Tax and Compliance

1. By Ben Youn
Copyright 2014 Quantum Business House
WELCOME to QUANTUM BUSINESS HOUSE

2.  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
Copyright 2014 Quantum Business House

3. 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)
Copyright 2014 Quantum Business House

4. Copyright 2014 Quantum Business House

5.  Sole Trader
 Partnership
 Trust
 Company
Copyright 2014 Quantum Business
House

6.  Company tax payable = Taxable income × 30
per cent of tax rate
 Taxable income = Assessable income –
Allowable deductions
Copyright 2014 Quantum Business
House

7.  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
Copyright 2014 Quantum Business
House

8.  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.
Copyright 2014 Quantum Business
House

9.  Business related expenses including,
 Motor vehicle expenses
 Bank charges
 Business equipment
 Home office expenses
 Interest and borrowing expenses
 Legal expenses
Copyright 2014 Quantum Business
House

10.  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)
Copyright 2014 Quantum Business
House

11.  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.
Copyright 2014 Quantum Business
House

12.  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.
Copyright 2014 Quantum Business
House

13.  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
Copyright 2014 Quantum Business
House

14.  Fixed Assets to be depreciated
 Preliminary Expenditure to be amortised
 Capital Allowance & Useful life
 Low value pool
Copyright 2014 Quantum Business
House

15.  GST Free
 Input Taxed
 Taxable Supply
 Input Tax Credit
 Registration Requirements
 Accounting for GST (Cash vs. Accrual)
Copyright 2014 Quantum Business
House

16.  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.
Copyright 2014 Quantum Business
House

17.  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.
Copyright 2014 Quantum Business
House

18.  Risk management
 Financial Health Check
 Business Evaluation
Copyright 2014 Quantum Business House