RSM Australia appoints Sam Mohammad as national head of indirect tax practice

RSM Australia (RSM), one of the largest mid-tier accounting firms in Australia, has announced the appointment of Sam Mohammad as national head of its indirect tax practice.

Based in Brisbane, Sam brings more than 16 years of experience in providing clients with practical and easy-to-understand advice about GST, payroll tax, stamp duty, and fuel tax credits, with a particular focus on the energy, government, infrastructure, mining, and property (both residential and commercial) sectors. He has also advised on and successfully obtained GST private rulings and duty exemption requests on a range of complex matters.

Sam is a current member of the Tax Institute’s Queensland state taxes sub-committee and has been a previous member of the Australian Taxation Office’s fuel tax liaison group. He is an admitted solicitor of the Supreme Court in Queensland and, prior to joining RSM, worked as a director at KPMG, specialising in indirect taxes.

Sam Mohammad, partner, RSM, said, “Queensland is an exciting place to be right now with a strong business outlook and lots of opportunities on the horizon. I’m looking forward to bringing my skills to bear to help RSM’s clients maximise these opportunities.”

Andy Graham, managing partner – Brisbane, RSM, said, “The Brisbane office of RSM has been growing steadily over the last 12 months and Sam Mohammad is the fourth partner we’ve appointed in that time. The Brisbane office has exceptional depth and expertise available to help Queensland clients position themselves for growth. Sam’s extensive experience at KPMG as well as his prior role as a policy officer at the Queensland state government means he’s ideally placed to provide strong business advice for local businesses.”

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About RSM Australia

RSM Australia is a full-service national accounting and advisory firm delivering expert corporate financial and advisory accounting services to clients across diverse industry sectors. Its one-firm structure means clients can more readily connect to its extensive national and international networks, expertise and industry experience. Nationally RSM has 31 offices, combined with over 95 years’ experience. Its network spans across 116 countries and comprises 750 offices.

Minimal change to corporate tax rates expected in spite of global tax infrastructure reform says RSM research

RSM_Bird_Cameron_Logo@2xSydney, 1 December, 2014 – The majority of tax advisers globally expect corporate tax rates to remain relatively unchanged over the next three years, according to research by RSM, the seventh largest global network of independent audit, tax and advisory firms. This is in spite of global tax reform led by the OECD aimed at targeting tax avoidance by multinational corporations.

RSM analysed the views of its tax partners from 54 countries in its report, The Evolution of Tax. The report was developed in light of the increasingly global economy, which necessitates cross-border business. An international view of tax is vital for organisations to thrive.

Transfer pricing, increased information sharing between countries and a revision of the tax treaty framework are just three of the main areas where major changes are likely, according to the report. And while the focus of international tax authorities is currently on multi-national corporations, businesses of all sizes will need to plan their strategies accordingly.

Rob Mander, Director of Tax Services for RSM Bird Cameron in Australia, anticipates that the corporate tax rate will remain approximately the same in Australia over the next three years, which is in line with the majority of international advisors. Only eight per cent forecast a tax increase while 20 per cent expect tax rates to decline.”

In Australia, total tax revenue increased gradually as a percentage of GDP in the 35 years to 2000 but has fallen significantly since.

Rob Mander said: “Tax revenues have fallen following the impact of the global financial crisis in the late 2000’s and the subsequent challenge for the Australian government has been to find new sources of tax revenue to fund its expenditure requirements. Consequently we expect the highest marginal tax rate for individuals to increase by up to 5 per cent as governments deal with this revenue challenge.”

OECD tax reform challenges

Tax experts recognise that there will be huge challenges in implementing the OECD’s tax proposals. There is concern about the practicalities that governments will face because tax policy is a key component of their economic management and the OECD’s proposals involve giving up some of that national control in favour of a more global policy outcome. Detailed negotiations between countries on double tax agreements is also expected to be difficult.

Companies will be burdened by issues such as the requirement to disclose their transfer pricing policies in far greater detail. They will also be challenged by proposals to neutralise the impact of hybrid tax mismatch arrangements, where double deductions are obtained for the same amount, for instance, which require detailed cross-border understanding and agreement between countries.

Jean Stephens, Chief Executive Officer of RSM International, said: “The global tax system was built for an industrial age dominated by western powers and is no longer fit for purpose in the increasingly globalised, internet-driven, economy. We applaud the OECD’s unprecedented reform objectives and its inclusion of developing economies in its proposals, but it is clear that agreement and implementation will be very tough for governments and companies across the world.”

Changes will be required to domestic Australian tax laws as well as the international tax rules. These international changes will not occur evenly across various countries, and this will significantly increase the risk of double taxation.

