to assist in ensuring that your group is well prepared for any ATO review.

Contributor

Shu En Hwang

The post Private groups – ATO identifies key focus areas for FY25 & FY26 appeared first on SW Accountants & Advisors.

Janelle’s clients have included those that operate in the following sectors: IT, professional services, wholesale importing, property development and investment, and not-for-profit.

Janelle has demonstrated capability in delivering outstanding outsourcing services for start-up companies, SME and publicly listed companies and Australian subsidiary entities of large multinational groups.

Janelle provides specialist advice on all employment related taxes including: GST, FBT and salary packaging. She advises clients on the following areas:

• Audit risk for indirect tax compliance
• Payroll tax
• WorkCover for employees and contractor arrangements
• Financial analysis and management reporting
• Financial modelling
• Business structuring.

Janelle is a member of the Institute of Chartered Accountants.

The post Janelle McPhee, Partner appeared first on SW Accountants & Advisors.

In the 2023-24 Budget, the Government announced the implementation of a 15 per cent global minimum tax and domestic minimum tax, key aspects of Pillar Two of the OECD/G20 Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy.

The Two-Pillar Solution will ensure that multinational enterprises (MNEs) will be subject to a minimum effective tax rate of 15%, and will re-allocate profit of the largest and most profitable MNEs to countries worldwide. Under the OECD, 136 countries and jurisdictions have agreed to implement the new framework and proposed reforms.

After years of joint development, members of the G20/Organization for Economic Co-operation and Development (OECD) Inclusive Framework (IF) on Base Erosion and Profit Shifting (BEPS) (the Inclusive Framework) agreed on the Two-Pillar Solution to address the Tax challenges arising from the Digitalization of the Economy. Two detailed blueprints were published in October 2022 on the tax reforms for addressing the Nexus and profit allocation challenges (Pillar One) and for Global Minimum Tax (GMT) rules (Pillar Two).

Who is affected?

Pillar One: will impact multinationals with revenues that exceed EUR 20b (~AUD 30b) per annum and have profit margins in ‘excess’ of 10%.

• Exclusions apply for extractives and regulated financial services
• Treasury currently estimates that no Australian headquartered multinationals would be impacted.  However Australian subsidiaries of foreign headquartered multinational groups may need to take into account any profits allocated to them in Australia.

Pillar Two: will have a far wider impact and applies to multinational groups with a global revenue of EUR 750m (~AUD 1.2b) per annum. 

• The OECD Framework excludes Government entities, international organisations (e.g. World Trade Organisation), non-profit organisations, pension funds or investment funds that are ultimate parent entities of an MNE Group or any holding vehicles used by such entities, organisations or funds from the scope of Pillar Two
• The OECD Framework includes de-minimis exemptions based on the revenue and profits within particular jurisdictions
• Further breakdown on each pillar can be found below.

When does it come into effect?

There is currently no draft legislation and no specified start date. However, it is expected that:

• Pillar One: the start date is to be announced.
• Pillar Two:
  • The Income Inclusion Rule which will apply for income years starting on or after 1 January 2024. This rule will apply to Australian multinationals and Australian entities which are subsidiaries of a foreign-headquartered multinational located in a jurisdiction that has not implemented this rule.
  • The Undertaxed Profits Rule which will apply for income years starting on or after 1 January 2025. Where no Income Inclusion Rule applies, the Undertaxed Profits Rule will apply to foreign multinationals that operate in Australia

How can SW help?

SW can help your business prepare for the international corporate tax reform, by assisting with the following: 

• Review of current corporate structure to determine if Pillar One and/or Pillar Two will apply
• Implement systems to assist with compliance with the new rules. 
• Formulate tax procedures and control framework to comply with the new rules.

If either, or both, Pillar One and Pillar Two are found to apply, we can provide the following services:

• Review bilateral tax treaties to determine if the STTR applies
• Model the impact of the rules
• Review transfer pricing agreements to determine risks and advise on changes to mitigate risks
• Determine where any remaining risks areas are and propose actions items to mitigate risks
• Lodge Global Anti-Base Erosion (GloBE) returns with the ATO.  This lodgement is likely to be required regardless of whether a top-up tax liability exists.

SW held a seminar to discuss the operation of the rules in greater details. you can access the webinar video here.

