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Submissions

The Tax Institute is the most respected and influential contributor to the development of tax policy and administration in Australia. As part of this contribution, we prepare top level submissions on tax policy, administration and technical matters at both Federal and State levels. Non-confidential submissions prepared from 1996 onwards and covering legislation, ATO and Treasury consultative documents and papers, as well as rulings, determinations and a range of other ATO opinion and guideline documents, are available here.

  • Targeted amendments to Division 7A

    23 Nov 2018

    In our opinion, the Government’s approach in the Consultation Paper reflects an attempt to only selectively adopt some of the recommendations of the Board of Taxation Post-Implementation Review of Division 7A dated November 2014.

    The Board’s Division 7A Report made wide ranging recommendations precisely because one of the criticisms of the evolution of Division 7A was the constant ‘band-aiding’ of the Division. The Board therefore specifically rejected this as an approach and recommended a package of measures that could be adopted as a replacement to Division 7A.

    The Board of Taxation’s recommendations were made after extensive consultation and engagement with practitioners, the ATO, Treasury officials and taxpayers. In our opinion, the Consultation Paper should clearly outline why recommendations have not been adopted.

    In our opinion, the measures in the Consultation Paper represent another band-aid fix to Division 7A. The Government needs to reconsider this approach and revisit the recommendations made by the Board of Taxation. We would strongly encourage the government not to continue the errors of the past by, once again, applying band-aid fixes to the Division.

  • Review of the Income Tax Residency Rules for Individuals

    20 Nov 2018

    As Australian residence is one of the two foundation stones upon which Australia’s taxation jurisdictional claim rests, the importance and potential impact of this review of individual residence cannot be underestimated.

    Our submission addresses each of the design principles in the Consultation Guide rather than focussing on each individual question. There are two overarching concerns, being:

    • That the proposed changes ensure that the goals of certainty and simplicity are met and not frustrated by an integrity regime that seeks to deal with rare occurrences that arise not necessarily due to residence abuse but often due to the operation of other provisions of the Income Tax Assessment Acts; and

    • That the reform proposals mooted in the Consultation Guide will expand the scope of persons caught by the rules. This is so notwithstanding the assertion that the stated intention (on page 26 of the Consultation Guide), is that the revenue impact of the measure will be ‘immaterial or negligible’.

    Our view is based on the proposals which would include the development of a more adhesive residence rule, the creation of two clear bright-line tests (which may include the measurement of presence over any 12-month period) and a factor test coupled with revision of the superannuation test. Therefore, in light of these potential Page 2 impacts the Taxation Institute urges the Board to undertake the modelling and associated costings appropriate in the context of this major reform of Australia’s jurisdictional change.

  • Miscellaneous amendments to Treasury portfolio laws 2018

    08 Nov 2018

    The Tax Institute welcomes the opportunity to make a submission to Treasury in relation to the Treasury Laws Amendment (Measures for a later sitting) Bill 2018: Miscellaneous amendments Exposure Draft (Exposure Draft). The Tax Institute seeks to address one matter in the Exposure Draft in relation to the amendment to subparagraph 14-255(1)(b)(i) of the Taxation Administration Act 1953 (Cth) (TAA).

  • Enhancing the integrity of tax deductions in relation to vacant land

    02 Nov 2018

    From 1 July 2019, the proposed legislation will limit deductions for expenses associated with holding vacant land. The measure does not apply to expenses associated with holding vacant land that is used by the owner or a related entity to carry on a business. 

    Members are concerned that the Government has significantly underestimated the scale and scope of arrangements that are going to be affected under the proposed legislation. Further, in our opinion, the proposed legislation creates significant uncertainties. As the law is currently drafted, if land is not genuinely held for the purpose of generating assessable income, the costs are not deductible. In our opinion, the integrity issues should be addressed through better enforcement rather than making the tax system more complex by introducing further legislation.

  • Work test exemption for recent retirees – Draft legislation and regulations

    02 Nov 2018

    The Tax Institute welcomes the invitation to make a submission to Treasury in relation to the Government’s work test exemption for recent retirees. The stated objective to the proposed legislation and regulations is to provide a one‑year exemption from the work test for superannuation contributions, to allow recent retirees to boost their superannuation balances.

  • Discussion paper on issues concerning earnout arrangements

    01 Nov 2018

    The Tax Institute is concerned with the approach the ATO is taking to earnout arrangements and interpreting earnout rights as if they create a ‘separate asset’ and, in particular, that this would create differing tax outcomes in respect of earnout arrangements. The Tax Institute does not agree with this position. Our submission addresses the questions in the Discussion Paper with this in mind.

  • Draft LCR 2018/D7: Base Rate Entities and Base Rate Entity Passive Income

    05 Oct 2018

    The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office in relation to the Draft LCR 2018/D7: Base Rate Entities and Base Rate Entity Passive Income (Draft LCR). Our submission below addresses our main concerns in relation to the Draft LCR. In particular, we have made comments in relation to certain definitions used in the Draft LCR; some of the examples in the Draft LCR; and some minor comments in relation to some of the guidance documents referred to in Appendix 1 of the Draft LCR.

  • The Tax Institute Superannuation Reforms Priority List – Proposed solutions

    03 Oct 2018

    Further to a Superannuation Reforms Priority list we submitted to Treasury and the ATO on 21 June 2018 (refer Annexure A), and a meeting with Treasury and the ATO on 1 August 2018 - The Tax Institute has suggested solutions in relation to the reform issues we raised in our Superannuation Reforms Priority list. The purpose of this letter is to outline our suggested solutions in relation to the legacy pension issue raised in our Superannuation Reforms Priority List.

  • PCG 2018/D6

    21 Sep 2018

    The Tax Institute welcomes the invitation to make a submission in relation to Practical Compliance Guideline PCG 2018/D6: The Commissioner's discretion to extend the two-year period to dispose of dwellings acquired from a deceased estate.

  • Three-yearly audit cycle for some SMSFs

    03 Sep 2018

    The Tax Institute welcomes the invitation to make a submission to Treasury in relation to the ‘Three-yearly audit cycle for some self-managed superannuation funds’ Discussion Paper dated July 2018 (Discussion Paper). The Tax Institute does not support the proposal for a three-yearly audit cycle for SMSFs and has detailed the reasons within this submission. The Institute considers other alternatives should be investigated to achieve the objectives of reducing red tape and compliance burdens for SMSF trustees.