News Room - Business
Welcome to VKC Tax News October 2017 Edition!
This edition highlights the following:
1. The small business concessions namely the various turnover thresholds and their corresponding corporate tax rate.
2. The rate that applies to a sole trader benefiting from these concessions.
3. What to do if your company tax return was lodged early and was based on the 30% rate.
4. The extension of the instant asset write off of $20,000 to 30 June 2018.
5. Draft tax legislation relating to passive investment companies and how they do not qualify for the lower corporate tax rate of 27.5%.
6. Withholding obligations applicable to:
- Salary and Wages
- Closely held trusts
- Withholding in business transactions
"Any business or organisation carrying on an enterprise should quote their Australian business number (ABN) when supplying goods or services to another enterprise. If the supplier does not quote their ABN, the general rule is that the payer must withhold 47% (from 1 July 2017) from their payment and send the withheld amount to the ATO".
- Withholding from unused leave payments on termination of employment
- Withholding from dividends paid to foreign residents.
7. Superannuation - Key super rates and thresholds
8. Changes to PAYG Instalment conditions
Should you have any queries please contact Fran on email@example.com
VKC Consulting Pty Ltd
Welcome to VKC Tax News Special Budget Edition 2017/18.
We have reviewed and summarised the most significant budget announcements in our opinion and have commented on some of them.
Some of the main tax and business items that may have an impact on our clients and their businesses are as follows. The other announcemens can be found in our newsletter.
- The extension of the $20,000 instant asset write-off to 30 June 2018
- A number of housing affordability measures including some concessional tax treatments and increased CGT discounts for quaifying taxpayers
- Taxable reporting system will extend to two high-risk industries namely Cleaning & Courier
- Opportunities for SMSF members to use related party transactions on non-commercial terms to increase superannuation savings will be reduced from 1 July 2018
- GST removed on digital currency
- A numbers of tax changes for individuals
This has been compiled using information from:
- Budget papers (www.budget.gov.au)
- The Tax Institute
- Institute of Chartered Accountants in Australia and New Zealand
- Wolters Kluwer Tax Team
Please refer to our newsletter & disclaimer for more information.
Welcome to the March 2017 Edition of VKC Tax News!
We have changed the format and content of our newsletters to separate the technical and the non-technical articles and also to include a short mention about our business clients at the rate of one client per newsletter. Please contact us if you would like to do small write-up about your business in the coming newsletters.
The new change means that there will be a number of special interest topics which will be released in stand-alone newsletters such as 'GST matters' which our team is working hard on to issue it by the end of March 2017.
The March 2017 newsletter contain the following information:
1. Ride sourcing drivers (including UBER drivers)
74,000 individuals have offered or are offering this service at the present time. The ATO will request all details of payments made to ride sourcing providers from accounts held by a ride sourcing facilitator's financial institution for the 2016-2017 and 2017-2018 financial years.
2. Foreign resident capital gains tax withholding
Foreign investors may be subject to a 10% Foreign resident capital gains witholding tax applicable to contracts entered into after 1 July 2016.
3. Commercial Website Expenditure
The main points from Taxation Ruling TR 2016/3 have been extracted and summarised as per below. The ruling offers guidance as to how to treat the following costs:
- Website setup costs
- Website maintenance costs
- Adding a functionality to an existing website
- Social media presence and its ongoing costs.
Hint: A website is not a depreciable asset unless it is classified as 'in-house software'.
The newsletter contains other topics of interests.
For any feedback, please contact Fran Zacharellis (firstname.lastname@example.org)
Callum, Fran & Vik
December 2016! How you have come around fast!
Just a few points from the attached newsletter:
- The company tax rate has come down to 27.5% for the year ending 30 June 2017 for companies with less than $10m turnover.
- The corresponding benefit for unincorporated taxpayers will be reflected by an increase in the small business entity tax offset from 5% to 16% over the next 10 years.
- The ATO has announced that it will offer a 'one chance' approach before imposing penalties in a number of circumstances. We are of the opinion that this will be beneficial to a number businesses - start-ups, buy-ins and restructured businesses among others.
The team at VKC wishes you a fantastic Christmas break and a super New Year 2017!
