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7 Jun 2018

It is sometimes said that a superhero like the DC Comics character Superman can be uninteresting because he is, for all practical purposes, indestructible.  Critics have said the knowledge that he will most likely win can make Superman's adventures monotonous.

A similar accusation could be leveled at the Federal Commissioner of Taxation (the flesh and bone personification of the ATO).  To most people, including a hefty majority of small and medium businesses, the Commissioner appear to be immune from defeat.   He...

18 Apr 2018

While bitcoin may be the most well known cryptocurrency, there are nearly 1,500 in existence.  In its simplest form, a cryptocurrency is a "peer-to-peer electronic cash system", which means that the currency is not in a physical form like cash but sits in an electronic register.

What makes bitcoin work, where previous attempts at electronic cash did not, is in the magic of something called blockchain.  One of the problems with earlier electronic cash was that it was possible for those with the skills to fool the s...

12 Mar 2018

Where some businesses have tripped up in the past is where the source of benefits provided is not clear cut - that is, where non-cash components of remuneration are sourced not directly from an employer, but from an associate, a related company or from a third-party provider.
 

For fringe benefits tax (FBT) to apply, the conventional wisdom is that the benefits involved are provided instead of cash salary, and further that such benefits are usually paid in respect of an employment relationship. Hence the pool of a...

2 Feb 2018

It is very often the case that unpaid debts owed to a business can have a significant impact on cash flow and the ongoing profitability of a business. In a taxation context the characterisation of a particular debt as either “doubtful” or “bad” is key as to whether or not the writing off of that debt would be deductible.

Generally, the characterisation of a debt would be premised on the following principles:

- Doubtful debt – is a receivable amount that might eventuate to be a bad debt in future. Doubtful debt ofte...

7 Dec 2017

As a tax concept, “entertainment” can be relevant not only to fringe benefits tax (FBT), but also to income tax and even goods and services tax (GST).

For a business, whether a business expense is “entertainment” will generally also determine whether the cost is deductible. If the expenditure can be shown to be directly connected with the carrying on of a business, it should be deductible.

The example of someone taking a client out to lunch can certainly be shown to be in connection with a business.  However, there...

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