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Tax Institute Australia Senior Tax Counsel Report 22 March 2013

Friday, 22 March 2013   (0 Comments)
Posted by: SAIT Technical
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By Robert Jeremenko CTA

At last week’s Tax Institute National Convention, much of the discussion and technical output was focussed on the multitude of tax issues in the SME sector.

As politicians love to say, small business is the backbone of the Australian economy, responsible for approximately half of all private sector employment of the Australian workforce.

However, as demonstrated by the raft of tax issues raised and discussed at National Convention, the SME sector continues to be strangled by excessively complicated tax laws which are themselves littered with cumbersome ‘integrity provisions’. We remain concerned with this complexity and continue to advocate for the need to consider the unique investment, business and funding considerations that arise in the SME sector when writing tax laws.

To this end, we recently made a submission to the Productivity Commission with respect to their inquiry into "Regulator engagement with small business”.

In our submission we highlighted the need to:

  • consider the impact of ATO practices and procedures;
  • consider the effectiveness of tax measures intended to benefit small business; and
  • maintain momentum on simplifying complex tax laws (such as Division 7A, taxation of trust income provisions in Division 6 and the personal services income rules).

In addition to the above, we call for an examination of creating a separate entity for small business, that is, an entity into which existing structures can be rolled over, allowing for the benefits of discretionary trusts (such as streaming and the CGT discount) and/or retention of profits. Such an entity will corral many currently available tax advantages into one entity that can be administered more simply and effectively by taxpayers, tax agents and the ATO alike.

We look forward to continuing our engagement on these issues in the months to come.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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