The Henry Tax Review - 2010

The Henry Tax Review is also referring to Australia's Future Tax System Review; it is a significant review of the Australian tax system.
The Australia's Future Tax System Review was established by the Rudd Government in 2008 to examine Australia's tax and transfer system, including state taxes, and make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century.

The Henry Tax Review panel consists of:

• Dr Ken Henry AC, Chair (Secretary to the Treasury)
• Dr Jeff Harmer (Secretary of FaHCSIA)
• Professor John Piggott (University of New South Wales)
• Mrs Heather Ridout (Australian Industry Group), and
• Mr Greg Smith (Adjunct Professor, Australian Catholic University)

One of the main objectives of the Tax Review is to simplifies the tax system, the panel Using wide community consultation and specific terms of reference, recommendations on all aspects of the Australian tax system have been made including: superannuation, company taxation (all businesses), environmental taxes; retirement income; and improving transfer and payment systems.
The Australian Government has released the contents of the Henry Tax Review on 2 May 2010. These are some of the major items announced by the Rudd's Government:

• compulsory superannuation will be rise from 9 to 12 per cent by 2019-20
• $500 annually payment to low-income workers into their superannuation
• Compulsory super payments to worker up to 75 years old.
• those worker over 50 will be able to top it up by $50,000 a year in concessional contributions.
• A reduction in company tax from 30 to 28 per cent by 2015
• Small business benefit earlier from company tax cut from 2012
• assets up to $5,000 immediately written off, providing an instant tax benefit.
• 40 per cent tax on above normal profits for Mining industry.

Chinese Proverbs for Business Management

• To open a shop is easy, to keep it open is an art.
• Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.


• Preserve the old, but know the new.


• A closed mind is like a closed book, just a block of wood.


• To know the road ahead, ask those coming back.


• It is not necessary to light a candle to the sun.


• Tell me, I'll forget, show me and I may remember; involve me and I'll understand.


• Talk doesn't cook rice.


• If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people.


• He who asks is a fool for 5 minutes, but he who does not ask remains a fool forever.


• Be not afraid of growing slowly, be afraid only of standing still.


• Men in the game are blind, men outside see clearly.


• Teachers open the door, but you must enter by yourself.


• Drinking the water of a well, one should never forget who dug it.

Late for making Tax payment?

On 1 June 2009 the Tax Office (ATO) introduced new measures to help small businesses that are struggling to manage their tax payment obligations in the current economic climate.
12 month general interest charge (GIC) free payment arrangements
Businesses with an annual turnover of less than $2 million and an activity statement debt can apply for a GIC-free payment arrangement from now until 30 June 2010. GIC will be remitted for a maximum period of 12 months, provided the payment arrangement is maintained. There is no limit on the amount of debt under arrangement.

To be eligible a business must:

• have an annual turnover of less than $2 million


• have an activity statement debt, and


• negotiate a mutually acceptable and sustainable payment arrangement with the Tax Office that is entered into between 1 June 2009 and 30 June 2010.

The GIC-free period applies to:

• activity statement debts (eg GST, PAYG).


• Superannuation guarantee charge (SGC) debts are not included as the GIC forms part of the employees’ entitlements.


• No GIC is payable for a maximum of 12 months from the day on which the arrangement is entered into.


• The actual GIC-free period (maximum of 12 months):
  
  • starts on the day on which the agreement was made, and
  
  
  • finishes on the day the final instalment is due.
  
  
• If the arrangement defaults, the GIC-free period ends on the date of default.


• If a payment arrangement entered into prior to 1 June 2009 is renegotiated after 1 June 2009, the new arrangement will be treated as a GIC-free payment arrangement subject to the eligibility criteria being satisfied.
  *For businesses which belong to a group of entities, the circumstances across all members of the group may be considered when determining eligibility for these offers.

How do I apply?

• Phone us on 13 11 42 from 8.00am – 6.00pm Monday to Friday.


• If your debt is less than $25,000 you can use our automated self help service to apply for a payment arrangement by calling 13 72 26. Our self help service operates 24 hours a day, seven days a week.


• contact your tax agent


• You can also go to ATO's website to submit a question via the Debt payment email enquiry.

Searching for your lost super

SuperSeeker is a tool that provide by Governement and it will assist you to look for the super you might lost and provide you with a list of possible matches. It is free to use. The online and phone services are available 24 hours a day, 7 days a week.

Search Online
UsingSuperSeeker Online is quick and easy. Your search can be completed in a couple of minutes.

1. Important privacy information will be displayed. Read this information and agree to the privacy disclaimer before commencing your search.
2. You need to provide your:
• tax file number (TFN)
• family and given names
• date of birth.

