Personally, I think carry forward losses for corporations need to be amended. I don’t think a behemoth like Qantas should be allowed to carry forward losses indefinitely. It makes a mockery of the tax system when you see companies with billions in revenue yet paying either minimal or even no tax due to losses incurred sometimes even a decade a go.
SMEs, I would allow them to carry forward losses indefinitely for sure.
Never claimed a work related deduction before? (if not change accountants)
Well you can and your tax will be charged against your taxable income (gross tax income - allowable deductions)
That’s up to the board and shareholders of the company to decide.
Totally different conversation to a company operating within the rules of the tax act (which is was the poorly written article in the OP was about)
I find it fascinating that a company even had the opportunity to pay executive bonuses in a financial year where they had such a poor year that they paid no company tax.
I wonder if small businesses could do that.
ahh I picked the worst offender on that list, the top one in that ■■■■■ article and spent 5 minutes browsing the financials. No cherry picking
Huh - did you read the post where I put in their tax reconciliation, IT WAS DUE TO CARRY FORWARD TAX LOSSES
This gets my back up because the article doesn’t explain the fundamental difference between taxable income and tax payable. Instead
Operating profit and tax payable are fundamentally different.
But staying with QAN - if we go back years when they appointed Alan Joyce ( I believe he is Scottish)
I am sure the conversations at the time when they were we are on our knees - we need to poach an international CEO. In order to do this we need to pay him an attractive base + bonus
Think about it - how else would you get top talent to Australia.
Did they pay him a bonus whilst they were struggling? - probably
Would the board consider that justified now? - absolutely
that will wipe out our development and R & D industries
why would a company set up in Australia - spend years and $$ developing a drug/patent/technology - run a loss for years and then not be able to claim if/once they finally turn a profit.
Imagine pitching that idea to investors - what would the ROI look like.
Instead they will just poach our best talent, pay them double and set up in Texas
Legit what R&D industry? It’s minuscule, we’re the lowest (or one of) R&D spender in the OECD.
I didn’t say apply it equally everywhere, you could give specific exemptions to certain industries/players. That being said, you do realise that there are numerous studies which show taxation is well down on the list of priorities RE: foreign investment decisions.
I am not specifically talking about R&D industry (that was an example), I am talking about companies with front end expenses - so naturally start running a loss. Most small businesses don’t turn a profit for years.
You are saying to those companies, tough luck on claiming those losses. That fundamentally changes the tax system.
You want to pick and choose who this applies to? Make an already complicated system, more complex? Good luck with the admin costs on that one.
I think you are trying to have your cake each way here.
It’s like the political discussion around negative gearing. Let’s ban it, no limit to ‘x’ properties, nah only new properties, what about certain areas?
How does this actually get written into the tax act? Are we denying the definition that real property is an investment asset?
Can it not be classed in the same bracket as shares? What about negative gearing on shares, with a margin loan? Does this remain vs negative gearing on property?
Instead they should be having a conversation on limiting the interest claimed in relation to investments to a $$ amount per year. Easy
But instead, its political and ‘mahhh property is bad’
People do not take the time to understand the ‘why’ in relation to tax. I don’t blame the public, the media and our politicians feed us horseshit in this area, because they don’t know what they are talking about.
I recently watched the treasury during the senate inquiry - trying to define a place of resident in regards to CGT exemptions for your PPR. It was embarrassing.
Did you not read where I specifically said SMEs would be able to carry forward losses indefinitely?
I am only targeting mature large to multinational enterprise.
We need to fundamentally change the tax code because by and large we have a system where a lot of the benefits get skewed toward the highest income earners. Franking credits, super concessions for example.
You are absolutely cherry picking. But you showed your hand here
Its not really about the tax act, its the resentment of high-income earners. Well, people earn a different level of income all across the world, always have, always will. Unless you support socialism?
The tax act is not a ‘benefit’ it is law - law for all Australian tax residents to follow. People have the freedom to follow or not, totally up to them.
That’s right, we all are jealous of those scum-bag high income earners. Socialists are just really bad people for wanting workers to get their fair share of the pie.
And Mr Tax Guru, thanks for letting me know it is optional to follow our tax laws. If I ask the ATO, do you think they will send me back all the tax we pay each year, seeing I that in your words “totally up to them” to follow.
How? Providing carry-forward loss relief indefinitely for SMEs and perhaps extend that to medium enterprise while large to multi-national corporations are capped at x-years. It’s not really that difficult a concept to understand.
Don’t put words in my mouth. It’s about equality and nothing more. There are many regressive tax structures in place in the Income Tax Act. The benefits of those structures disproportionately flow to the highest income earners who need tax relief the least. What’s wrong with socialism anyway? You have a problem with trying to put more money in the hands of workers? The current neo-liberal bullshit system we have is clearly broken and continues to create greater inequality.
Don’t be so narrow, the tax act contains legislation which provides tax ‘benefits’ for certain transactions i.e. Franking credits
They still ran a ■■■■ campaign.
They were almost invisible, other than the party infighting crap.
Pretty simple, shouldn’t be allowed for any business owned, or significantly owned, offshore.
How can anyone think it a good thing for our government to owe money - our money - to a bunch of OS stockholders, to be redeemed at their convenience?
If they properly went down the ■■■■■■■, would they pay us back? Not a chance!
They’ve never been in power and unlikely to be in the near future, so the icac conviently want impact them. Of course they can take the high road.
Tax paid by companies is close to irrelevant. We tie ourselves up in the morality of it, but dividend imputation ensures tax is paid either way.
If a company pays zero tax then the dividend is unfranked and the shareholder has to pay tax on it. The ATO still gets the cut.
To be a little bit fair the high road is the one they’ve generally travelled. It traditionally hasn’t been where the votes are. Political shenanigans aside, Greens are for you whether you like it or not.
LOL. As if the name isn’t enough of a give away… Have you heard him speak?
To be sure, to be sure.