|
|
Issue 121, 24
February
2006
Welcome to the latest issue of Thomson’s
Tax & Accounting Insight, your free news service for tax
and accounting professionals.
Tax & Accounting Insight is the easy way to
keep up with the latest developments in your industry. Watch your
inbox for your fortnightly issue of this free, informative service
from Thomson.
|
|
Articles
in this edition include:
Editorial
Enquiries:
Tel: 1300 304 197
LRA.Support@thomson.com Copyright:
Thomson Legal & Regulatory Limited
ABN 64 058 914 668
35 Cotham Road
Kew Vic 3101
All rights reserved. To subscribe,
please click
here. To unsubscribe, please reply
to this email with Unsubscribe in the heading. Disclaimer:
The information contained in this bulletin neither represents nor
is intended to be legal or professional advice. While every care
has been taken in its preparation, no person should act
specifically on the basis of the material contained herein. If
expert assistance is required, competent professional advice
should be obtained. Privacy
Policy |
|
Use of
ABNs for companies and trusts
Section 153 of the Corporations Act 2001 (CA) requires a
company to set out its Australian Company Number (ACN) on all its
public documents. If the company’s name appears on two or more
pages of the document, this must be done on the first of those
pages.
This requirement under section 153 may be satisfied by a
company setting out its Australian Business Number (ABN) on its
public documents if the last nine digits of its ABN are the same
(and in the same order) as its ACN (section 1344 of the CA).
Section 29–70 of the A New Tax System (Goods and Services
Tax) Act 1999 (GST Act) requires tax invoices for taxable
supplies under the GST Act to include the ABN of the entity that
makes the supply. There is no general obligation under the GST Act
requiring entities to set out their ABN on other documents.
However, under the PAYG Withholding Rules in section 12–190
of Schedule 1 to the Taxation Administration Act 1953, an
entity must withhold 48.5% from a payment it makes to another
entity for a supply in the course or furtherance of an enterprise
if the ABN of the entity making the supply has not been quoted.
Summary
Companies:
- are under a legal obligation to
set out their ACN on all their public documents, but may set
out their ABN in place of their ACN if the last nine digits of
the ABN are the same as the ACN;
- are under an obligation to set
out their ABN on all tax invoices issued for taxable supplies;
but
- are not under a legal obligation
to set out their ABN on any other documents.
However, where an entity is required to make a payment for a
supply in the course or furtherance of an enterprise, the entity
must withhold 48.5% from any payment where an ABN has not been
quoted.
Thus, it is advisable that companies quote their ABN on all
contracts under which payments are required to be made to the
company, so that if a payment is required to be made at a time
when a tax invoice has not been issued, 48.5% of the payment
cannot be withheld.
Trusts:
- are under an obligation to set
out the ABN of the trustee in respect of a trust on all tax
invoices issued for taxable supplies; but
- are not under a legal obligation
to set out their ABN on any other documents.
However, where an entity is required to make a payment for a
supply in the course or furtherance of an enterprise, the entity
must withhold 48.5% from any payment where an ABN has not been
quoted.
Thus, where a company is acting in its capacity as trustee of a
trust, it is advisable that the ABN for the company in its
capacity as trustee of the trust be quoted on all contracts under
which payments are required to be made to the company, so that if
a payment is required to be made at a time when a tax invoice has
not been issued, 48.5% of the payment cannot be withheld.
This content appeared in Thomson’s March
2006 A-Z of Trusts Bulletin. This one-stop resource gives
you current, detailed information and practical assistance on
modern trust planning concepts and helps keep you informed about
relevant legal and procedural changes and their trust
implications. Have confidence choosing the best course of action
for your clients with regular update bulletins covering
contemporary developments and trust issues. To find out more about
A-Z of Trusts, click
here or phone Thomson Customer Service on 1300 304 197.
Return to TOP
|
|
|
Tax Office provides guidance on
anti-avoidance measures
On 13 December 2005, the Tax Office released Practice Statement
Law Administration PS LA 2005/24: Application of General
Anti-Avoidance Rules, which provides guidance to tax officers on
the application of the general anti-avoidance measures contained
in Part IVA of the Income Tax Assessment Act 1936 (ITAA
1936) and other general anti-avoidance rules (GAARs).
Tax officers will be required to follow the practice statement
when:
- proposing to make a
determination under section 177F (including for deemed tax
benefits under section 177E), section 177EA(5) or section
77EB(5) of ITAA 1936;
- proposing to make a
determination under section 67(1) of the Fringe Benefits
Assessment Act 1986;
- making a declaration under
section 165–40 of the GST Act 1999; or
- ruling on the application of
Part IVA or other GAARs in a private ruling, class ruling or
product ruling.
