CA (Chartered Accountant)/Tax Agent/会计 - 在线解答各类Tax/Accounting问题

shuangchao

If anyone here have a tax/accounting related question, please feel free to post here. i will try to get back to you asap. Your question will be answered by a qualified accountant.

please note depending on the area you are enquiring about, it is often not possible to provide a specific answer without conducting a formal interview. in doubt, please consult with an accountant you trust before making an important decision. Other accountants in this forum please do not hesitate to provide your opinion.

[ 本帖最后由 shuangchao 于 2010-6-9 09:49 编辑 ]

blessing8

thanks

janine

question: my friend, income about $100k, do you have any good advice for him to get more tax rebate or any investment advice to reduce income tax?

shuangchao

原帖由 janine 于 2009-2-19 01:27 发表
question: my friend, income about $100k, do you have any good advice for him to get more tax rebate or any investment advice to reduce income tax?

Janine,

Your question is not very specific, the best i could do is to provide some generic answers that may or may not assist your friend.

First of all, i have to assume that we are talking about an individual here, possibly receiving employment income.

there are a number of things an individual can consider doing to reduce his tax liabilities.

Neogotiate a salary package arrangement with his employer
Bring some work related expenditure into the current financial year, this will largely depend on his earning in the following year, the benefit is often minimal.
Make extra superannuation contribution, how much he can put in will depend his age.
Consider purchase income protection insurance if work hasn't already bought it for him.
Investing in property, negatively geared property has always been a popular tool to lower income tax payable. but he needs to be aware of the capital gain consequences.

LONELYMELBOURNE

Hi buddy

I have a question as follows, would you mind giving me some tips?

If A company issues convertible notes to get fund by incurring legal costs and investment banking fees, what is the GST implications of issuing the convertible notes and the cost incurred? (assuming that A has registered for GST).

Thanks.

shuangchao

原帖由 LONELYMELBOURNE 于 2009-2-23 01:38 发表
Hi buddy

I have a question as follows, would you mind giving me some tips?

If A company issues convertible notes to get fund by incurring legal costs and investment banking fees, what is the GST ...

The issues of convertible notes would be characterised as a financial supply, therefore, it is generally input taxed. This has significant implications in relation to the company’s entitlement to input tax credits.

Generally speaking, the company is not entitled to input tax credits if the acquisition relate to a input taxed supply. Therefore the GST on the legal costs and other fees relating to issuing of the convertible shares, can not be claimed by the company in my opinion.

All the above are the conclusion i made by applying the basic GST rules.

Be mindful, there are more complex GST rules in relation to financial supplies. e.g FAT threshold.

LONELYMELBOURNE

原帖由 shuangchao 于 23-2-2009 12:20 发表


The issues of convertible notes would be characterised as a financial supply, therefore, it is generally input taxed. This has significant implications in relation to the company’s entitlement to ...

Thanks very much. Can I ask if the notes are purchased by both resident and non-resident, then whether the GST on the notes purchased by non-resident is GST free? Will the De minimis rule be breached?

Do you know any tax ruling which is relevant to this? Thanks.

[ 本帖最后由 LONELYMELBOURNE 于 2009-2-23 14:26 编辑 ]

shuangchao

When the company issue convertible notes to non-residents, they should be classified as GST-free supplies as per subdivision 38E of GST act.
Once again, i think the FAT (financial acquisitions threshold) may apply in this case. the FAT i believe is $50000, that is, the amount of input tax credits in relation to financial supplies or 10% of entitlement to all acqusition in a 12 months period.
if your company's acquisition is below the threshold, you may be entitled to all claims, alternatively, only the part relating to GST-free supplies.
The above comment is merely a guide, and hopefully it points you to the right direction.

LONELYMELBOURNE

Thanks, buddy. You are legend....

courier

才看到这个帖子，牛人，顶一下

LONELYMELBOURNE

原帖由 shuangchao 于 23-2-2009 17:09 发表
When the company issue convertible notes to non-residents, they should be classified as GST-free supplies as per subdivision 38E of GST act.
Once again, i think the FAT (financial acquisitions thresh ...

BTW, i think the de minimus rule i.e.FAT is only applied to financial supplies. Thanks.

LONELYMELBOURNE

Hi David

Can I ask another question?

- Company A acquired 100% shares in company B
- Company A is renowned for acquiring businesses, streamlining the financials of the business and exiting the business within 3 to 5 years.
- What are the key income tax consequences for company A of existing company B's investment. (Assume the relevant owner is a resident and small business concessions are excluded)

Thanks in advance.

shuangchao

How does company A exit the business normally? by that i mean, does it sell its shares to others? sell the business? or simply cease trading? more details needed

MyMelody

我有一些interest income, 那bank charges 可以claim as a deduction 吗?
谢谢

courier

Hi shuangchao,

Can I ask you a question?

Re: Transferring assets within the group,

Which one is dealt with this situation, Div 122 Rollover for disposal of assets to
wholly-owned company  or Div 126 Same-asset rollovers?