Craig Cooper, Director of Tax Services for RSM Bird Cameron in Australia said: “The scope of the OECD’s Base Erosion Profit Shifting (BEPS) project is nothing short of a complete re-creation of the international tax architecture. Internationally active organisations need to be planning for the forthcoming changes, or risk being caught out with superseded and ineffective tax structures and arrangements.”

Much of the global tax debate has been about how to tax the ever-pervasive digital economy appropriately. RSM’s tax partners fully anticipate changes to the taxation of the digital economy to be part of an overall package of reform. Nearly three quarters (70 per cent) of the tax partners agreed with this statement.

Craig Cooper said, “Given the ability for digital businesses to extract significant value from a source country’s economy, without the need for any, or any significant physical presence in that country, it is no longer acceptable to many countries to exclude the ‘market’ as a right to tax a foreign company interacting remotely with that jurisdiction’s economy.”

Rob Mander said, “Locally, we’d like to see a Tax Ombudsman established to take up the cause of taxpayers unable to get a fair hearing from tax authorities in relation to requests for the reduction of corporate tax instalments and invalid tax assessments driven by tax audit revenue-targets.

“Globally, international tax is in a process of evolution that will bring many changes over the next few years. At a practical level, countries, administrators, businesses and advisers will face the challenges of dealing with major tax changes that seek to manage the global economy and digitisation far more effectively. Tax has a key role in assisting economic growth, and it will be critical that, whilst working to shape a new global tax infrastructure, governments don’t remove incentives to innovate, invest and grow business.”

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About RSM International

RSM International is the seventh largest network of independent audit, tax and advisory firms, encompassing over 100 countries, 700 offices and 35,400 people internationally. The network’s total fee income is US$4.5 billion.

In September 2014, RSM was awarded the prestigious Network of the Year 2014 award at the International Accounting Bulletin annual awards. The award recognises networks that have demonstrated strong growth and operational excellence over the past 12 months. Last year, at the March 2013 International Accounting Bulletin annual awards, RSM was awarded the prestigious Editor’s Special Award for Global Initiative of the Year for its worldwide initiative – RSM World Day – which was praised for being a unique and powerful cross-network initiative that enhanced both employee and client engagement.

RSM International actively engages in promoting and celebrating the very best in entrepreneurship, championing the role of the entrepreneur in today’s world economy. RSM International is the lead sponsor and corporate champion of the European Business Awards promoting commercial excellence and recognition of entrepreneurial brilliance.

RSM International is a member of the Forum of Firms. The objective of the Forum of Firms is to promote consistent and high quality standards of financial and auditing practices worldwide

RSM is the brand used by a network of independent accounting and advisory firms each of which practices in its own right. RSM International Limited does not itself provide any accounting and advisory services. Member firms are driven by a common vision of providing high quality professional services, both in their domestic markets and in serving the international professional service needs of their client base.

2014 marks an exceptional year for RSM International as it celebrates its 50th anniversary.

www.rsmi.com

Seven ways to minimise tax liabilities before the end of the financial year

RSM_Bird_Cameron_Logo@2xMarch 7, 2013 – With the end of the financial year fast approaching, organisations need to start looking at ways to minimise tax liabilities. RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, offers seven tips business owners should consider.

Andrew Graham, national head of business solutions, RSM Bird Cameron, said, “While business owners should have strategies in place all year round to reduce tax liabilities, 30 June presents some additional opportunities and is a critical deadline for minimising tax for the financial year.”

RSM Bird Cameron’s seven key opportunities for business owners to reduce their tax liabilities are:

1. Superannuation. The minimum super business owners must pay is 9 per cent of each eligible employee’s ‘ordinary time earnings’. Payments must be made at least four times a year by 28 days after the end of each quarter, including the quarter ending 30 June 2013. Business owners can generally claim a tax deduction for super contributions that are paid on time. However, super is one contribution that can’t be claimed until it is paid.  This means business owners need to pay the contribution before 30 June to claim it in the 2013 year. Given this year 30 June falls on a Sunday payment would need to be made well before 30 June.

2. Personal super. Like employee super, business owners also need to pay their personal super contributions prior to 30 June to get a deduction.

3. Bad debts. These should be written off prior to 30 June to be eligible for a deduction. Business owners should go through their debtors list and write off anything that is not collectible.

4. Stocktake. A 30 June stocktake is required to determine the correct value of closing inventory and find any obsolete or damaged stock. Business owners can choose to value the stock at cost, replacement or market sale price depending on what is lower. This means that stock that is obsolete or damaged can be written off or reduced in value for tax purposes and claimed as a deduction.

