Category Taxation in Australia

Australia Drops Backpacker Tax

September 27, 2016 Taxation in Australia

Tax on backpackersCANBERRA – Backpackers in Australia will be breathing a sigh of relief, as the government back down from its plan to levy a raised tax rate for foreign workers.

On September 27th the government of Australia backed down on its intentions to apply an income tax rate of 32.5 percent on the incomes earned by working holiday makers.

Australian citizens enjoy a zero rate of tax on personal incomes up to AUD 18 200, followed by a rate of 19 percent on incomes between AUD 18 201 and 37 000, with a rate of 32.5 on all further income.

The government had previously stated that it would drop the thresholds for any non-residents with working visas in Australia, instead levying incomes at the full rate of 32.5 percent.

The intention quickly proved to be controversial, with many groups and experts clai...

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ATO Raids “Phoenix” Schemes

August 12, 2016 Taxation in Australia

Tax Debts in USACANBERRA – More than a hundred tax investigators raided business across Australia to uncover evidence of fake bankruptcies being used to dodge taxes.

Over the course of August 11th the Australian Tax Office (ATO) conducted 13 raids to catch out bankrupt businesses employing so-called “phoenix schemes” to dodge debts and tax obligations.

The raids involved 130 separate advisers and investigators from the ATO.

The ATO’s investigations revolved around several pre-insolvency advisers who reputedly aided businesses to skip out on their tax obligations by entering into voluntary bankruptcy.

The schemes were called phoenix schemes as the bankrupt businesses would be recreated in a new form, following their voluntary bankruptcy.

It is believed that the bankrupt businesses collectively skipp...

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Sugar Taxes Won’t Work in Ireland

August 8, 2016 Taxation in Australia

DUBLIN – A sugar tax in Ireland would result in a loss in tax revenues, without any corresponding improvement in taxpayers’ health.

Over the weekend the Irish Beverage Council, released a new report, showing that the introduction of a tax on the sale of sugar-sweetened beverages in the country would result in increased household expenses, decreased sales, and a loss in tax revenues.

The research completed by the Irish Beverage Council, and detailed in the report, suggested that the introduction of a EUR 0.10 sugar tax on a can of soft drink would hike the expenditure of an average household in Ireland by EUR 60 per year.

However, the increases in cost will also result in an overall drop in the number of drinks sold, resulting in a drop in sales of as much as EUR 60 million per year.

Fo...

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Legal Weed Would Bring Millions For Australia

August 2, 2016 Taxation in Australia

MarijuanaCANBERRA – Legalising marijuana would bring in millions in extra tax revenues for Australia, but it would also see a doubling of the smoking rate among adults.

According to the results of new research published in the August issue of the journal American Economic Review, Australia could see tax revenues jump by as much as AUD 1 billion if marijuana were to be legalised.

The revenues to be gathered from the sale of legal marijuana in Australia will vary based on the taxation scheme to be enacted, and it is estimated that at a minimum level the new tax revenues will amount to AUD 77 million, or to a maximum of AUD 915 million.

The tax revenue estimates are based on the assumption that all current smokers will switch to legal alternatives, however, if current smokers continue to purchase fro...

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ATO Cracks Down on Tax-Dodging Retirement Funds

July 28, 2016 Taxation in Australia

CANBERRA – Taxpayers and tax advisers in Australia are being told to stop using self-managed retirement funds to evade taxes.

The Australian tax Office is cracking down on tax evasion committed via self-managed superannuation funds.

Under current regulations in Australia, taxpayers saving for retirement are able to manage their own retirement savings account via self-managed superannuation funds.

The ATO claims that a growing number of tax advisers are now helping individuals bypass their tax obligations by abusing the SMSF schemes.

Specifically, the ATO says that tax are being dodged by dividend stripping, Non-arm’s length limited recourse borrowing arrangements, and by shifting personal service incomes to an SMSF.

Taxpayers who are found to be using an illegitimate SMSF scheme to evade...

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