Key elements of the Two-Pillar Solution

Pillar One

Under Pillar One, MNEs will need to determine whether their profit margin (profit before tax ÷ revenue) exceeds 10%. The excess being referred to as “residual profits”.

A quarter of the residual profits would be redistributed to the countries where the products or services are consumed, to be taxed in those jurisdictions. The allocation of the residual profits to source jurisdictions will broadly be based on the revenue sourced from those jurisdictions. There will be some de-minimis exclusions.

What are the key implications for affected taxpayers?

• Systems and processes should be implemented to meet this compliance requirement
• Subsidiaries based in Australia may need to consider any profits allocated to Australia before finalisation of their income tax returns
• Global transfer pricing policies will need to be reviewed in light of the new rules
• The tax impact should be modelled.

Pillar Two

Pillar Two is also referred to as the Global Anti-Base Erosion or Global Minimum Tax rules.

Objectives of Pillar Two

The objective of Pillar Two is to set a minimum Effective Tax Rate (ETR) to reduce incentives for multinational to move profits to low tax jurisdictions.

Calculating the ETR

• The ETR is not the corporate tax rate in the country. It is similar to how the effective tax rate is calculated under the accounting rules but will not be the same as the calculation required under the Pillar Two rules.  
• The ETR = Adjusted Covered Taxes ÷ Net GloBE Income. The minimum ETR is 15% and is calculated on a jurisdictional basis.
• The financial accounts and tax effect accounting balances will be used in the calculation of the ETR to better align the financial accounts with tax purposes. The net GloBE income will generally be the accounting profits used in the parent entity’s consolidated financial statements subject to certain adjustments (see below).
• In calculating the net GloBE income, there will be some adjustments for certain permanent differences such as removing dividends and equity gains. The OECD framework also includes an exclusion for international shipping income.
• In calculating the net covered taxes, only tax on profits are relevant. Indirect taxes are excluded. Further, there are rules for addressing temporary differences. Therefore, the tax effect accounting workpapers will be relevant in calculating the ETR.
• Tax losses brought forward can broadly be carried forward and applied in the calculations.
• There are also adjustments to Net Globe Income based on the level of employment costs and tangible assets in each jurisdiction.  This would reduce the profits subject to the top-up tax.
• As the calculations are complicated, SW will hold seminars when the legislation is released to discuss the operation of the rules in greater detail.
• If subsidiaries in a jurisdiction have an effective tax rate of <15% (say 10%), then the parent entity jurisdiction can levy a “top-up” tax of the difference i.e. 5% (15%-10%) on the relevant profits in the jurisdiction. This is referred to as the Income Inclusion Rule (IIR). This tax is in addition to the tax paid by the parent company on its own profits.
• Where the top-up tax amount is not fully covered by the IIR, then the Undertaxed Payment Rule (UTPR) will operate as a stop gap measure. In general, the remaining top-up tax will be allocated to the all the jurisdictions (in which the MNE operates) which have implemented the GloBE rules.
• Before calculating the IIR and UTPR, the Subject To Tax Rule (STTR) must firstly be considered. The STTR prevents companies from avoiding tax on their profit earned in developing countries by making deductible payments such as interest or royalties that benefit from reduced withholding tax rates under tax treaties and which are not taxed (or taxed at a low rate) under the tax laws in the treaty partner. In this case, the payer’s jurisdiction can levy an additional top-up withholding tax so that the income amount is subject to a minimum tax (in both countries together) of 9%. This is lower than the minimum 15% tax on profits because the STTR tax is calculated based on the gross amount.

Operation of Pillar Two

Step 1. Subject to tax rule (STTR)

Objective: Ensure that developing countries have an equal opportunity to tax certain types of income.

Implementation:

• Participating members who are taxing certain items of income below 9% will be required to include the STTR into a bilateral tax treaty when requested by a developing treaty partner.
• When the STTRs are included in a bilateral tax treaty, the payer jurisdiction may additionally tax certain related party payments if the receipt is taxed at a rate of less than 9% in the payee’s jurisdiction.
• This taxing right will be capped at the difference between the STTR minimum tax rate and the tax rate on the payment.