5. Bring forward expenses. Do some forward planning and look at expenditure for the next few months. There may be some expenses that will be incurred but would be better brought forward. Consider items like training, repairs and maintenance or prepaying some interest. The $6,500 instant asset write off commenced in the 2012/13 year, so businesses may consider bringing forward any capital expenditure of less than $6,500 to receive the automatic deduction.

6. Shareholder loans. Make sure that loans are set up properly or repaid by the end of the financial year. Otherwise, business owners could end up with a deemed dividend and some unexpected tax.

7. Trust distributions. If operating a trust, make sure the trustee decides how the profit will be distributed prior to 30 June.  This decision should be recorded and signed off before the end of the financial year.

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About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the seventh largest network of independent accounting and consulting firms in the world.

RSM Bird Cameron urges businesses to start preparing now for the carbon tax

RSM_Bird_Cameron_Logo@2xMay 14, 2012RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, is urging businesses to start preparing now for the introduction of the carbon tax on July 1, 2012.

Tim Pittaway, principal, RSM Bird Cameron, said, “The task of transitioning to a low-carbon economy will place significant regulatory, market and reputational pressures on business.

“The main implication for management and boards is that carbon risks need to be integrated into decision-making and risk management processes throughout the organisation. Company directors need the skills and expertise to understand and respond to climate change-related risks.

“Businesses that do not manage carbon risks appropriately will fail to become compliant with emerging legislation or will not manage to collect quality emissions data or produce quality disclosure.”

The areas business should be considering in their strategies include:
* carbon risk management
* compliance audit with existing and future carbon legislation
* internal audit reviews of carbon reporting procedures, systems and internal controls
* verification and assurance of emissions reports
* tax and accounting advice for treatment of carbon permits and allowances
* tracking ongoing developments in environmental regulations aimed at mitigating greenhouse gases
* assessing the potential impact of global climate change on the company’s stakeholders
* devising the appropriate mixture of risk management instruments required to lower climate change-related threats to acceptable levels
* evaluating the company’s position in the technological landscape of sustainable energy
* undertaking strategic acquisitions of advanced energy technologies
* identifying possibilities for boosting energy efficiency within the organisation
* formulating and executing strategies to exploit emerging growth opportunities in sustainable energy markets.

Pittaway said, “Businesses need to identify opportunities to improve the management and reporting processes in place to manage, collect and report on emissions, energy consumption and broader environmental performance.

“Systems for addressing the risks need to be put in place and continuously monitored.”

RSM Bird Cameron advises the following issues should be considered.

Identification of primary liability under the proposed Clean Energy Legislation:
* identify any “facilities” of the company as defined under the National Greenhouse Energy Reporting Act and the operator of any such facilities
* determine the amount of emissions released by that facility that are covered by the Carbon Pricing Mechanism. If it is greater than 25,000 tonnes of carbon equivalent emissions per year, there is a registration requirement.

If the business has a primary liability under the Clean Energy Legislation:
* identify the gross quantum of emissions and verify the accuracy of those emissions
* assess whether any mitigation incentives are available, i.e. free carbon units, to reduce the primary liability
* determine the indirect cost impact of supply chain into the business, such as electricity
* model the impact of the direct and indirect costs of the Clean Energy Legislation
* assess whether such costs can be passed onto customers either contractually or through market forces.

If the business does not have a direct impact or requirement to register:
* determine the indirect cost impact of supply chain into the business, such as electricity
* determine whether any mitigation incentives are available to reduce the overall cost to the business
* assess whether such costs can be passed onto customers either contractually or through market forces.

Industry assistance:
* assess the availability of financial assistance such as through the allocation of free permits for emissions-intensive trade-exposed (EITE) activities under the Jobs and Competitiveness Program, the Clean Energy Innovation Program, the Carbon Farming Initiative and other grant programs.

Financial reporting and taxation impacts:
* consider appropriate accounting treatment for any carbon units acquired and surrendered
* review the possible impairment of the value of affected assets
* include greenhouse reporting needs in corporate governance framework corporate tax implications, including cashflow impacts as a result of having to acquire carbon units.

Corporate governance and emissions measurement:
* allocate responsibility for greenhouse reporting
* assess emissions methodology and data
* establish appropriate reporting and documentation systems and processes.

Pittaway said, “Global climate change promises dramatic changes in the environmental, regulatory, and competitive environment of corporate Australia in the coming years and businesses need to consider now how to strengthen their capacity to navigate these shifts.

“Business that do not consider carbon as a major source of risk will also miss opportunities for future growth markets.”

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About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the sixth largest network of independent accounting and consulting firms in the world.

RSM Bird Cameron urges SMEs to start preparing now for the effect of carbon tax

RSM_Bird_Cameron_Logo@2xMay 14, 2012RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, is urging small to medium-sized enterprises (SMEs) to start preparing now for the introduction of the carbon tax on July 1, 2012.

