05 Aug 2009

Tax Administration

by Darren

I have just completed a course entitled Tax Risk Management as part of my master program. It was quite an interesting course because it gave me a very good insight into how the Tax administrations operate as well as understanding what their goals and objectives are. I focused on Australia and Japan during the semester however I will use this opportunity to extend my knowledge by looking at the other regimes like USA Singapore, Hong Kong and China. Next week I will commence with giving you and understanding of the Australian Taxation Office (ATO) structure and their goals for 2009. This is important because small and medium business compliance is one of their top priorities. In addition I will use this section to help explain the audit process just in case you are approached by the tax authorities.
04 Aug 2009

The Aussie tax resident

by Darren

In my homeland a resident for tax purposes is a very important issue. If you earn income in Australia it's better to get as much benefit as possible. Individual tax residents in Australia pay less tax than non-residents. For you to be considered a tax resident you must have and maintain a permanent address in Australia and have lived in Australia for greater than 183 days during the year. In addition other factors are taken into account such as frequency of travel to Australia, family or business/employment ties with Australia and whether you are a contributing member to a superannuation fund. If you come to Australia under a business skills program then there is a strong indication that you have the intention to reside in Australia and as such would be deemed a resident. So what is the impact of residency to you? I will discuss this in detail in the coming weeks and months but at the high level a non resident individual will be tax at a starting rate of 29% for every dollar earned. As income increases so does the rate. A resident on the other hand is taxed at lower rates and has an initial tax free amount for the first $6000 earned. A company is a resident if it was incorporated or management and control is exercised in Australia. If you as a director of a company, manage and control your business and hold your board meetings in Australia then the company will be deemed resident. Control and management does not mean the day to day operations of your business.
02 Aug 2009

Resident for tax purposes

by Darren

Many countries define the way in which they charge tax based on 2 key principles 1. Residency and 2. Source. A resident for tax purposes is chargeable to tax on income earned in that jurisdiction at a predetermined rate of tax. A non resident can be taxed in that jurisdiction if income was earned. A significant difference is the rate which applies to a resident and non-resident. With so many entrepreneurs like yourself crossing international borders an understanding of the rules of residency is key to your tax planning and general business decisions. So what is a resident? Over the next few weeks I will help explain the concepts of residency to you for the following countries: Australia Singapore USA Japan Hong Kong China
23 Apr 2009

Australia Delivery of Tax Bonus

by Darren

The Australian Taxation Office has advised the the delivery of the tax bonus is being made around Australia. Taxpayers will receive this at different times. Some payments have been forwarded directly to tax agents and you should contact your tax agent if you have not received personally. For more information on the bonus you can refer to the ATO website.
17 Mar 2009

Film Director Jailed for Tax Fraud

by Darren

Compliance with the tax law is critical for all. I will discuss this topic in more detail later but just to let the entrepreneurs out there know that it's not just the big corporations and executives who can be in trouble for not complying. On March 6 2009 a film director in Australia was jailed for 3 years 6 months for tax fraud. The film director tried to defraud the Commonwealth Government of Australia from AUD $9 million. The fraudulent activities took place over a 5 year period. The scheme involved tripling deductions for film production expenses.
26 Feb 2009

Singapore 2009 Individual Tax Benefits

by Darren

Tax Rebate The Singapore Government is granting a 20% tax rebate to a cap of $2,000 to all tax residents for the 2009 Year of Assessment (2008 calendar year). The 20% tax rebate is calculated based on the tax payable after double taxation relief and other credits but before set-off of the Parenthood Tax Rebate. This rebate will be available to a large population of Singaporean tax residents as to be capped at $2,000 an individual must have a taxable income in excess of SGD $120,000. The rebate will provide the taxpayer with extra spending power and hopefully used to stimulate spending across the country. Property Tax Rebate Owner-occupied residential properties will be granted a rebate of 40% on the property tax payable (after existing rebates) for calendar year 2009. Only owners from 22 January 2009 are eligible for the rebate. It will be deducted from owners property tax bills at the end of 2009. As an example the residential property is valued at $9,000 for property tax purposes Property tax is 4% of $9,000 = $360 GST Rebate = $50 Property Tax Rebate = $100 Property Tax payable = $210 40% rebate = $84 Net Property Tax Payable is = $126 The saving from this new rebate will reduce household expenses and similar the income tax rebate the extra income should be used to stimulate consumer spending and assist in combating the current economic crisis.
25 Feb 2009

California’s Marijuana Tax

by Darren

I just read this article in the Sydney Morning Herald about California planning to regulate and tax marijuana. One of the key issues faced by Tax offices globally is how they get taxpayers to be honest and comply with the tax law. I wonder if they will use scare tactics similar to how they monitor the taxation of foreign income. This will be interesting to see their proposal considering people can grow the stuff in their own backyard. I will post updates as I read and hear more. california-mulls-cannabis-tax
23 Feb 2009

Tax Bonus for Working Australians Bill 2009

by Darren

The House of Representatives have approved the Tax Bonus for Working Australians Bill 2009. The Bill is part of the stimulus package to support jobs and strengthen the Australian economy. The Government will give a tax bonus of up to $900 to Australian workers earning $100,000 or less. The bonus is subject to an income threshold test which determines that a:
  • $900 bonus will be paid to eligible taxpayers with a taxable income of up to and including $80,000;
  • $600 bonus will paid to eligible taxpayers with taxable incomes exceeding $80,000 and up to $90,000; and
  • $250 bonus will be paid to eligible taxpayers with incomes exceeding $90,000 up to and including $100,000.
The taxpayers do not need to apply for the bonus as the Australian tax office will utilize the 2007-2008 income tax returns of individuals to determine the eligibility of the bonus. Payments will be made from April 2009 and will be paid by cheque or electronic funds transfer.

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