Impact on Australian taxpayers

The STTR is expected to have limited application to Australian taxpayers given our corporate tax rate and withholding tax system.  However, this will need to be monitored to confirm that affected payments have been subject to the minimum 9% tax.

Step 2. IIR and UTPR

Once the STTR has been considered, the next step is to consider the IIR and UTPR rules.

Objective: Ensure an effective minimum 15% effective rate is imposed on multinationals with a global revenue of EUR 750 million (~AUD 1.2 billion) per annum. 

Implementation: These rules would be carried out through two interlocking rules. Together they would work to collect a top-up tax on profits in jurisdictions which are deemed to be ‘undertaxed’.

• Income inclusion rule (IIR) – is the primary charging mechanism which would allow the parent company jurisdiction to apply a top-up tax on resident multinational ‘parent’ companies, where the group’s income in another jurisdiction is being taxed below the global minimum rate of 15%. Note that there are special rules applying to overseas branches of the parent company which operate differently to the IIR.
• Undertaxed payments rule (UTPR) – where the parent company jurisdiction does not implement the IIR or the top-top up tax is not fully captured by the IIR, then the UTPR as the secondary charging mechanism would broadly allocate the remaining top-up tax to all the implementing jurisdictions in which the MNE operates.
• For example, if a multinational subsidiary in Australia had a foreign subsidiary paying less than the global minimum rate on its profits, and there was no foreign jurisdiction applying the IIR in relation to those profits, then Australia may be required to apply the UTPR to the Australian subsidiary in respect of the under-taxation in the foreign subsidiary’s jurisdiction. 

How can affected taxpayers prepare?

• Systems and processes will need to be implemented to allow for an effective and efficient calculation of the effective tax rates and completion of the GloBE information return
• The impact on the MNE group should be modelled
• Review current transfer pricing agreements to determine how they would be impacted by Pillar One and Pillar Two.

Contributors

Kate Wittman

The post Major international tax reform with OECD Two-Pillar approach appeared first on SW Accountants & Advisors.

The Exposure Draft Bill (the draft Bill), released on 31 March 2023, proposes a new anti-avoidance rule to deny deductions for payments attributed to intangible assets located in low corporate tax jurisdictions. Significantly, the changes do not remove withholding tax from affected payments that are classed as royalties. In some circumstances, payments may therefore be both non-deductible, and subject to Australian withholding tax at rates of up to 30%.

The changes will apply to payments made by significant global entities (SGEs) on or after 1 July 2023. Broadly, SGEs are members of multinational groups with annual consolidated global income of at least AUD 1 billion. The proposed 1 July 2023 start date allows little time to prepare for the impact of the proposed changes.

The draft Bill is one of several measures introduced in the 2022-23 Federal Budget as part of a comprehensive strategy to enhance multinational enterprises’ tax integrity.

Anti-avoidance rule changes

The statutory objective is to discourage SGEs from avoiding income tax by channeling income from the exploitation of intangible assets to low corporate tax jurisdictions. The proposed rule will apply to payments:

• made by SGEs
• in relation to an arrangement where the SGE or an associate acquires or exploits the intangible asset
• where the arrangement results in the recipient (or another associate) generating income in a jurisdiction with low taxes.

A jurisdiction will be classed as a ‘low corporate tax jurisdiction’ if the corporate tax rate is less than 15%.

The rules are also intended to encompass the incurring of a liability or crediting of an amount, without an actual direct royalty payment. This ensures the proposed rules cannot be evaded through indirect payments.

Intangible assets payments

As expected, the proposed law applies to relevant payments made by an SGE directly or indirectly to an associate.

Payments made directly to unrelated third parties are not within the scope of the proposed law unless they are otherwise also indirect payments to an associate.

General definition of intangible assets

In general, the term ‘intangible asset’ is interpreted according to its ordinary meaning. However, the draft Bill proposes an additional definition.

The proposed rules will utilise some of the existing definitions of ‘royalty’ in the current tax legislation, with respect to the use or supply of specific assets. Some examples are:

• intellectual property rights such as trademarks, patents, designs and processes
• knowledge and information pertaining to certain fields such as science, technical and commercial
• in house designed algorithms
• any tapes, visual images or sounds used for broadcasting
• motion picture films.

The proposed definition of intangible asset also encompasses rights or interests in the type of assets mentioned above.  Additionally, further assets may be specified in the regulations.

