Tax Articles

Bonus Payment & Tax   This article focuses on the tax treatment of bonuses paid to employees. As commissions are essentially treated the same as bonuses for tax purposes, this article also applies to the tax treatment of commissions. Even though this article...

Allowance vs Reimbursement   It’s important to distinguish between payments which are allowances versus reimbursements. The character of an amount as an allowance or a reimbursement has implications in an array of different tax areas, including: the deductibility...

Hybrid Mismatch Rules   The hybrid mismatch rules are broadly designed to prevent taxpayers from exploiting differences in the operation of the tax laws of 2 or more countries by way of a hybrid mismatch. The hybrid mismatch rules are contained in Division 832 of...

Part IVA What is Part IVA? Part IVA of the Income Tax Assessment Act of 1936 contains the income tax general anti-avoidance rule (GAAR). The GAAR operates alongside a number of other specific anti-avoidance rules contained in Australian tax law. The GAAR is...

Debt and Equity Rules   There are broadly two major categories of funding available to a business: debt funding and equity funding.   From a basic legal point of view and in the context of capital raising, debt funding refers an arrangement which involves a...

Everett Assignment   What is an assignment?An assignment involves an entity or individual (the assignor) transferring contractual rights and benefits to another entity or individual (the assignee). For example, assume John enters into a contract with David. Under...

Taxable Australian Property   A foreign resident of Australia for tax purposes is generally only subject to Australian tax on Australian sourced income. However, when it comes to capital gains tax, a foreign (tax) resident will not recognise a capital gain or...

TOFA TOFA (Taxation of Financial Arrangements) is a tax framework that focuses on taxing the gains and losses from financial transactions based on their actual economic impact, rather than just their legal structure. In simpler terms, it ensures that the taxation of...

NANE Income   Non assessable non exempt income (NANE) refers to specific types of income that are defined by tax laws or other Commonwealth legislation in Australia as being neither subject to tax (non assessable) nor exempt from tax. This classification has...

Contractor vs Employee   An employee is an individual who works under the supervision of an employer as a representative of their business receiving in return wages or other remuneration. While an employee might have some freedom such as flexible hours, the...

Intellectual Property   Intellectual property (IP) encompasses a range of intangible assets and rights held by a taxpayer. This includes rights held by a taxpayer as the owner or licensor of patents, registered designs, copyrights and so forth. The definition of...

Allocation of Professional Firm Profits   The distribution of profits made by professional firms to the controllers of a business and their associates may present tax complications. Professional firms here refers to professional practices such as accounting...

Testamentary Trust     A testamentary trust is a trust that is established through a person’s last will and testament. Unlike discretionary or family trusts, which are typically created separately during an individual’s lifetime through a trust deed,...