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
Variable Company Tax Rate
Intent: Income derived from goods and services provided in Australia are taxed in Australia. How: 1. Company tax is either (choice is made by the Company) paid on revenue (at a low rate, say 1%) or profit (at a higher rate, say 30%). 2. Deductions are only allowed for domestic goods or services. Impact: 1. Foreign companies will create domestic companies (“Domestic Shells”) to service other domestic companies so that those domestic companies can get a deduction (otherwise the domestic companies wouldn’t buy the good or service). 2. The Domestic Shells would pay tax on revenue because without a deduction (there is no deduction because they are sourcing the good or service from a foreign source) their profit would equal their revenue, and as such, they would pay less tax (1% compared to 30%). 3. Domestic Companies using domestic goods and services would still pay the normal tax on profits. Cons: 1. Individuals purchasing goods or services from foreign companies would not be captured. But, this is the case today - "If you are from a country that does not have a tax treaty with Australia, income from an Australian source is generally taxable in Australia"
Repeal s82A ITAA36 - there is no apparent policy basis for it
There is no apparent policy basis for the $250 reduction in the claim for the self-education expenses. Section 82A ITAA36 creates a set of comparatively complex rules and definitions that impact on the deductibility of self-education expenses. The view is that these rules achieve nothing apart from added complexity. The aim it intends to achieve is not clear and nowadays the $250 is not going to go far in terms covering any meaningful expenses - it barely covers the cost of an average textbook. Moreover, the cost of capital items counts towards the $250 limit, even though the capital costs are not deductible. As a history note: s82A ITAA36 was introduced at the same time that $250 of expenses of self-education began to qualify as a concessional rebatable amount under s159U ITAA36. The rebate was repealed from 1985 but s82A was left for no apparent reason.
Personal Income Tax Return processing - time saver
Recommend Private Health Insurance rebate percentages be adjusted, if necessary, as at 30 June each year rather than current onerous 31 March, to reduce the unnecessary volume of extra information processed in almost every personal income tax return! Recommend the Department of Health (or those responsible for the related legislation) be reminded of our financial year end date , being 30 June, so they can align their decision-making effective date to help simplify the entries in millions of Australian personal income tax returns every year! Thank you.
Latest from the Board
- Board of Taxation Study: Differences in core definitions and concepts between state, territory and federal tax laws
- Message from the Chair, August 2017
- Tax Transparency Code Register signatories
- Read the Board’s Tax Transparency Code
- Read the Board’s final report on the implementation of hybrid mismatch rules
Meetings & events
- 7 Dec 2017 - Melbourne
- 19 Oct 2017 - Perth
- 14 Sep 2017 - Sydney