Tax Articles

Tax on Compensation   Compensation payouts There are many forms of compensation payouts which may be awarded to taxpayers. This can include compensation in relation to personal injury or illness, damage to reputation, damage to property, lost employment, lost...

Tax Consolidation   If your business is a company that owns 100% of another company, trust or partnership, tax consolidation is an option you should consider. A consolidated group generally consists of a head company and subsidiary members. Throughout...

Transfer Pricing   What is Transfer Pricing?Transfer pricing includes the pricing of goods, services, or intangible assets exchanged between different entities. It involves determining the prices for these transactions, taking into account the possibility that...

Permanent Establishment   A permanent establishment is a fixed place of business where an enterprise (a company) conducts its business activities. This place can be a building, office, factory, workshop, mine, oil/gas well, quarry, agricultural land, or similar...

Thin Capitalisation   What is thin capitalisation? Thin capitalisation is a financial practice involving the funding of subsidiaries with a higher proportion of debt relative to equity than is typical in an arm's length financial arrangement. This practice is...

Double Tax Agreement   What is double taxation? Double taxation is a situation in which a taxpayer is subjected to similar tax obligations by two different countries for the same income, during the same timeframe, and related to the same subject matter. This...

Dividend Withholding Tax   Dividend withholding tax is a final tax imposed on certain dividends paid by resident companies in Australia to non residents.  For the purpose of withholding tax, dividends include: Any distribution made by a company to its...

Interest Withholding Tax Withholding tax must be paid on interest income under certain conditions: If the interest is earned by someone who is not a resident for tax purposes. If the interest is paid by either: A resident, except when the interest is entirely related...

Royalty Withholding Tax    In Australia, royalties earned by non-residents are subject to withholding tax, unless specific exemptions are applicable under the tax laws. What are Royalties? Royalties can take various forms, including regular, irregular, or...

Source of Income     The source of income for tax purposesThe term “source” of income in Australian taxation can refer to both the geographic origin and the transaction or means by which income was generated. This definition forms the basis for tax liability...

Controlled Foreign Company   The Controlled Foreign Company (CFC) provisions form part of the accruals basis of assessing offshore income in the Australian tax legislation. It is referred to as an accruals basis because the Australian tax law can impose tax on an...

Value shifting   Value shifting is when the value of one asset increases while the value of another decreases as a result of certain actions. Value shifting rules attempt to prevent taxpayers from deferring or avoiding their tax liabilities. This can occur by...

Prepaid Expenses Tax Deductions   A prepaid expense describes a payment made in advance of the benefit of a service or receipt of something. The potential advantage of a prepaid expense is the opportunity for a taxpayer to bring forward the recognition of a...

Trading Stock   Division 70 of the ITAA 1997 outlines the tax treatment of trading stock. Section 70-10 ITAA 1997 defines trading stock as including anything produced, manufactured or acquired that is held for the purposes of manufacture, sale or exchange in the...

Non Commercial Losses   Division 35 of the Income Tax Assessment Act 1997 (ITAA 1997) contains provisions that prevent individual taxpayers who carry on a business from immediately deducting losses from that business against other income in certain circumstances....