Welcome to the November edition of ConTax - your quarterly student e-newsletter from The Tax Institute. We hope that you find it useful and relevant to your studies.
As a Student Member, you have FREE access to the current volume of Taxation in Australia, The Tax Institute's monthly Member-only journal and FREE access to the weekly TaxVine news service. Content on our website goes back until 1996 and includes over 50,000 items allowing you to source the best tax articles and achieve your best marks.
Tax Careers Online
Tax Careers is a dedicated tax recruitment and online careers service within The Tax Institute website, open to all members, student members and tax professionals Australia wide.
The Tax Careers website offers a valuable and secure service to members and tax professionals within Australia who are currently looking for tax related jobs. The website brings together candidates and employers in an online environment.
Job seeker benefits include:
- Search for job roles in tax from a range of sectors, job categories and in any location across Australia
- No cost to job seekers
- Secure online information exchange
To register your interest as a job seeker or to find out more information, visit Tax Careers now.
Feature Article - Prescriptions for reform of Australia's superannuation tax concessions
Contributed by Kerrie Sadiq • School of Accountancy • Queensland University of Technology
The highly controversial and often politicised issue of Australia's retirement savings regime featured prominently throughout the two day Federal Government's October 2011 Tax Forum. Calls for reform of this regime are by no means new. Reform debate over the years has focused on each of the three separate pillars: the age pension, compulsory superannuation, and voluntary saving, as well as the interaction of those three elements. However, recently there has been a significant shift away from reliance on the age pension, with its associated risks falling to the government, to a defined contributions scheme where the associated risks fall to the individual taxpayer. Consequently, Australia's superannuation regime is predominantly subject to current debate, and, as such, the subject of this article.
This article considers the history of Australia's retirement savings regime, along with a framework for evaluating the superannuation tax concessions. It then discusses the recommendations of the Australian Future Tax System (AFTS) Review Panel and ensuing debate at the Tax Forum. Finally, it suggests two proposals to achieve the objectives of the AFTS Review in relation to retirement, those objectives being a system which is broad and adequate, acceptable to individuals, robust, simple and approachable, and finally sustainable. The first, whilst potentially requiring some 'tinkering', is relatively simple and a blue print has already been provided to the Federal Government ñ the adoption of Recommendations 18 and 19 of the AFTS Review. The second is one of management. Superannuation concessions are fundamentally categorised as tax expenditures and the management of these tax expenditures, not just the reporting, should be undertaken.
Click here to read this article in full.
Sample Exam Questions
Contributed by: Tom Delany, CTA University of Southern Queensland
Jane owns and operates a computer store selling computers, related hardware and software. Jane was approached by a new computer manufacturer Computer Works Ltd requesting Jane to sell their computers to her customers. In consideration of Jane promoting the computers to her customers Computer Works provided or paid for the following items:
- Computer Works paid $3,000 in advertising costs for Jane to promote her business and the Computer Works computers to the public.
- A new computer (effective life 3 years) with a market value of $2,500 was provided to Jane to enable Jane to keep her accounting records for the business.
- A holiday to the value of $1,880 for Jane and her partner Matthew in Phuket.
Based on these transactions what amount should Jane include in her assessable income for the year ended 30 June 2012? Support your answer with reference to appropriate authority.
Taylor Pty Ltd (Taylor) carries on a business buying and selling sports shoes. Taylor does not have a physical retail outlet and processes all of its sales over the Internet through an on-line retail platform. The company has a warehouse in Brisbane in which it stores and dispatches the stock. The following are a number of transactions that it undertook in the year ended 30th June 2012:
- On 15th June 2012 Taylor ordered $56,000 of football boots from a Melbourne manufacturer and paid for the stock on that date. The football boots did not arrive at the Brisbane warehouse until 4th July 2012.
- On 22nd June 2012 Taylor ordered $43,000 of soccer boots from a Sydney manufacturer, paid for them on that date and collected the boots from the manufacturer on 25th June 2012 in its own truck. Taylor listed the soccer boots on its on-line sales portal from 25th June 2012.