The practice statement also clarifies the role and
responsibilities of the GAAR panel within the Tax Office.
This summary article appeared in the March
2006 Recent Developments of Thomson’s The Accountant’s
Manual. For over 25 years, thousands of practitioners have
turned to The Accountant’s Manual for non-legalistic
assistance covering tax and accounting issues.
Complete with subscriber helpline,
subscriber webpage, tax rates and tables, handy tax tools plus
more, this valuable resource keeps you aware, and on top, of all
your crucial responsibilities. To find out more, click
here or phone Thomson Customer Service on 1300 304 197.
Return to TOP
|
|
|
ASIC launches reverse mortgage
calculator for seniors
ASIC has launched a new calculator to help older Australians
who may be thinking about taking out a reverse mortgage. ASIC says
the number of reverse mortgages on the market has increased
significantly, jumping from three to 18 products in the last two
years. Reverse mortgages allow older people to borrow money by
mortgaging their home, without having to pay back either the
amount borrowed or the interest due until they leave their home or
die. While reverse mortgages may provide a useful way to release
equity in people’s homes, they involve significant risks and
should be handled with care, ASIC’s Executive Director, Consumer
Protection, Mr Greg Tanzer said.
Mr Tanzer recommended that before people take out a reverse
mortgage, they:
- get independent financial advice
to help them decide whether the product is likely to be able
to meet their needs now and in the future;
- ask an independent solicitor to
check the contract and explain the fine print; and
- discuss their intentions with
their family.
The new calculator on ASIC’s consumer website FIDO
— shows how debt can build up and may affect how much of a home
a person still owns as time goes by. The calculator shows the
effect on the equity in a home based on decisions people may make
about:
- how much they borrow;
- whether they take an initial
lump sum, or arrange regular payments or a combination of
both;
- how long they borrow for;
- interest rates and various fees;
and/or
- changes in home values.
ASIC says that, unlike some other calculators that tell only
how much people can borrow, the FIDO calculator shows the likely
long-term impact of one of these products on people’s level of
equity in their homes. For example, in most cases, the size of the
loan is likely to double within 10 years.
A user guide includes explanations and useful tips about
reverse mortgages. It is also on the ASIC
website.
This article appeared in Thomson’s Weekly
Tax Bulletin (Issue 7, February 2006). Weekly Tax Bulletin is
the most comprehensive and informative tax news service available
in Australia. It provides, in clear terms, the most accurate
record of tax and related developments. Weekly Tax Bulletin covers
everything from cases, new legislation, tax rulings and major
announcements to detailed practitioner articles. Special coverage
is given to year-end tax planning, the Federal Budget and newly
introduced tax legislation, as well as major tax developments. To
find out more, click
here.
Return to TOP
|
|
|
Thomson special offers and product alert
Quick Fact Finder: Self-managed Superannuation Funds
This how-to guide is the faster way to find essential SMSF
information. Organised by subject with handy quick-find tabs, it
saves research time by consolidating the SMSF facts you need into
one detailed resource. Updated each year in July (approx.) in line
with post-Budget rate changes, it gives you practical signposts
towards effective SMSF management, including specialist
commentary, checklists, forms and worked examples.
For more information call 1300 304 197 or email LRA.Support@thomson.com
NEW RELEASE: The Accountant’s Manual IFRS Implementation in
Australia guide 2006 edition
Authored by Moore Stephens, this timesaving reference details
further interpretations of AIFRS and continuing improvements
within the adoption process, including:
- updated and expanded summary
sections for most standards;
- sample statements detailing
changes to the presentation of the income statement and
balance sheet in accordance with new AASB 101;
- new sections and tables; and
- a new Appendix in table format,
listing standards and the relevant administration of
accounting treatments and tax issues.
Subscribe now to The Accountant’s Manual online and in
addition to its wealth of essential accounting, tax and business
solutions, you’ll receive the guide FREE.
For more information call 1300 304 197 or email LRA.Support@thomson.com
FBT Compliance Toolkit
This timesaving CD-ROM and supporting looseleaf is all you need
for fast and easy FBT compliance in 2006. Perform FBT calculations
quickly and easily, produce a Tax Office-approved FBT return and
automatically produce a payment summary (group certificate) report
for each employee. And, as a subscriber, you’ll have exclusive
access to a dedicated Technical Helpline provided by authors Moore
Stephens.
Click
here for more information or call 1300 304 197.
Return to TOP
|
|
|
