The ATO has
released a document “Your Service Entity
Arrangements”, which discusses:
§ The use of service arrangements;
§ The extent of tax office compliance
activities;
§ Whether your service trust arrangement should be reviewed and the steps
to take;
§ Examples of indicative service fees;
§ Practical case studies;
Taxpayers
have until April 2007 to comply, unless their services fees are over $1m,
represent 50% of gross fees and the service trust profit is over 50% of the
profit of the combined entities.
This
document complements the new Ruling TR 2006/2 relating to the deductibility of these service
fees. An online copy of the guide can be
found at:
http://www.ato.gov.au/content/downloads/N13086-04-2006.pdf |
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From 01/07/05, the Entrepreneurs’ Tax Offset (ETO)
is a new measure that allows a tax offset of up to 25% of the income tax
attributable to the business income of a business in the simplified tax
system (STS).
The ETO is available to:
§ an individual/company that is an
STS taxpayer;
§ a partner in an STS partnership;
§ a trustee of beneficiary of an
STS trust.
Where:
§ the STS group turnover for the
year is less than $75,000; and
§ there is net STS income for the year.
STS group turnover for a given year is:
§ the value of the business
supplies made by the tax payer during the year; plus
§ the value of the business
supplies made during that year by any other grouped entities under the STS grouping rules.
§ It excludes business supplies
made between the taxpayer and any grouped entities.
If the taxpayer’s STS group turnover is $50,000 or
less, a 25% tax offset can be claimed against the income tax liability
attributable to the STS business income. The tax offset is phased out until
it equals zero at a turnover of $75,000. |
Legislation has been introduced to improve the
provision of Tax Office advice and reduce the amendment period for income tax
assessments for 2004-05 and later years.
Taxpayers with nil liability or loss returns will
now have the same review period as taxpayers with tax liabilities –
previously it was unlimited.
From 1st January 2006, taxpayers with
nil liability and loss returns for 2004-05 and later income years will now be
issued a Notice of Assessment rather than a non-taxable advice.
Transitional arrangements have also been put into
place so that nil liability and loss returns for 2003-04 and earlier income
years are not open to review indefinitely.
The period of review to which an amendment to an
income tax assessment for most individual taxpayers and very small businesses
participating in the simplified tax system is two years for 2004-05 and
later. This compares with the 4 year limit for other taxpayers. |
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The Tax Office will request and collect details of
approximately 600,000 individuals or entities who have purchased or acquired
a motor vehicle valued at $70,000 or higher from the various roads and
traffic authorities.
The information will be electronically matched with
certain sections of Tax Office data holdings to check taxpayers’ compliance
with the $57,009 luxury car limit used for depreciation purposes.
The Tax Office advises that the project complies with
the Federal Privacy Commissioner’s Guidelines on Data Matching in
Commonwealth Administration.
NOTE:
The above articles presented here are provided for information purposes only
and are not to be treated as taxation or financial advice. |
