Your Association at work - 21 January 2010 update

Your Association at work

Recent activities by way of ‘member representation' include the following.

Submissions to Treasury

1.     Tax Laws Amendment (Transfer of Provisions) Bill 2009

The draft legislation rewrites, and transfers to ITAA97, the following provisions presently contained in ITAA36:

• Part V1: Collection and Recovery
• Schedule 2C: Forgiveness of Commercial Debts
• Schedule 2E: Leases of Luxury Cars
• Schedule 2G: Farm Management Deposits
• Schedule 2J: General Insurance

• Exposure Draft: 25% Entrepreneurs' Tax Offset

The draft legislation amends the law which governs the entitlement of taxpayers to the entrepreneurs tax offset (ETO).
Importantly, the legislation proposes to introduce an income test whereby the ETO would phase out for individuals with income for ETO purposes in excess of $70,000 and for families with incomes over $120,000.

Submissions to the Tax Office

1.    Taxation Ruling 2009/D5*

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.

2. Frequently Asked Questions: Section 23AG

From 1 July 2009 significant changes have occurred in relation to the operation of s23AG ITAA36, to the extent that most resident Australian taxpayers working overseas on short-term assignments will no longer be exempt from tax in Australia. Rather, they will be subject to Australian tax on foreign employment income with the possibility of a tax offset being available in respect of the tax paid in the foreign jurisdiction.

There are many practical difficulties for employers and employees as a result of the changes to the law. In recognition of this situation, the Tax Office has prepared a ‘frequently asked questions' paper which attempts to provide compliance guidance. 

Taxpayers Australia has provided comments on the draft Tax Office document and have made suggestions for improvement.  When the document is complete, it will be posted on the Tax Office website.