From transfer pricing to digital tax, trade wars and tax reform, the tax landscape is changing fast. The Tax Institute’s Senior Tax Counsel Professor Bob Deutsch, CTA, reveals what he sees as the top tax trends for 2020…
Fundamental global shifts and digital disruption are set to change the face of the Australian tax industry, with 2020 looking like a year of significant change. According to The Tax Institute’s Senior Tax Counsel Bob Deutsch, the key issues high on the agenda this year are in the international arena.
“I think the top trending topics in Tax for 2020 are in the international arena, with transfer pricing, corporate residency and digital tax undoubtedly set to be huge issues,” he says.
“Of course there’s also the challenge of keeping up with the legislative landscape, with changes happening in the international arena set to impact tax practitioners across Australia who operate in that space. In fact, the whole area of international tax has had quite a dynamic element about it for a number of years. But this year it will have an even bigger prominence.”
Digital tax in the disruptive age
Bob stresses how Digital Tax will continue to surface in the press as a hot topic for debate, with the Federal Government seeing digitisation as continuing to have a significant economic and societal impact on all Australians.
“It’s a very topical area and it’s interesting to see that Francehas had something to say about this - but Australia is no exception,” Bob explains.
“We’ll see more action taking place in that area over the next decade. Exactly what that action will be is hard to predict, whether it be a global initiative to deal with digital tax, or individual actions by individual countries. That’s going to be open to debate, but it’s certainly going to be a big challenge.”
A balancing act between Income Tax, GST and CGT
Being on top of the latest tax reforms will continue to remain a priority for tax professionals serious about staying ahead of the curve, with Bob emphasising balancing GST with Income Tax reform as a potential challenge for the Federal Government to address in the year ahead.
“The mix and balance between GST and Income tax is a critical issue that needs focus,” Bob adds.
“We’ve had GST for around 20 years, it’s time this be looked at again – not just about the rate, but the base can be looked at and revised and Income tax rate could consequently be lowered.”
Capital Gains is another hot topic to consider for 2020, with Bob stressing why it’s time to address the rate despite the controversy surrounding recent proposals for reform.
“The other area I think needs to be looked at is capital gains tax – again some lowering of
the income tax rates could be offset by reductions in the CGT discount,” he states. “Now I know that’s an area where in the last Federal Election, Labor’s suggestions were rejected.
But this year the Government may look to address this challenge.”
Changes on the horizon for Corporate Tax
“Top emerging challenges within corporate tax for 2020 in particular, are likely to be in the area of directors and their responsibility for dealing with company tax,” Bob explains.
“Director’s need to pay close attention to the corporate tax affairs of their companies now more than ever. And The Tax Summit has great sessions dedicated specifically to this issue.”
With globalisation and digitisation continuing to impact the structure of businesses, Bob foresees The Board of Taxation will likely re-examine corporate residency and may even be focussed on issues relating to source of income. Anti-avoidance provisions for international companies may also be reviewed in particular.
“The other issue that’s likely going to be an issue is the definition of corporate residency which the Board of Taxation is currently looking at,” Bob adds. “Of course anti-avoidance provisions will also be on the agenda in the context of companies particularly in the international arena. As mentioned before, it’s an area that will need to be revisited.”
Future-proof your Tax knowledge in 2020
As the new decade brings with it fresh opportunities and challenges, practitioners need to ensure they are aware of the tools, resources and information available to help future-proof their skills. According to Bob, The Tax Summit is a valuable opportunity for tax professionals to network, keep informed and explore options of addressing the critical issues around tax .
“The great thing about the Tax Summit is there’s such a powerful array of specific streams relevant to every practitioner in Australia to help overcome their challenges for the year ahead,” Bob says.
With the technicalities of tax evolving so fast, the sheer volume of tax information can be overwhelming to digest. To break things down and simplify the complex landscape, The Tax Summit holds engaging workshops, hands-on analyses and practical live demonstrations across the hottest topics in tax.
“The most exciting thing I think about the Tax Summit is the workshop sessions, which are a new innovation that will be practical, hands-on analyses of all the latest critical issues such as transfer pricing, ATO audits and more,” Bob says. “Practitioners can experience live demonstrations unlike anything we’ve done at the Tax Institute before.”
“The Tax Summit should be on every tax practitioner’s radar,” Bob concludes. “It’s without a doubt the leading tax event in Australia for 2020, and it’s extremely specialised and directed to help tax practitioners tackle specific challenges they will face in the coming year.”
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