tax and compliance

By Ben Youn

Copyright 2014 Quantum Business House

WELCOME to QUANTUM BUSINESS HOUSE

2 hours for each session 10 minutes tea time Bathroom & Kitchen Today’s Speaker Please network each other Future Plan- Business Forum- Networking Events- Business Mentoring


House Keeping Time

1. Setting up business structure (June 04) 2. Buying a business (June 11)3. Business Planning (June 18)4. Marketing (June 25)5. Raising Finance (July 02)6. Financial Management (July 09)7. Tax system and compliance issues (July 16)8. Risk management (July 23)9. Financial Health Check (July 30)10. Business Evaluation (August 06)


Start-Up Business Seminar 2014

7. Tax System and Compliance



Sole Trader Partnership Trust Company

Tax Structure


Company tax payable = Taxable income × 30 per cent of tax rate

Taxable income = Assessable income – Allowable deductions

Company Income Tax


Any fee income on any services you provided to your clients

Sales of stock Dividends received from your shares Rent received on any premises you rent out to

other people Interest you receive from financial institutions Royalties received for licensing intellectual

property or brands, or from franchisees The gain you make when you dispose of any

equipment

Assessable Income


Not be a personal in nature or capital expenses, and

Should be spent in order to earn income or have a close relationship with the earning of income (Nexus Test)

Sometimes an expense will be both personal and work related. In this case, you should estimate the proportion of use for work purposes and only claim that portion as a deduction.

Allowable Deductions


Business related expenses including, Motor vehicle expenses Bank charges Business equipment Home office expenses Interest and borrowing expenses Legal expenses

Business Expenses (Deduction)


Accounting expenses Membership and subscriptions Business insurance Salaries and wages Internet Work related travel expenses Superannuation contributions for employees Depreciation on plant and equipments Black hole expenses (e.g. business setup

but limited 1/5 each year)

Business Expenses (Deduction)


Cost of Goods Sold: (Opening Stock + Purchases) – Closing Stock

Sales of trading stock give rise to assessable income Purchases of trading stock are deductible. Note

however, that a deduction is not available for the purchase of trading stock until the year in which the trading stock first becomes on hand or is sold to another

Where closing stock on hand is greater than opening stock, the difference is assessable income.

Trading Stocks


Where opening stock is greater than closing stock on hand, the difference is a deduction.

The value of opening stock must be equal the value of last year’s closing stock.

Closing stock on hand can be valued using cost price, market selling price or replacement cost. You can vary the valuation method year by year.

Trading Stocks


Business Loss (Operation Loss) and Capital Loss

Business Loss to be carried forward Capital loss to be offset against future

capital gains. Continuous Ownership Test (more than 50%

of shares must be owned by same persons) Same Business Test

Business Losses


Fixed Assets to be depreciated Preliminary Expenditure to be amortised Capital Allowance & Useful life Low value pool

Capital Expenditure


GST Free Input Taxed Taxable Supply Input Tax Credit Registration Requirements Accounting for GST (Cash vs. Accrual)

GST


Rollover Relief

An asset is transferred by an individual to a wholly owned company; or

A company is interposed into an existing business structure; or

Certain assets are replaced with similar assets.

CGT


Exemptions and Concessions

Your main residential home Certain compensation or damages for any wrong or

injuries suffered by the taxpayer Winnings from betting, a lottery or other form of

gambling, or a game with prizes. Cars, motorcycles and similar vehicles Collectables acquired for under $500 Personal use assets acquired for under $10,000 Assets used to produce exempt income Inheritance, when received, by beneficiaries of a

deceased estate.

CGT

Risk management Financial Health Check Business Evaluation


To be Continued!!