If there is a possible match:

1. The site will tell you the name of the super fund, their phone number and your account number.
2. Where an account is held, you will be transferred to a client service representative who will provide details of your account.
3. Where an account is found on the LMR, you may wish to consider:
• contacting the fund to update your personal details or enquire about your lost account
• consolidating your super accounts, which may reduce your fees and costs
• withdrawing your benefit, if your account balance is less than $200 and certain criteria are met.

By paper

1. Download and complete Searching for lost super (NAT 2476, PDF, 137KB).
2. When you fill in the form you will need to provide your:
• name
• date of birth
• contact details.

Any additional information you can provide, including your TFN, previous employers and previous super funds, will help us to identify any lost super which may belong to you.
If there is a possible match:

1. You with be inform the result by mail with:
• the name of the super fund, their contact number and your account details
• information about any lost super we are holding.
2. Where an account is found on the LMR, you may wish to consider:
• contacting the fund to update your personal details or enquire about your lost account
• consolidating your super accounts, which may reduce your fees and costs
• withdrawing your benefit, if your account balance is less than $200 and certain criteria are met.
3. Where an account is held by ATO, you will be asked to contact them directly.

By phone

1. Phone the SuperSeeker self-help line on 13 28 65.
   We will give you important privacy information. Make sure you have paper and a pen ready to write down the details of any lost accounts. 
2. We will ask you to select from a range of topics. For SuperSeeker, select option 1 and then option 2. 
3. We will ask for your:
• TFN
• date of birth.

If there is a possible match:

1. We will tell you the name of the super fund, their phone number and your account number.
2. Where an account is held by us, you will be transferred to a client service representative who will provide details of your account.
3. Where an account is found on the LMR, you may wish to consider:
• contacting the fund to update your personal details or enquire about your lost account
• consolidating your super accounts, which may reduce your fees and costs
• withdrawing your benefit, if your account balance is less than $200 and certain criteria are met.

Superannuation And You

Late Super Contribution

Super guarantee legislation requires that employer to pay super contributions to their employee’s nominated super fund each quarter by the cut-off date. If you make a payment after the cut-off date, you must lodge a Superannuation guarantee charge statement - quarterly (NAT 9599) and pay a super guarantee charge to the Tax Office. Penalties apply if you fail to comply.
If you have made a late contribution to a super fund for an employee, you may be able to offset that payment against the amount of super guarantee charge you have to pay for that employee for that period.

You are able to offset super guarantee contributions paid late to a super fund against the super guarantee charge, providing:

• you have made a late payment to your employee’s super fund,


• you made the payment prior to the date your original super guarantee charge assessment was made, and


• you lodge the late payment offset election with the Commissioner within four years of your original assessment date.

The super guarantee charge is made up of three parts:
super guarantee shortfall amounts (including any choice liability)

• nominal interest on that amount (10% per annum), and


• an administration fee ($20 per employee per quarter).

You can only use late contributions to offset the nominal interest and super guarantee shortfall components of the super guarantee charge. You will not be able to offset the administration fee, or other interest or penalties.
If you elect to offset your super guarantee charge with your late payment to the super fund, then:
the late payment is not tax deductible for income tax purposes you cannot revoke the election to use the offset, and any late contribution you use to reduce the amount of your super guarantee charge cannot be used as a pre-payment for current or future periods.
Alternatively, you may be able to use a late contribution for an employee for a future quarter if the contribution is made not more than 12 months before the beginning of the quarter. If you choose this option, the contribution will be tax deductible, but you cannot also claim an offset against the super guarantee charge.

Year 2010 Taxation Brief

Companies
An Australian resident company tax rate remain at 30 per cent of its taxable income.

Capital Gains Tax
Captial Gain Tax at 30% is applying to the disposal of assets acquired (or deemed to have been acquired) after 19 September 1985. A net capital gain arises if the capital gain made by a taxpayer in a year of income exceeds the capital loss made by the taxpayer in that year or carried forward from previous years.

Repatriation of profits
Repatriation of profi ts can generally be undertaken at any time as there are no foreign exchange controls on such repatriation. Dividends paid to foreign shareholders are subject to withholding tax (there are some exceptions).

Retirement income contributions
The Superannuation Guarantee legislation generally requires employers to contribute 9% of an employee’s salary or wages into an Australian superannuation fund.
There are some exceptions from the Superannuation Guarantee, including where a Social Security Agreement that Australia has with another country exempts an employee who has been sent to work temporarily in Australia.

Residetns Individual tax rates


Non-Residetns Individual tax rates