- Taylor incurred selling costs of $120,000 to operate its on-line sales platform and pay casual wages to its employees.
- Taylor incurred insurance costs of $3,000 to insure the transport of the soccer boots purchased from the Sydney manufacturer.
Based on this information what amount of deductions are available to Taylor for the year ended 30 June 2012? Support your answer with reference to appropriate authority.
See the full question and suggested solutions here.
Start your journey to international recognition
The Chartered Tax Adviser Program is The Tax Institute's pathway to achieving the sought-after Chartered Tax Adviser status.
By enrolling in CTA1 Foundations, ideal for recent graduates, you can bridge the gap between your tertiary studies and workplace practice, and expand your knowledge across the different area of tax law, giving your career a competitive edge. CTA1 Foundations has an excellent reputation with employers as it provides you with a hands-on training, meaning you will gain confidence completing actual real-world tasks.
If you go on to complete CTA2 Advanced, you will achieve the sought-after Course in Australian Taxation Law award and meet the education requirements for registering as a tax agent.
3 reasons to study CTA1 Foundations
- Achieve your employment goals with access to industry resources and experts.
- Increase workplace productivity by undertaking everyday tax compliance tasks.
- Gain confidence with using key business systems and terminology.
Read what our graduates have to say about CTA1 Foundations.
Differentiate yourself and secure your future in the tax profession today
The next intake is open for enrolments and commences on 26 March 2013, with early enrolments closing on 19 February 2013.
Courses are available via face-to-face lectures in capital city regions, and some regional areas, or via distance study. Visit our website for more information.
Recent Tax Cases of Interest
Yazbek and FCT  AATA 477
FCT v Rawson Finances Pty Ltd  FCA 753
ECC Southbank Pty Ltd as Trustee for the Nest Southbank Unit Trust v FCT  FCA 795
Binetter v DCT  FCAFC 126
Annacott Pty Ltd v Konann Pty Ltd  VSC 389
Unit Trend Services Pty Ltd v FCT  FCAFC 112
FCT v Visy Industries USA Pty Ltd  FCAFC 106
Young Practitioner Profile
Name: Michelle Lim
Employer: McCullough Robertson Lawyers
I studied and completed my undergraduate double degree in Law and Economics. Like many law students, I wasn't sure how I ended up going down the Law path, almost a default course option, however I grew to really enjoy (most) of my Law degree. Economics was helpful to with understanding the "macro" side and policy and commercial reasonings of developments in taxation law.
While completing a tax law elective subject at university, I found my curiosity piqued in what was, to me, a really interesting and comprehensive area of law, bring into play various other dimensions of the law, e.g. corporate law, trusts law and administrative law (yes, slogging away at every subject does pay off in the end!).
Describe your current role
I started out my career as a graduate with the firm and completed one of my rotations in the Tax Group. I was admitted to practise last year and have been in the Tax Group since that time.
I am very fortunate to be able to work with colleagues who are experienced and passionate about tax, including under partners who are dual qualified as Chartered Accountants, who are able to add a further depth and practicality to the advice we give clients because they understand how the numbers and accounting process work.
I look forward to work (always a good sign in your early career years I am told) as there is always something new to learn while assisting clients in navigating the extensive, complicated and always changing area of tax law. It is really satisfying to be able to be able to analyse tax law as a whole, with its many moving parts, helping clients to plan and understand the taxation risks to make better business decisions or overcome complicated hurdles!
Examples of the type of work I have been involved in the Tax Group include:
- assisting with tax audits and with related settlement and payment arrangement negotiations with the Australian Taxation Office and state revenue authorities;
- tax advice and implementation of restructures, especially in the SME and retirement village space;
- tax advice on inbound and outbound investment, including analysis of controlled foreign company rules, withholding tax etc.
- GST, land tax and payroll tax advice;
- private ancillary fund establishment; and
- other general trusts and estate planning.
Describe your The Tax Institute committee or contributing involvement (if applicable)
I am not personally involved in committees at this stage, however I am a regular attendee of The Tax Institute's Younger Tax Professionals series.
