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
cryptocurrency registry or autofill function
Many inexperienced investors have plunged headlong into crypto investments, in many instances with little or no record keeping nor in some cases any knowledge of the tax treatment of their investments. It would be of great assistance to taxpayers to be able to maintain a registry of their crypto investments online, with the ATO, which could potentially calculate current liabilities. Similarly, akin to the existing autofill functionality, if the ATO were able to build interfaces to extract transaction records from major crypto exchanges or crypto wallets, this would also help. Some commercial providers (e.g., https://cointracking.info ) already provide similar services, integrating through major crypto exchange API layers. Making compliance simple will both encourage it and increase total tax receipts for the ATO.
Allow TFNs to be transferred in a demerger
Under current arrangements shareholders of listed companies are asked to provide their TFN to the investee company. If shareholders do not provide their TFN, the company must withhold tax at the highest marginal rate on any non-fully franked dividends paid to these shareholders. In a demerger situation, the demerging company is not permitted to transfer the TFN of a shareholder that will also have or has a shareholding in the resulting spin-off company. As a consequence, the spin-off company must ask each shareholder to provide their TFN. The Board notes that a streamlining of the process of obtaining TFNs from shareholders of a spin-off company following a demerger could reduce compliance costs for demerger companies and their shareholders. Does the community think that in respect of demergers it is appropriate for the demerging company to transfer the TFNs of shareholders having an interest in the spin-off company? If not, why not?
Expand foreign income reporting labels: add deductions label
Currently, labels on the income tax returns for reporting foreign income contain only "net income" and "gross income" for various income types. This hides the amount of deductions claimed against foreign income, and in case of individuals - against each income type. It also appears to overly complicate the reporting because the deductions need to be apportioned from D labels for individuals and/or subtracted from income before entering numbers at item 20 on the individual income tax return. It may be more pragmatic and transparent to report gross foreign income, then report deductions in relation to this income in a set of separate labels and a net figure to be included in assessable income reported in its own label. This is the approach taken to virtually all other income types, consider dividend income at item 11 and dividend deductions at item D8. Which is as simple as Assessable Income - Deductions = Taxable Income. This will increase transparency and readability of the income tax returns and eliminate a set of "hidden" deductions due to the reporting of net income figures. Attached are images of relevant items on individual and SMSF income tax returns.
Latest from the Board
- Self-initiated Review of the Tax Treatment of Bare Trusts and Similar Arrangements
- 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
Meetings & events
- 15 Feb 2018 - Melbourne
- 22 Mar 2018 - Sydney
- 19 Apr 2018 - Brisbane