The Board of Taxation is a non-statutory advisory body charged with contributing a business and broader community perspective to improving the design of taxation laws and their operation.
Ideas for better tax regulation
Main residence CGT special market value rule should be a choice
Section 118-192 of ITAA97 provides a special rule under which a main residence (if acquired after 20/8/96) is deemed to have been acquired at market value when it is first used to produce assessable income. Too many taxpayers don't get the valuation at the time (eg. because they thought they were going overseas for max 6 years so could use the absence choice, but ended up staying for 10 years) and there is no guidance on how do they then calculate their gain on disposal without that valuation. The ATO website (QC 17185) avoids the issue by giving an example of a property purchased prior to 21/8/96. Another page (QC 17193) gives great examples of taxpayers getting valuations on the assumption that they knew of this rule when first moving out and states that use of the special rule is compulsory. Why not make this special rule an alternative rule to the normal CGT calculation (proceeds less actual cost base, apportioned for the income producing period)? I cannot imagine that this would be a cost to the revenue. Rather it would be an aid to taxpayer compliance.
Review FBT compliance costs - please!
According to a Corporate Tax Association survey of its members, Fringe Benefits Tax (FBT) is a significant compliance burden on taxpayers and is in need of reform. Whilst there have been some compliance safe harbours developed for FBT log books, other areas need legislative reform to reduce the cost of compliance with little cost to the revenue. Some simple fixes would include: > Allowing for consolidation or grouping for FBT purposes > Introducing an exemption from FBT for employer provided child care provided at offsite facilities > More guidance on what amounts to minor and infrequent use in the context of exempt motor vehicles such as utilities. A threshold could be introduced under which, for example, 10% private use (by kilometres) would be considered minor and infrequent use and if you are over the threshold, FBT is calculated on a cents per kilometre basis on the excess. > Increase the current exempt reportable fringe benefit amount (RFBA) threshold of $2,000 to $4,000. The RFBA has not changed since 2006 (10 years). According to ABS data, over the period January 2007 to December 2016 the Australian CPI has risen by 96.5%. Consideration should be given to increasing the RFBA threshold to $4,000 to reflect the cost of providing benefits has increased since the $2,000 threshold was introduced. The RFBA should also be indexed annually to prevent RBFA bracket creep.
Super contribution info availability for tax agents
Currently there seems to be no way for tax agents to access taxpayer superannuation contribution details that the ATO holds. The ATO applies this info in assessing Div293 tax but the tax agent cannot accurately estimate for a client what the Div293 liability will be because tax agents cannot access the info that the ATO holds about contributions made on behalf of a taxpayer for a financial year. The tax agent can guess that there will be a Div293 liability based on income details in the tax return and reportable contributions on the payment summary and can estimate how much was paid in SG contributions. But due to timing diffs between when employers pay contributions and when those contributions are allocated to the employee's account by the fund, such calcs can only be a guess in the absence of the super contributions that the ATO holds. Could the ATO provide agents with this info, whether by way of a downloadable report or by way of lookup on the Portal?
Meetings & events
- 8 Dec 2016 - Board of Taxation Meeting in Melbourne
- 11 Nov 2016 - Board of Taxation Meeting in Canberra
- 11 Oct 2016 - Board of Taxation Meeting in Perth