10 th anniversary of the chamber of tax advisers russia international tax congress marriott grand...
DESCRIPTION
10 th Anniversary of The Chamber of Tax Advisers Russia International Tax Congress Marriott Grand Hotel, Moscow 2 & 3 February 2012. Mr Gil Levy – President Asia-Oceania Tax Consultants’ Association. AOTCA – INTRODUCTION HISTORY PURPOSE RECENT ACTIVITIES. THE TAXPAYERS CHARTER - PowerPoint PPT PresentationTRANSCRIPT
10th Anniversary of The Chamber of Tax Advisers Russia
International Tax CongressMarriott Grand Hotel, Moscow
2 & 3 February 2012
Mr Gil Levy – President Asia-Oceania Tax Consultants’
Association
1. AOTCA – INTRODUCTION
• HISTORY
• PURPOSE
• RECENT ACTIVITIES
2. THE TAXPAYERS CHARTER
• JOINT VENTURE AOTCA, STEP, CFE
• RESPONSE TO ‘GLOBALISATION’ OF REVENUE AUTHORITIES
• IMPETUS – CFE’s 50TH ANNIVERSARY PUBLICATION OF TAXPAYERS' RIGHTS IN THE EU AND AUSTRALIAN TAXPAYERS CHARTER
• QUESTIONNAIRE 50 COUNTRIES
3. AREAS COVERED
• EXISTING TAXPAYERS CHARTER
• TAX ADMINISTRATION IN GENERAL
• TAX FILINGS
• ASSESSMENTS
• AUDITS
• APPEALS ASSISTANCE
3. AREAS COVERED (continued)
• SERVICE STANDARDS
• RULINGS AND INTERPRETATIONS
• TAXPAYER RECORD
• CONFIDENTIALITY PRIVACY
• DEALING WITH THE TAX ADMINISTRATION
• BURDEN OF PROOF
3. AREAS COVERED (continued)
• DRAFTING LEGISLATION
• RETROSPECTIVITY
• DOUBLE TAXATION
• INTEREST AND PENALTIES
• DEVELOPMENT OF TAX LAWS
4. CHARTER DEALS WITH RIGHTS AND OBLIGATIONS
5. SHOULD BE LEGALLY BINDING
AUSTRALIA ASPIRATIONAL
6. APPLIES TO ALL TAXES
7. END GOALS
• WORLD WIDE STANDARD
8. TRENDS IN TAX POLICY – AUSTRALIA
• LATEST REVIEW KNOWN AS THE HENRY REVIEW – AUSTRALIA’S FUTURE TAX SYSTEM
• “ROOT AND BRANCH” REVIEW – SOMEWHAT ASPIRATIONAL
8. TRENDS IN TAX POLICY – AUSTRALIA (continued)
• NEW AGE THINKING – RECOMMENDATIONS
§ 40% DISCOUNT IN RATE OF TAX ON SAVINGS
§ ELIMINATE WITHHOLDING TAX ON FINANCIAL INSTITUTIONS OPERATING IN AUSTRALIA
§ REDUCE THE RATE OF TAX ON SUPERANNUATION FUND EARNINGS FROM 15% TO 7.5%
§ 40% RESOURCES SUPER PROFITS TAX ON THE MINING INDUSTRY (This has been taken up – but may not last)
9. OTHERS
5. BUSINESS LEVEL EXPENDITURE
6. REPLACE DIVIDEND IMPUTATION WITH A SHAREHOLDER TAX I.E. ON DIVIDEND
7. BROAD BASED CASH FLOW TAX DESIGNED ON A DESTINATION BASIS
10.THE TRADITIONAL APPROACH
• BROAD-BASED / LOW-RATE• AUSTRALIA 1980’s CGT, FBT TAX ON SUPERANNUATION
CONTRIBUTIONS CFC AND FIF• THE LOWER THE RATE THE LESS EFFECT TAX HAS ON
INVESTMENT DECISIONS
• ALL TREATED EQUALLY IF INCENTIVES ELIMINATED• REVIEW RECOMMENDS REMOVAL OF EXEMPTION ON
FOREIGN EARNED INCOME, TAX SUPER CONTRIBUTION STRENGTHEN PERSONAL SERVICES INCOME RULES.
11.THE NEW WAVE
• BROAD BASED DOESN’T MINIMISE ECONOMIC DISTORTIONS
• ECONOMIC DISTORTIONS DEPEND ON MARGINAL ELASTICITY'S
• DIFFERENTIATION MAY BE PREFERABLE
12.EXAMPLES
• TOP PERSONAL RATE SHOULD BE ZERO
• INCOME TAX IS A TAX ON CONSUMPTION WHAT IS SPENT BECOMES EARNINGS. TAXING INCOME FROM SAVINGS IS DOUBLE TAX WHEN SAVINGS ARE SPENT
• TAXING SAVINGS INCOME LEADS TO OVER CONSUMPTION IN EARLIER PERIOD
12. EXAMPLES (continued)
•DIFFERENTIATING TAXES BETWEEN MALES AND FEMALES – FEMALE TAX RATES SHOULD BE LOWER
•TAX OWNER OCCUPIED HOMES MORE AFFORDABLE FOR YOUNGER FAMILIES US EXPERIENCE
13.CORPORATE TAX
• ALLOWANCE FOR CORPORATE EQUITY o ELIMINATES DISTINCTION BETWEEN FINANCING BY
WAY OF DEBT OR EQUITY
• CASH FLOW CORPORATE TAXo REAL CFCT – TAX ALL REAL RECEIPTS AND ALLOW
DEDUCTION FOR ALL EXPENDITURE – INTEREST IS NON DEDUCIBLE NON-ASSESSABLE
13.CORPORATE TAX (continued)
• A CFCT AND ACE IMPLIES ONLY ECONOMIC RENTS WILL BE TAXED
• CORPORATE TAX CAN BE DEFERRED INDEFINITELY BY RE-INVESTMENT OF PROFITS IN ASSETS AND IS PRO-GROWTH
13.CORPORATE TAX (continued)
ALTERNATIVE
• CFCT INCLUDING ALL OUTFLOWS AND INFLOWS THEREFORE ONLY TAX INCREASE IN EQUITY
• DIFFICULT TO INTEGRATE WITH OTHER INCOME TAX JURISDICTIONS
14.COMPARISON – EXAMPLES
INCOME TAXBORROWING $100PRICE $100INCOME $10 X 10 $100INTEREST EXPENSE $10 X 10 ($100)SALE PROCEEDS $100TAX BASE NILTAX @ 30% NIL
IF FUNDED BY EQUITYTAX BASE $100TAX @ 30% $ 30
UNDER ACE EQUITY DEDUCTION WOULD BE $100 THUS REDUCING TAX BASE TO NIL
ALTERNATIVE UNDER CFCT RESULT THE SAME
SUBSCRIBED CAPITAL $100COST OF ASSET ($100)INCOME $10 X 10 $100TAX BASE NILTAX @ 30% NIL
THIS IS WHY CFCT IS CALLED AN EXPENDITURE TAX
15.AUSTRALASIAN IMPUTATION SYSTEM
• CORPORATE TAX ONLY A WITHHOLDING TAX
• AN EXCESS TAX AT CORPORATE LEVEL IS REFUNDED
• NON-RESIDENTS AFFECTED