Australian Tax Forum

Articles from the current issue:

• The impact of tax rate changes on capital gains realisations: evidence from Australia

  shopping_cart Add to cart 01 Dec 2018

  Australia experienced a major reduction to the rate at which capital gains are taxed on the introduction of the “50% CGT discount” in the 1999‑2000 fiscal year. Claims made at the time of this effective capital gains tax (CGT) rate reduction suggested it would lead to increased realisations as well as an increase in tax revenue. Using time series data from 1988‑89 to 2014‑15, the authors estimate the capital gains realisations response for Australian personal taxpayers. The authors’ elasticity point estimates imply overall revenue losses from the introduction of the CGT discount.

• Why does China have a state-oriented attitude towards tax incentives?

  shopping_cart Add to cart 01 Dec 2018

  Tax incentives have contributed enormously to the rise of China’s economy. Since the “reform and opening‑up” policy in 1978, Chinese tax incentives have experienced fluctuations. China has tailored its tax incentives to create a level playing field in the market. However, China still has a state‑oriented attitude towards the granting of tax incentives. This attitude tends to treat tax incentives as instruments to achieve policy goals, but they often lack the necessary legal control.

• Book review – Comparative taxation: Why tax systems differ

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  This book has a somewhat unconventional history. Its inception was a publication by Professor Cedric Sandford in 2000. This seminal text was influential in the fields of tax policy and administration worldwide. It also gained salience with an audience of tax academics and students. The most recent, 2017, version of the book — with an updated title and the addition of four highly esteemed tax professors as authors — is likely to achieve similar recognition and prominence. While Professor Sandford passed away in 2002, his contribution is acknowledged with his inclusion as an author in this 2017 text.

• The age of the home worker – Part 1: Deductibility of home occupancy expenses

  shopping_cart Add to cart 01 Dec 2018

  The number of workers including employees that make use of their home to work has increased considerably in recent years. The authoritative court cases on the deductibility of home office occupancy expenses, the main ones being rent of premises and interest on home loans, were decided in a past era of work practices that differed from current work practices, including the rise of the mere contemplative (knowledge) worker. Given the extent of taxpayers with outstanding home loans (35% of Australian dwellings) and the extent of renters of homes (31% of dwellings), the deductibility issue is significant.

• The income tax exemption of charities and the tax deductibility of charitable donations: The United States and Australia compared

  shopping_cart Add to cart 01 Dec 2018

  This article analyses and compares the income tax exemption for charities and the tax deductibility of donations to charities in the United States of America and Australia both from a fiscal and social perspective. It commences with an explanation of not-for-profit status and the development of the legal concept of charity in both countries. It then compares the different approaches in Australia and the US to this legal concept and the rise of the income tax exemption and its significance both financially and socially.

• Inland Revenue’s strategic and regulatory management of tax system integrity and taxpayer perceptions

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  This article examines Inland Revenue’s strategic and regulatory management of its responsibility in s 6 of the Tax Administration Act 1994 (NZ) to protect the integrity of New Zealand’s tax system and taxpayer perceptions of that integrity. A strategic rethink that took place in 2001 first set Inland Revenue down the path of an approach to tax administration based on the principles of responsive regulation. In line with this approach, Inland Revenue introduced its compliance model that underpins tax administration and introduced a new taxpayer charter. Other changes saw Inland Revenue release its first‑ever Statement of Intent and revise some of its internal policies and procedures.

• Time to upgrade Australia’s company tax system from imputation to integration

  shopping_cart Add to cart 01 Dec 2018

  The 1981 Campbell Committee report unsuccessfully recommended that Australia replace its then classical company tax system with an integration system that allocates companies’ annual pre‑tax economic income (including accrued gains) to their shareholders’ personal tax assessments, even when no cash distributions are made. Since then, the scene has been set for serious consideration of a practical form of integration by a number of tax changes in Australia: a full imputation system that provides shareholders with credit for company tax paid on their dividend receipts; general capital gains taxation; and refunds of excess imputation credits.