I find the seminars really useful and practical as it is targeted at providing foundational knowledge with practical 'daily work life' discussions. I have personally experienced that it is also a great platform to meet and maintain relationships with other 'early career' practitioners.
What are your career highlights?
One highlight that springs to mind is my involvement in a land sale transaction for one of our clients to an overseas listed Real Estate Investment Trust, followed by a corporate restructure. There was some complex tax issues we had to advise on in conjunction with property issues as it involved planning to manage tax effectiveness for all parties involved. The transaction negotiations were particularly demanding flowing from the need to comply with Australian and overseas tax and corporate law, Australian foreign investment rules and also Islamic financing principles. It was a really good experience overall for a junior practitioner and I am really glad I had the opportunity to be involved.
Why did you join The Tax Institute?
What advice can you give to graduates?
- Be patient if you wish to pursue a career in tax and be willing to pursue further study. Tax is a very involved and elaborate area and it will take many years before you feel like you get the hang of it, especially if you do more 'general' tax technical.
- Don't be concerned with the stereotype of a 'tax nerd'. It is one of the most interesting and ever-changing areas of law, impacting on all business and everyone's personal financial decisions at some stage in life.
What do you do to unwind?
I enjoy reading cookbooks and doing community projects work with my church during my spare time. I think it is important that graduates have a life outside work too!
Register for our free online Chartered Tax Adviser information session
What does the future look like for the tax profession in Australia and internationally? As a tax professional how will you be seen? If you are considering working in tax, you need to look towards the future and discover what becoming a Chartered Tax Adviser could mean for you, and your career.
We invite you to join us for a free online information session tomorrow night to help you make an informed decision about the future of the tax profession and your role in it.
The information session is being held tomorrow night at 6:00pm.
Top Ten tips to pursue a career in tax
- Study: Complete an undergraduate degree in accountancy or law
Completing a university degree is critical to beginning a career in tax. Without one, you're unlikely to even make it onto an employer's radar.
- Build up your professional capabilities
Undertake continuing professional development opportunities such as attending seminars and training events to ensure your skills are continually improving. This will give you a head start over your competition.
- Learn from the best: Join a professional association such as The Tax Institute
Joining an industry association gives you access to many services and benefits such as training and networking, and keeps you up to date with the latest developments.
- Start networking
Building networks within your own organisation and the broader professional environment will help you tap into the expertise and experience of those around you, improving your skills.
- Find a mentor
A career mentor is someone who acts as a counsellor, a motivator, and a guiding force in your career. This would be a person with whom you can talk freely and from whom you can expect to receive sound, unbiased career advice. Having a good mentor can significantly boost your career prospects and growth.
- Be enthusiastic
Your enthusiasm for your job and willingness to help others will go a long way towards making you a valuable member of your team.
- Be a good team player
A job well done requires input from all members of the team. Whether you’re a graduate or the Head of Tax, in order for the team to succeed, you need to do your job well and assist team members where possible.
- Downtime: Don't forget to enjoy yourself
Work life balance is important to any profession. Extracurricular activities demonstrate to your employer that you are a well-rounded person with a life outside of work.
- Know what is making news: Be aware of market trends in the corporate world
Tax does not exist in isolation. Developments throughout the corporate world often have tangible effects on the tax profession. By thinking and acting commercially you will be an invaluable asset and adviser to your team and clients.
- See the big picture: Demonstrate a desire to help your clients grow outside tax-related fields
Taking a broader view of helping your clients grow demonstrates you actually care about their success, and are not just interested in getting paid. This shows your integrity and builds trust.
From the blog
5 October 2012 - Learn from the best and brightest in tax
11 October 2012 - Social media for tax professionals: getting started with LinkedIn (Part 1)
19 October 2012 - A membership update from the CEO
12 October 2012 - The future of the tax profession and you
7 November 2012 - Introducing The Chartered Tax Adviser Program
Special offers from our Business Alliance Partners
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