The proposed rule does not extend to rights related to tangible assets, such as interests in land, or to financial arrangements (as defined in the existing tax legislation). The exclusion from categorisation as intangible assets equally applies to industrial, commercial, or scientific equipment. 

Apportionment

The phrase, ‘to the extent’ in the proposed law contemplates payments of an undissected amount for a bundle of rights or benefits. Apportionment may then be required to allocate part of the payment as relating to the intangible assets. The deduction for that portion of the payment would then be denied.

Several transfer pricing methodologies may be used to apportion payments, however the proposed law is yet to provide guidance on how such apportionment should occur. This appears similar to the potential uncertainty on apportionment of income received in respect of software (albeit relevant to withholding tax).

Low corporate tax jurisdictions

The draft Bill defines a ‘low corporate tax jurisdiction’ as a country in which the lowest corporate income tax rate applicable to an SGE is below 15%. Determining the ‘lowest corporate income tax rate’ of a country may be a complex matter.

Of concern is the fact that jurisdictions which provide tax exemptions for specific types of income may be classed as low tax jurisdictions due to the broad scope of this definition. A country such as New Zealand, which does not generally tax capital gains, may be classed as a low corporate tax jurisdiction.

A Government Minister can also determine that a jurisdiction qualifies as low tax if it has a preferential patent box regime.  This provision is only intended to capture patent box regimes that provide concessional tax treatment without requiring any economic activity to develop the relevant intellectual property in the country providing the patent box treatment.

In making a determination, the Minister may have regard to publications of the Organisation for Economic Co-operation and Development (OECD).

The suggested tax threshold aligns with the global trend towards a domestic minimum tax (DMT) rate of 15% as proposed under the OECD’s Global Anti-Base Erosion (GloBE) Pillar Two initiative. Nonetheless, it exceeds the existing minimum royalty withholding rate of 10% commonly found in Australia’s double taxation agreements. Furthermore, the proposed rate is higher than the 10% rate stipulated in the equivalent legislation of the United Kingdom.

Exploitation of intangible assets

The draft Bill introduces an innovative concept in defining intangible assets to be ‘exploited’. This concept encompasses a wide range of arrangements that go beyond the mere use of the asset. Examples include the use by way of marketing, selling, licensing, distributing, supplying, or engaging in any other activity with the intangible asset. This expanded definition of ‘exploitation’ aims to cover a broad spectrum of arrangements, highlighting the comprehensive scope of activities that may be captured.

The condition will also be deemed as fulfilled if the SGE is granted explicit authorisation to utilise the intangible asset. According to the draft Explanatory Materials, as long as there is a mutual understanding between the parties that allows the SGE to access and utilise the intangible asset, this requirement will be considered met. It should be noted that this condition can still be satisfied even if the permission is not explicitly documented.

The broad definition of ‘exploit’ implies that the threshold for meeting this requirement is relatively low, which means that even ordinary commercial arrangements could potentially fall within its scope. Taxpayers will need to carefully assess the application of the other conditions to determine if the provisions are applicable in their specific situation.

SGE penalties

The Government is also requesting stakeholder views regarding the appropriateness of a shortfall penalty provision to be imposed on SGEs which mischaracterise payments in an attempt to avoid income tax, including withholding tax. Given the onerous penalty regime that already applies to SGEs, the introduction of further specific penalties under the intangible payments rules would seem to be excessive.

How SW can help

Our tax experts can assist with

• analysing arrangements referrable to the use of intellectual property and the likelihood of the measures applying to denied deductions
• analysing the substance of payments, including the extent of apportionment required to determine the part attributable to a right to exploit an intangible asset
• assessing the extent of income from exploiting intangible assets that is derived in a low corporate tax jurisdiction.

SW will be monitoring announcements and will keep you updated as more information becomes available.

Please reach out to the Key Contacts here or your SW contact if you would like assistance determining the impact of the measures on your group, and advice on how your group can navigate the complexities.

Contributors

Tony Principe

Wasi Hussain

Rahul Sanghani

The post Australian Treasury denies SGEs deductions for payment relating to intangibles appeared first on SW Accountants & Advisors.