Three months down, only nine more to go before the end this financial year! In the meantime there have been a number of changes that required our attention. These are listed out in more detail in the attached newsletter. A summary of the changes are below:
- Only 9 months are left to benefit from the $20,000 instant asset write-off.
- New tax rules introduced for property sales over $2 million to strengthen the foreign resident capital gains tax (CGT) regime to assist in the collection of the CGT liabilities of foreign residents. Sellers of a Taxable Australia Property with a market value of $2 million or more may be subject to a 10% withholding tax.
- Benchmark interest rate of 5.40% applies for the 2016-2017 year for Division 7A purposes.
- Tax implications for the sharing economy (renting out a room/house on a short-term basis, renting out parking spaces and completing odd jobs among other examples)
- Changes in the CGT treatment of earnout right created on or after 24 April 2015. Earnout arrangements are often used when parties cannot agree on the value of the business at the time of sale.
- Overseas businesses will be required to pay GST on international sales of digital products (e.g. an app on the apple app store) provided to Australian consumers if Australian sales exceed the $75,000 GST threshold.
- Simplified GST accounting methods are available to small food retailers (restaurants, cafes and caterers).
- Latest ATO benchmarks have been released for a number of industries. Link is available in the attached newsletter.
- More information is available about the Phoenix Taskforce set up by the ATO. Fraudulent 'Phoenix' activity occurs where a company deliberately goes into liquidation to avoid paying creditors, taxes and employee entitlements.
If you have any queries about the above updates please do not hesitate to contact one of the tax practitioners at VKC Consulting Chartered Accountants.
Welcome to the June 2016 edition of VKC Tax Business News! We touch on the main points of the 2016-2017 Federal Budget, which in our opinion are:
- The increase in the small business entity turnover (from $2m to $10m) to access SBE Income Tax Concessions
- The unincorporated small businesses tax discount introduced in the 2016 fiscal year at 5% will increase to 8% in the 2017 fiscal year. Hereafter it will reach its peak of 16% in the 2027 fiscal year
- Division 7A and the introduction of a self-correction mechanism for inadvertent breaches
Small Business Restructure Rollover
The SBR rollover announced in the 2015-2016 Federal Budget allows active assets to be transferred from one entity to one or more other entities without triggering a taxing point.
The active assets transferred may be:
- CGT Assets
- Trading Stock
- Revenue Assets
- Depreciating Assets
Please refer to the article to read more about the conditions of this rollover and please contact us to understand its mechanism and how it may or may not work for your business.
Employees v/s Contractors
We work with small business owners very frequently to assist them in working out:
- the difference between employees and contractors
- common errors/myths about contracting
- the status of their workers (whether they can be deemed to be employees)
- the tax and super consequences for each
Please refer to the attached article for further information and please speak to one of our professional tax practitioners to discuss any matters or topics of interest.
The 2016-2017 Federal budget was handed down on 3 May 2016 with intent to set out an economic plan to ensure Australia successfully transitions from the mining boom to a stronger, more diversified economy.
Small Business Entity Concessions
From 1 July 2016 the small business entity (SBE) turnover will be increased from $2 million to $10 million. Qualifying taxpayers will be able to access a range of income tax concessions. However the small business Capital Gains Tax concessions will only be accessible by businesses whose turnover is less than $2 million.
Collective Investment Vehicles
From 1 July 2017, a new tax and regulatory framework will be introduced for two new types of collective investment vehicles (CIV):
- Corporate CIV (From 1 July 2017)
- Limited Partnership CIV (From 1 July 2018)
Further details about the following can be found in the attached newsletter:
- Unincorporated small business tax discount
- Reduction in the company rate
- Division 7A updates
- Reduction in the Division 293 tax income threshold
- Reduction in Concessional and Non-Concessional contributions cap
- Adjustments relating to Deferred Tax Liabilities will be removed from the entry and exit tax cost-setting rules under the tax consolidation regime
- From 1 July 2017, a 40% tax will apply to artificially diverted profits from Australia by multinational corporations.
If you have any queries about the new measures please do not hesitate to contact one of our tax practitioners at VKC Consulting Chartered Accountants.