What a difference timing makes. A recent case before the Administrative Appeals Tribunal (AAT) is a reminder about the tax impact of the
timing of employment income.
When the job ended, the taxpayer moved to Australia and became a resident. Once in Australia, the former employer
honoured the performance bonus and paid it as a series of instalments.
The dispute between the ATO and the taxpayer started when the Commissioner issued amended assessments taxing the bonus payments received.
The dispute focused on when the bonus was derived. Had the bonus been derived while the taxpayer was still a non-resident then it would not
have been taxed in Australia.
This is because non-residents are normally only taxed in Australia on Australian sourced income. Employment income is typically sourced
in the place where the work is performed (although there can be exceptions to this).
Australian tax case law says that employment income is normally derived on receipt. In the taxpayer’s case, this was when he received the
payments from his former employer, not when he became entitled to the bonus. Because the taxpayer received the bonus when he was a tax
resident of Australia, the bonus was subject to tax.
The difference for the taxpayer was quite dramatic. Had he been paid the bonus when it was due, he would have paid no
tax as Kuwait does not impose income tax.
Please call us if you are concerned about tax residency or managing overseas income. We want our people to be the best they can be.
SMART Business Solutions are proud to have been awarded several significant awards recently.
We are extremely proud to announce that Shannon Smit, has been appointed to the Board of Taxation’s Advisory Panel for 2016.
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Don’t be left up in the air by traditional IT solutions. Check out our top 10 advantages for small businesses switching to cloud computing.Cloud computing is fast becoming the norm because storing information and using software hosted on the Internet has many advantages.
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We are frequently asked questions about obligations for WorkCover and Payroll tax. In this article we explore the details, cutting through the legal jargon so you can gain a greater understanding of how it effects you and your business.
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New Year’s Eve is famous for the New Year’s Resolutions people make to better themselves in the coming year. What about your financial future? How can you ensure you stick to your resolution?
Small business owners have a lot to think about: sales, staffing, customer service, vision, growth, the list goes on. In fact, it is hard not to think about your business when you’re a small business owner. Perhaps the one responsibility you would rather not think about is bookkeeping/accounting?
Some business owners try to avoid the hassles of accounting by simply ignoring the problem. “I’m too busy,” they say, but no business can hide from accounting. If late lodgement penalties aren’t motivating enough, hopefully the knowledge that you have basically no visibility into the vital indicators of business health will be.
Sure, there are online tools out there to make the process less burdensome, but could your time be better spent? And while you might think that a part-time bookkeeper might solve your problem, it really depends on your needs, and there are downsides there too.
HERE ARE what we think are THE TOP 5 REASONS TO OUTSOURCE YOUR bookkeeping to SMART Bookkeeping Solutions in Mornington
We often hear from clients “I often forget to send invoice reminders or statements and invoices are falling through the cracks, can Xero help with this?” Easy, of course it can!
It's time to celebrate! SMART Business Solutions are pleased to share with our clients some exciting news. The Finalists in the Australian Accounting Awards have been announced with the team being successful finalists in the following categories
- Best Marketing (you know we always try to be different!) Shannon was also interviewed http://www.accountantsdaily.com.au/breaking-news/8605-accountants-must-touch-their-clients-12-times-a-year
- Accounting Student - Well done Hayden!
- Office Administrator - Awesome effort Nicole!
- Partner of the Year - Shannon Smit for both Transfer Pricing Solutions & SMART Business Solutions
Quality Matters – Independent review with outstanding results for SMART Business Solutions
Paying an accountant to handle all of your financial reporting can be expensive, but if you have several different sources and deductions or if you own a small business, it can be worth it.
Is your business thriving, but you struggle to maintain positive cash flow?
Don’t let it crumble from underneath you
It’s nearly BAS time again - tips to make BAS processing easier
BAS time seems to come around quicker and quicker! Here are some tips to try and make it a little easier!
With June 30 quickly approaching we are pleased to provide our year end checklists and questionnaires to help you get organised.
The ATO has released Draft Practical Compliance Guideline PCG 2026/D2, and it’s very clear where they’re focusing next, property development structures, particularly where land ownership and development activities are split.
Tax planning is more than just a financial necessity—it's a strategic advantage for businesses of all sizes. By proactively managing your tax strategy, you can significantly reduce your liabilities, enhance cash flow, and ensure full compliance with ever-evolving tax regulations.