The Taxpayer Alert notes that participants in, and promoters of these types of arrangements, may be subject to penalties, including promotor penalties under Div 290 of Sch 1 to the Taxation Administration Act 1953.

Background on Division 7A

Division 7A (Div 7A) is a far reaching set of provisions the essential purpose of which is to treat certain payments and non-commercial loans made by private companies to shareholders or their associates as a distribution of profits and therefore a deemed (unfranked) dividend.

For a deemed dividend to arise, the relevant private company must have what is referred to in the legislation as a ‘distributable surplus’ (which is very broadly profits, reserves or surplus funds from which a dividend could theoretically be declared).

What types of arrangements is the ATO looking at?

Arrangements that are flagged by Taxpayer Alert TA 2023/1 as being high risk and in the crosshairs of the Commissioner are arrangements along the following lines:

• An individual who is a shareholder and director of a private company with retained profits.
• The individual disposes of their shares in the private company to an interposed holding company (set up by the individual) and receives shares in the interposed holding company in return.
• The value of the shares received in the interposed holding company equate to the net asset value of the private company, with the result that the interposed company has no ‘distributable surplus’ available for distribution.
• The individual applies CGT roll-over to disregard, for tax purposes, any capital gain arising on the disposal of the shares in the private company.
• The private company declares a franked dividend to the interposed holding company. Whilst the TA does not explicitly state this, it is expected that the dividend received by the interposed holding company (being a dividend received from pre-acquisition profits of the private company) would be recorded for accounting purposes as a reduction in the book value of the asset, rather than a receipt of profit. 
• The private company discharges its liability to pay the dividend by ways such as cash, cheque or promissory note.
• The individual receives a loan from the interposed holding company, financed by the dividend received from the private company. The terms of the loan do not comply with Division 7A (which requires loans to meet criteria such as a minimum interest rate and maximum term).
• Whilst the loan is not on complying Division 7A terms, taxpayers are taking the position that Division 7A would not apply due to the absence of a distributable surplus in both the private company and the interposed holding company. 

TA 2023/1 also indicates that the Commissioner would be equally concerned should a similar arrangement be entered into where the relevant shareholder is a trust, rather than an individual.  

Grounds to challenge

On the basis that arrangements such as the above exhibit a high degree of contrivance and would appear to be motivated by an objective of avoiding the application of Division 7A, TA 2023/1 notes that the Commissioner would be likely to challenge the arrangement on the following alternative bases:

• the Commissioner may assert that the loan is not a genuine loan, but a payment that is assessable as an unfranked dividend under the deemed dividend rules in Division 7A
• the arrangement may be challenged as a ‘dividend stripping’ scheme resulting in the loan amount being included in assessable income of the original shareholder and the franking credit on the dividend paid to the interposed holding company being cancelled
• under the general anti avoidance rules in Part IVA.

How SW can help

While the circumstances at which TA 2023/1 are directed are quite specific and may not affect many of our clients, the Taxpayer Alert highlights the efforts that the ATO are applying to enforce Division 7A.

Should you have any queries in relation to this Taxpayer Alert or Division 7A more generally, please reach out to your SW contact or Key Contacts here.

Contributors

Tanya Bester

The post ATO targets Division 7A avoidance scheme appeared first on SW Accountants & Advisors.

On 23 February 2022, the Commissioner released Draft Determination TD 2022/D2, addressing the deductibility of expenses incurred when establishing and administering an Employee Share Scheme (ESS).

The Commissioner has stated expenses incurred from the establishment and/or amendment of an Employee Share Scheme (ESS) are not deductible under section 8-1 of the ITAA 1997 as they are viewed as capital in nature. This may be seen as a departure from a general view that employee costs are more typically revenue in nature.

Expenses not deductible

Establishment fees can include:

• Legal fees incurred from establishing an Employee Share Trust (EST) or ESS plan rules
• Start-up costs, such as commencement charges for a trustee company, or
• Registration fees with authorities such as stamp duty or ASIC fees.

Amendment fees can include:

• Legal fees paid to amend either the EST or ESS plan rules, or
• Regulatory fees and stamp duty paid to authorities.

To the extent that the business is carried on for a taxable purpose, both establishment and amendment fees would be deductible to the employer company in equal proportions over 5 years under section 40-880 of the ITAA 1997.  

