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Buying or selling a piece of Australia?

From today anyone buying or selling direct (and some indirect) interests in Australian real estate has new tax obligations.

The Australian Government has imposed a 10% withholding tax on all purchases of real estate in Australia over AUD2m unless the vendor provides the purchaser with a clearance certificate from the Australian Tax Office which confirms they are Australian resident.

The new measure is aimed at improving the recovery of tax from non-residents who own Australian real estate assets. From 1 July all buyers of Australian real estate assets, whether they are residents or non-residents, should make sure their contracts are up to date and have clauses covering the new documentation requirements.

Significant penalties are imposed on purchasers who do not deduct the required withholding tax.

All property lawyers and agents should be up to speed with the new rules.

cheers

 

Iain

 

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Budget 2016

What will the Budget 2016 mean for small and medium sized businesses?

A significant investment in transforming how IRD works will be better for everyone in the long run. An efficient and easier tax collection system is desirable but SME’s won’t be waking up this morning to a dramatic new world. It’ll be business as usual for a while yet.

The tax simplification measures announced in April focussed on SME’s and will be welcomed by most. Penalty reductions, easier provisional tax payment methods, lower interest costs and greater flexibility around withholding taxes will reduce the costs of collecting and paying tax.

I think the announcements most likely to appeal to small and medium sized businesses are those aimed at fostering entrepreneurship and innovation; 25 initiatives over the next four years in science, skills, tertiary education and regional development.

The Government’s Regional Growth Programme gets a boost, there’s more money for the Marsden Fund and the Health Research Council and another 5,500 apprenticeships by 2020.

Encouraging innovation and entrepreneurship benefits us all with more jobs and improved productivity and sustainability. Equipping workers with the skills needed for those jobs ensures the productivity and sustainability gains can be achieved.

Here’s a full analysis on this year’s Budget announcement http://bit.ly/1RpcNTt

 Iain

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Fat Taxes

Sugar taxes are back in the news with the UK Budget announcement to introduce one: http://www.theguardian.com/uk-news/2016/mar/16/budget-2016-george-osborne-sugar-tax-growth-forecast-falls

There is evidence they work but they need to be significant to have any real impact.

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Keeping the customer first?

ey.com/customergrowth    Linda Hasenfratz, Linamar Corporation CEO tells how. Leading companies who focus on fixing customers issues create a compelling competitive model.

#acceleratinggrowth

@EY_Growth

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“Get out of their way….”

“Good executives confuse themselves when they convince themselves that they DO things…Set a vision, listen to the team,  and then get out of the way.” Marissa Mayer, CEO, Yahoo.

While there are many hidden assumptions underpinning this simple statement, it still serves as a strong reminder for those of us tempted to micro-manage.
Iain

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Australia leads NZ 2 – 0

The Australian Government looks likely to change its GST treatment of digital currencies. In NZ we’re left wondering what our Government’s position is.

This is the second time in about as many weeks Australia has taken steps to address a well acknowledged GST issue. Just a few days ago we learnt it is now almost inevitable the low value import threshold in Australia will be reduced, perhaps even eliminated; see my 22 July post.

And on 4 August the Senate Standing Committee on Economics released its report on digital currencies. You can find the full report here: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Digital_currency/Report

The Committee was asked to consider the tax treatment of digital currencies and the Australian Tax Office’s (ATO) published position.

The report highlights the practical and commercial issues with the current tax treatment. GST is singled out as the most significant. The ATO, rightly in my view, concluded digital currencies are commodities and GST applies to them in the same way it applies to traditional barter arrangements.

As the Committee points out, this leads to double taxation and can be a permanent cost for private consumers when they’re exchanging real currency for digital currency.

The Committee recommends digital currency (like Bitcoin) be treated the same as money for GST purposes and the Government consult with States to consider changing the GST law. This would remove GST from digital currency and resembles the “exempt” treatment adopted in the UK.

I have no doubt the NZ Government (through Inland Revenue) is following this development just as it is the low value import threshold issue. And, there is sense in staying close to Australia and not blazing our own path on these issues. Nevertheless, it would be good to know where IRD stands on digital currencies and GST.

Iain

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Australia considers $20 import threshold

It looks like Australia will reduce its $1,000 low value import threshold to $20. http://www.smh.com.au/federal-politics/political-news/gst-on-lowvalue-imported-parcels-moving-closer-20150721-gihfgy.html

This issue has been around for ages. The main objection to a reduction has been the administration costs of processing the additional parcels.

Politicians now think new technologies help with the administration. Besides, they say it’s a matter of principle, levelling the playing field for local retailers.

Will New Zealand follow suit?

Well, Australia hasn’t gone there yet, but if they do then in my view it’s only a matter of time before NZ does the same.

Iain