Thanks ahead

[ 本帖最后由 courier 于 2009-2-23 22:23 编辑 ]

shuangchao

My melody, are you talking about the type of bank account that you use everyday? if so, then no.

shuangchao

LONELY MELBOURNE & courier, are you guys asking me questions from your CA / CPA studies? i am mentoring a few graduates going through their CA programs at the moment, and your questions sound awfully lot like CA program questions.

astina

原帖由 shuangchao 于 2009-2-23 22:50 发表
LONELY MELBOURNE & courier, are you guys asking me questions from your CA / CPA studies? i am mentoring a few graduates going through their CA programs at the moment, and your questions sound awfully  ...

哈哈，这事像courier做的

courier

不是CA的，不过我看到他的问题好像和我的一样，嘿嘿。

是applied tax的

courier

(paopaobing(60)) 明天交作业，在写论文呢。
rule差不多都查出来了，论文要求70%的通过率，不太敢下手判断

[ 本帖最后由 courier 于 2009-2-23 22:56 编辑 ]

JeffShen

原帖由 shuangchao 于 2009-2-23 22:31 发表
My melody, are you talking about the type of bank account that you use everyday? if so, then no.

why not? as the bank charge such as monthly accounting fee (eg commonwealth bank charge $4 per month for streamline and net saving bank a/c),is relevant and nexus to the interest income you earned. Therefore it is allowed for deduction.

shuangchao

原帖由 courier 于 2009-2-23 22:18 发表
Hi shuangchao,

Can I ask you a question?

Re: Transferring assets within the group,

Which one is dealt with this situation, Div 122 Rollover for disposal of assets to
wholly-owned company  or ...

If i understand your question correctly, I believe the answer you looking for is Div 122 Rollover for disposal of assets to wholly-owned company asset.

Division 122, allow a roll-over when an entity transfers an asset, or the net assets of a business, to a company that it wholly owns. Division 122 also allows a roll-over where an entity creates certain assets in a wholly-owned company.

Good luck with you assignment

courier

太谢谢啦。 开动啦。明天来加分

shuangchao

原帖由 JeffShen 于 2009-2-23 23:16 发表


why not? as the bank charge such as monthly accounting fee (eg commonwealth bank charge $4 per month for streamline and net saving bank a/c),is relevant and nexus to the interest income you earned ...

the everyday account we use is 99% private, we use them to buy goods at shop, pay for petrol etc etc the bank charge in relation to this type of account, should not be claimed as a deduction. The interest on it is minimal anyway.
it will be a different story if its a business account or some sort of investment/saving deposit/cash management account. in this case, you can use your nexus arguement.

LONELYMELBOURNE

原帖由 shuangchao 于 23-2-2009 22:50 发表
LONELY MELBOURNE & courier, are you guys asking me questions from your CA / CPA studies? i am mentoring a few graduates going through their CA programs at the moment, and your questions sound awfully  ...

Hi David

Sorry for the late reply. You are really smart. I am doing the final project for the EBA module, to be honest, i really want to get it through and no more exams in my life. Hope you do not mind.

As for the question I asked, the background info did not mention how company A will exit. As the question asking for the key income tax consequences rather than GST consequences, so I assume that there is no difference between sale of shares and sale of going concern. As it should be treated as a trading stock which is acquired and sold in the normal course of business. If it is the case, the key income tax consequences i can think are

assessable income under s.6-5
deductilbe expense under s.8-1
tax rate 30%

But, to be honest, i think it should not be as simple as that. That's why i posted the question. Hope you will not mind.

Cheers,

Steven

courier

昏倒，楼上的你EBA，怎么很多问题和我好相似哦。不会是一样的题目吧

courier

第一步，需要知道notes是debt还是equity，这个的入了也有几条，哟啊根据notes的内容判断。

GST是financial supplies，如何claim，要看是否breach 说的两个rule。而且要看company的结构。如果是financial 的公司，要reduced input tax，就是 75%

如果是debt，s 25-25，这些费用都可以deductible的。
如果是equity， s 40-880， blackhole，5年spread。

原帖由 LONELYMELBOURNE 于 2009-2-23 01:38 发表
Hi buddy

I have a question as follows, would you mind giving me some tips?

If A company issues convertible notes to get fund by incurring legal costs and investment banking fees, what is the GST ...

courier

我也有一个和你类似的company的题目。我的考虑的出发点是

并入公司
1，能否form tax consolidation group
2，transfer asset是否会引起CGT events
3，Loss能否carry forward，以及 same business test
4，计算market value

qichxi

我也有个问题,老婆和我收入超过180K,除了养老金,买投资房,工作相关费用的抵睡,这类大众的方法,还有什么好方法?

shuangchao

LONELYMELBOURNE, in relation to your question re company buying into another company.
the main issue here is revenue vs capital & the ability to recoup loss. therefore i think you are on the right track.
to be honest, three to five years is a long time, i would not treat the acquisition as trading stock.
the other issue you need to consider is: when did the exit actually taken place, 3-5 years probably means the business is completely exited. but in practice, when companies do this sort of things, some of them starts to slowly sale the assets one by one right after they purchase the shares. therefore, it is possible that the real exit time is deemed to be from Day 1. if that's the case, everything after Day 1, will be on capital account. on a consolidated level, these capital loss may not able to be recouped if there is not capital gains.