Panbo Ye

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When the juices are GST-free

Q: ATO links note that bottled drinking water is GST-free, and if the fruit and vegetable juices’ content is greater than 90%, they are GST-free and GST taxable if is not. Peggy does not make fresh juices. She just buys bottled juices and then put them in the fridge and sell by bottle. The link above notes that taxable food includes all food and beverages sold in restaurants or for consumption on the premises. 99% of the patrons sit down and eat the food that is sold, but Peggy also sells takeaway coffees and customer could buy drinks in the bottle and take those away. Peggy needs some advice on whether or not the sale of bottled juices and water in a café setting is GST-free.

Is GST required for foreign services?

Q: M company is an Australian company, which owned by Australian shareholder and UK shareholder equally. The UK shareholder carries on a similar business in the UK under the same branding that the Australian company carries on in Australian. The Australian company has engaged the services of a digital marketing agency to do some advertising design. It has on charged some of the cost of the design to the UK company for design services. Is the on-charging of the design for UK company subject to GST?

Small business tax rate requirements

Q: A client has several entities. One of them has a turnover of more than $2 million, and another one has a turnover of less than $2 million. When the accountant prepares the tax returns for the smaller entity (less than $2 million), can the accountant use the 28.5% company tax rate, or does she need to consider it as a whole group which has a turnover of more than $2 million?

Adding spouse as a borrower

Q: A sole trader taxpayer has a line of credit from an Australian bank. It is used for business purposes only. It is secured by a property held in the joint names of the taxpayer and his spouse. For asset protection purposes, the taxpayer wishes to transfer his interest in the property to his spouse. The bank wants security to be owned by a borrower and has requested that the spouse’s name be added as a borrower on the line of credit. Would having the spouse named on the account jeopardise full deductibility to the sole trader of interest paid on the line of credit if the fund is applied solely for business purposes?

Distributable surplus within Div 7A

Q: A client who took a $30,000 loan from his company last year. At the end of the year, the company had no net assets. It made a profit of around $60,000 but retained losses offset this and there was no distributable surplus. How to deal with this in the accounts? Does it need to include an unfranked dividend for the loan, apply it to the loan in the balance sheet, reduce it to nil and not declare the dividend in the shareholder return as it is not taxable? Or need to leave the loan in the balance sheet, not declare any dividend, mark it as being assessed for Div 7A purposes? In the following year, the taxpayer made another loan to himself of $5,000. The company made a loss of $32,000. How is the distributable surplus calculated if I have left the loan in the account for the $30,000 from last year?

GST Adjustments

Q: Fiona Wilkes runs a delivery business and is registered for GST, purchased a car for $33,000 (GST inclusive) on 15, Oct 2011 to use in her delivery business, planned to use the vehicle 90% for business and 10% privately.

Fringe benefit tax exemption

Q: A client who has public benevolent institution status and he is changing from being an incorporated association to a not -for -profit company regulated by the Australian Criminal Intelligence Commission from July 1,2017. They can claim the FBT exemption and want to know if they can claim the full year exemption in the first entity from April 1, 2017 to June 30, 2017 and then claim the full year exemption in the new entity from July 1, 2017 to March 31,2018.

GST relates to the sale of commercial property

Q: A client needs guidance relation to the sale of commercial property sold as a going concern and its GST implications. As there is no GST on the sale of the property, what happens to other expenses such as commission and legal fees, which include GST? Can the GST on these items be claimed?

GST about provision of overseas services

Q: I want to engage a US company for IT consulting. They will invoice my firm and I will pay them in US dollars. Can the US firm consult in Australia (no hidden licenses)? Do they need an ABN? Does the US firm pay GST?

The CGT for the sale of the “composite assets”

Q: A client H (a private company) owns a property with seven townhouses on it that were being rented to tenants, In March 2017, the property was sold to a property developer (settlement has taken place). It has been sold on an untenanted basis for land value only.

Fuel tax credits

Q: A client who operates a marine mechanics business. He has purchased a boat that uses to move divers around to different locations. The boat runs off petrol, which is an eligible fuel for fuel tax credits.

Topics on tax issues for lessors and lessees (9)

TAX TIP – Temporary increase to ‘low cost’ and ‘low value’ thresholds

Topics on tax issues for lessors and lessees (8)

  • Subdivision 328-D
(i.e., the accelerated depreciation rules for SBE taxpayers)

An SBE taxpayer may choose to calculate depreciation under the accelerated depreciation rules (in Subdivision 328-D) instead of the uniform capital allowance rules (in Division 40). Broadly speaking, a taxpayer is an SBE under S.328-110 where:

Topics on tax issues for lessors and lessees (7)


Topics on tax issues for lessors and lessees (6)


Topics on tax issues for lessors and lessees (5)


Topics on tax issues for lessors and lessees (4)


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