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Role of the Board of Taxation - Presentation by Chris Jordan


Title: Role of the Board of Taxation - Presentation by Chris Jordan Last modified by: Kim Hansen Created Date: 2/11/2003 9:26:35 PM Document presentation format – PowerPoint PPT presentation

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Title: Role of the Board of Taxation - Presentation by Chris Jordan

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  • Role of the Board of Taxation
  • Review the Boards work
  • Highlight issues on the Boards plate
  • Focus of the Boards activities in 2003

Board of Taxations Role (1)
  • The Boards mission is stated in its Charter
  • Recognising the Governments responsibility for
    determining taxation policy, and the statutory
    role of the Commissioner of Taxation, to
    contribute a business and broader community
    perspective to improving the design of taxation
    laws and their operation.

Board of Taxations Role (2)
  • Purely an advisory body to the Treasurer and the
  • No mandate to determine taxation policy matters
    unless authorised by the Treasurer
  • No power of direction over the Commissioner of

Board of Taxation - Composition
  • In operation for two and a half years
  • Seven non-government members
  • Three ex-officio members
  • Serviced by a small Secretariat within the

Boards Work (1)
  • Major recommendations by the BoT
  • that development of the TVM not proceed
  • that best practice arrangements for community
    consultations be established
  • that the responsibility for tax legislation be
    transferred from the ATO to the Treasury

Boards Work (2)
  • that new office of Inspector-General of Taxation
    is a welcome addition to existing tax
  • that there is no compelling case to change the
    existing tax treatment of trusts
  • Review of International Tax Arrangements

Taxation of Trusts (1)
  • The Government took the Boards advice that the
    entities taxation regime that was to commence in
    July 2001 - not proceed
  • When the Government withdrew that Bill, it
    indicated a new round of consultations would be
    undertaken on principles that can protect
    legitimate small business and farming
    arrangements whilst addressing any tax abuse in
    the trust area

Taxation of Trusts (2)
  • The Government announced that the Board would be
    part of the new round of consultations
  • The Board examined the essential issues with the
    assistance of the Treasury, ATO and external

Taxation of Trusts (3)
  • The Boards report was released by the Government
    on 12 December 2002
  • The Treasurer announced on 12 December 2002 that
    a new measure would be introduced to replace
    section 109UB that deals with distributions from

Taxation of Trusts - Boards Recommendations (1)
  • The efficiency and equity of the tax system would
    not necessarily be improved by aligning the tax
    treatment of trusts and companies
  • Retain the current flow-through treatment of
    distributions of non-assessable amounts

Taxation of Trusts - Boards Recommendations (2)
  • Improve effectiveness and fairness
  • improve the effectiveness of the deemed dividend
    rules so as to more effectively prevent
    beneficiaries accessing trust income that has
    borne tax only at the company tax rate and
  • remove the unfairness in the operation of section
    109UB that is currently inducing some small and
    medium-sized business operators to establish
    arrangements that enable them to avoid the
    operation of the section completely

Taxation of Trusts - Boards Recommendations (3)
  • Commissioner of Taxation to clarify and publish
    his views about the deductibility of interest on
    borrowings used to finance non-assessable
    distributions to beneficiaries of discretionary
  • If the rulings are unable to deal with the
    matter, a legislative solution should be

International Tax (1)
  • Working Group Tony DAloisio, Chris Jordan and
    Brett Heading
  • 58 submissions from organisations and individuals
  • The Boards report was submitted to Government on
    28 February

International Tax (2)
  • CFC and FIF rules complex - imposes significant
    costs on business
  • The costs of maintaining these rules can no
    longer be justified
  • The tax system needs to continually adapt to
    increasingly integrated global business

International Tax (3)
  • Boards report in two parts
  • Recommendations Report
  • Consultation Report
  • Confidential volume not to be published but will
    be made available to the Treasurer
  • Up to the Government to decide when to make the
    report public - as is the usual case with all
    Board reports

Looking Ahead - 2003
  • Public consultation on an exposure draft
    legislation on the definition of a charity
  • Review the effectiveness of community
    consultation arrangements and the quality and
    effectiveness of legislation in delivering its
    policy intent
  • Board will be developing its work program in this

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