Lowering our 30% corporate tax rate for large taxpayers, down to the 25% rate for SMEs supported by OECD and tax advisers

The OECD recently recommended that our uncompetitive 30% corporate rate be lowered to the 25% rate applicable to SMEs, which has been echoed by taxpayers and advisers complaining that this ‘two-tiered’ system distorts how businesses grow and structure their operations.

See below for further details.

[Tax Month – April 2021]

OCED’s BEPS – Pillars 1 & 2 get boost by Australia’s Mathias Cormann becoming CEO and US Janet Yellen endorsing these measures (along with a 28% US rate)

Australia’s Incoming OECD boss Mathias Cormann and former finance minister, and US Treasury Secretary’s call for a minimum multinationals tax rate, present a potentially “remarkable” opportunity to strengthen global rules.

See below for further details.

[Tax Month – April 2021]

Merchant v CofT – decision to disqualify SMSF trustees – AAT would not defer the review until after tax objections relating to the same transaction were determined

The AAT has rejected an application, to adjourn its proceedings, for review of decisions to disqualify the applicants, as trustees of superannuation entities, pending the outcome of challenges to income tax assessments based on the disqualifying transactions.

See below for further details.

[Tax Month – April 2021]

JobMaker – Instrument allowing alternative means to report necessary information (other than through STP)

On Friday 16 April 2021, the Commissioner of Taxation made an instrument called the JobMaker Hiring Credit Reporting Obligations Amendment Instrument 2021 under s20(4) of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and s27(3) of theCoronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules) and this instrument was registered on Tues 20.4.21. Its effect…

PAYG obligations for remediation payments made by financial institutions following the Hayne Banking Royal Commission – how might PAYG arise?

The ATO has released a fact sheet on its Legal Database outlining the PAYG withholding and reporting obligations for financial institutions that may arise from making remediation payments, following the Hayne Royal Commission into banking and financial services malpractice (eg. restitution for fees charged for no service). If you’re like me, you might be wondering how compensation…

Budget super reforms introduce ‘sovereign risk’ into the $3t super industry – how could that be so?

AustralianSuper chief Ian Silk has accused the Morrison government of introducing “sovereign risk” to the $3 trillion superannuation system – but how could that be so? Is legislation heavily crimping advertising funds really ‘sovereign risk’, or is it the power to promulgate regulations that ban certain superfund transactions? See below for details. [Tax Month –…

Janet Yellen decries the global ‘race to the bottom’ on Corporate Taxes – Don’s 21% to be replaced with Joe’s 28% to fund a belated COVID $3t stimulus package

Dr Yellen was appointed chair of US Federal Reserve Bank by President Obama, was not reappointed by President Trump, and when America went back to a Democrat President, Joe Biden appointed her Secretary of the Treasury. In early April 2021, she gave broad brush speech on US tax policy, to the Chicago Council on Global…

Victoria Power Networks Pty Ltd v CofT – ATO Decision impact statement – customer connection contributions to Electricity Distributors and their rebates to customers

The ATO has issued a decision impact statement on Victoria Power Networks Pty Ltd v FCT [2020] FCAFC 169 (see earlier TT article). This upheld the earlier decision of Moshinsky J in the Federal Court (same parties) [2019] FCA 77 – holding that contributions, customers made to Distributors, were ‘ordinary income’ but the Court changed…