In the last year we have seen several reports issued in respect to taxation, super and regulatory changes to reporting standards and ASIC requirements. There has also been some major case laws in respect to Trusts (such as the ‘Bramford Case’) and we have seen the Commissioner of Taxation, target high wealth based structures (‘Hybrid Trusts’).
As history shows, it is inevitable that at some point further reform of tax system will take place by the government elected and there have been some changes proposed and introduced which will reshape the role of compliance for small / medium businesses. For instance in Super Guarantee increases, parental leave schemes and child care rebates and changes to reporting standards and governing requirements under the Corporations Law.
With the upcoming election in this month it is important to understand policy changes that can affect small and medium size businesses. In a media release from the Tax Institute of Australia on 27 July it stated that, “ongoing uncertainty over the tax treatment of trusts has emerged as the top election issue”. The main concerns by governing bodies and tax professionals include:
- Taxing of trusts as a top tax issue for the election
- Implementing a long-term policy for the taxing of superannuation (47%)
- Tax incentives for small business (46%)
- Reducing the number of state and local government taxes (44%).
Tax Institute Senior Tax Counsel Robert Jeremenko said the feedback about trusts reflected members' concerns and was unsurprising given the outcome of recent tax cases and ATO views in relation to trusts. He said the tax treatment of trusts has the potential to affect all taxpayers including individuals, small businesses, super funds, managed funds and large businesses.
Read additional information on potential tax reforms affecting SMEs proposed by both leading parties
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