Tim Pittaway, principal, RSM Bird Cameron, said, “The task of transitioning to a low-carbon economy will place significant regulatory, market and reputational pressures on all businesses.

“While the carbon price will firstly affect big polluters, the most likely outcome is that extra costs will be transferred onto SMEs and consumers.

“SMEs need to start preparing for the introduction of a carbon price in Australia and initiate moves to understand their carbon exposure.

“The more Australia continues to generate additional carbon emissions, the higher the carbon price and the more expensive reduction strategies will become, which is why SMEs have a real incentive to
start accounting for carbon sooner rather than later.”

Issues SMEs should start considering now:
* what risks does the business run by ignoring existing and future carbon emissions regulations?
* do business owners and managers understand the business’ carbon footprint including how much energy it consumes and how much greenhouse gas it produces?
* what is the business’ carbon reduction strategy?
* how will additional carbon emissions regulations, in particular the introduction of a carbon price, impact the business’ financial bottom line and accounting and reporting practices?
* will the business’ stakeholders demand more transparency on actions to reduce carbon emissions?

Pittaway said, “SMEs should also be aware that products and services made from less polluting material will ultimately become cheaper compared to products made through processes that incur more carbon pollution.

“This may provide the opportunity for SMEs to realise cost savings through careful selection of suppliers.”

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About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the sixth largest network of independent accounting and consulting firms in the world.

Forfeited deposits – the tax consequences to the purchaser

Sydney, September 8, 2010 – In most circumstances when a purchaser enters into a contract to purchase property he is requested to pay a deposit. However, should the purchaser forfeit his deposit by deciding not to proceed with the contract there are some serious tax consequences.

In an ATO Tax Ruling the Commissioner clearly states that where the purchaser decides not to proceed with a contract and forfeits the deposit, the purchaser will generally not be entitled to claim a capital loss. On the other hand, the seller, would in most cases, include the deposit as a capital gain in his tax return.

For example, Mr. X purchases a rental property from Mr. Z for $1 million and pays a deposit of $50,000. Later Mr. X decides not to proceed with the purchase because he is concerned that interest rates may increase, or he decides the property is not suitable. As a result, Mr. X forfeits his deposit of $50,000. In these circumstances the ATO view is that Mr. X will not be entitled to a tax deduction or capital loss of $50,000. However, Mr. Z will have to return the forfeited deposit of $50,000 as a capital gain.

It should be noted that there are limited circumstances where a capital loss can be claimed and taxpayers should get professional advice before deciding to abandon or forfeit their deposits.

About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia serving the middle market with technical and commercial expertise over the full range of specialist corporate and business advisory services including assurance and advisory, corporate finance, taxation consulting and turnaround and insolvency.

RSM Bird Cameron is a core member firm of RSM International, the sixth largest accounting and consulting organisation in the world.

Small-to-medium sized businesses in trusts may be forced to restructure

The Federal Government & the Australian Taxation Office (ATO) continued to alienate themselves from the business sector last week with the Tax Office releasing its final ruling on discretionary trusts distributing surplus income to corporate beneficiaries.

This means that some trust distributions may be recorded as a deemed dividend for Div 7A purposes. Accordingly, these deemed dividends may be taxed at 46.5 % instead of the corporate tax rate of 30%.

From a business perspective where businesses are owned by a family trust (one of the most common ownership structures for SME’s in Australia), profits that have previously been reinvested for capital expenditure, expansion and debt reduction may now be taxed at the 46.5% penalty tax rate.

The ATO has adopted this approach despite objections from accountants’ representative bodies. The implications for the SME sector already struggling in a “stimulus free trading period”, for job opportunities within the sector and for a recovering economy are patently obvious. Further, it casts doubt over strategic planning for the SME sector where, advice on structuring for a SME given in November, 2009 will be vastly different to that given post last week’s ATO announcement.

Worse still, since the draft ruling in November, 2009, there have been numerous submissions to the ATO and articles written outlining all of the reasons the ATO position is wrong under the law. Accountants therefore suspect that at some stage this issue will be decided by the courts which, in the meantime, means that the SME sector continues to struggle under this period of uncertainty.

The logical outcome from the ATO position is that an already struggling SME sector may need to under go a costly restructuring process to enable it to meet changing capital expenditure needs, employ Australians and compete in the commercial market place.

About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia serving business with technical and commercial expertise in agribusiness and SME’s and a full range of specialist corporate and business advisory services including succession planning, superannuation, assurance and advisory, corporate finance, taxation consulting and turnaround and insolvency.

RSM Bird Cameron is a core member firm of RSM International, the sixth largest accounting and consulting organisation in the world.