Section 40-880; commonly referred to as ‘black-hole expenditure’ provides a deduction for certain capital expenditure of a business on a straight-line basis over a 5-year period.  Section 40-880 only applies to capital costs incurred in relation to a past, present, or proposed business that is not otherwise dealt with under other income tax provisions. 

The Commissioner did confirm however, that the ongoing expenses associated with the administration of an ESS should be deductible under section 8-1 of the ITAA 1997.  

Deductible expenses

Ongoing expenses include:

• brokerage fees
• audit fees
• bank charges
• making new offers to employees under an existing ESS, or
• other ongoing administrative expenses.

Fees relating to annual ESS reporting should continue to be deductible, however questions must now be raised as to whether the ATO’s view will impact on broader issues such as the tax treatment of contributions to employee share trusts and expenses they incur. 

How SW can assist

Once TD 2022/D2 is finalised by the ATO, it is important to note the determination will apply both prospectively and retrospectively.

If you want to discuss any of the aspects of this draft determination or concerns regarding your existing or future ESS, please contact your SW advisor or one of our experts.

Contributors

Justin Batticciotto

E: jbatticciotto@sw-au.com

The post Employee Share Schemes: Deductibility of expenses appeared first on SW Accountants & Advisors.

We can support you with a range of services, including:

• accounting and taxation compliance
• business advisory
• business health check
• business and financial structures
• corporate governance
• international business advisory
• outsourced accounting solutions
• performance improvement
• process and system improvement
• strategic planning
• succession planning
• wealth management and estate planning.

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Managing tax detail and compliance can be overwhelming, especially for small and medium-sized and even larger private businesses. From cloud migration to strategice planning, international business to tax and accounting compliance, we offer comprehensive tax services that help you identify and manage potential tax risks before they become a problem, maximise tax opportunities and minimise exposure, take realistic tax positions, and ensure compliance with all ATO requirements.

This way, you can focus on what matters most to you: growing your business.

Our extensive involvement in the industry and deep understanding of legislative and administrative reforms means we are actively involved and up-to-date on all current tax issues that impact businesses. Our knowledgeable teams are dedicated to ensuring that your business is fully compliant with tax regulations and optimized for the best possible tax outcomes.

We believe in providing a personal touch, so our senior engagement leaders take the time to keep you informed and answer any questions you may have. Our goal is to provide you with peace of mind, knowing that your tax affairs are being managed by experienced professionals that are an extension of your team.

The range of our services to private and unlisted businesses is extensive and includes: 

• accounting and taxation compliance
• business advisory
• business and financial structures
• corporate governance
• international business advisory
• outsourced accounting solutions
• performance improvement
• strategic planning
• succession planning.

The post Tax for Private Business appeared first on SW Accountants & Advisors.

Navigating the detail of tax can be a daunting task for businesses and finance teams, particularly for companies with complex transactions, structures and workforces. We’ll help you identify and manage tax risks, maximise opportunities and minimise exposure, take realistic tax positions and ensure compliance with all ATO requirements. 

We have a highly skilled specialist tax teams working with multinational corporations and Australian subsidiaries of overseas companies, as well as Australian and Asia Pacific firms of all sizes.  

Our significant involvement in industry and a high level of involvement in reforms, both legislative and administrative, means we are actively involved and across all current tax issues that impact business.  

We are closely involved in consultative processes, making submissions to Treasury and/or the ATO and have extensive experience managing successful ATO reviews including Combined Assurance Reviews (CARs), Streamlined Assurance Reviews (STARs) and ATO top 20 and top 100 reviews.  

Our team can provide end-to-end solutions across: 

• corporate & International tax advisory 
• Country by Country reporting 
• employment taxes (PAYG, FBT, superannuation and payroll) 
• expatriate taxes 
• FATCA / CRS 
• fuel tax credits 
• fund tax advisory 
• Government grant assistance 
• global workforce mobility services 
• GST and indirect taxes 
• tax due diligence 
• transfer pricing 
• tax structuring 
• tax effect accounting  
• tax governance implementation and review 
• tax controversy, dispute, review and audits 
• tax compliance automation 
• research and development tax incentive 
• remuneration and benefits (share schemes) 
• State taxes (Stamp Duty, Land Tax, GAIC).

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