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Abstract:
An underlying issue which inheres in any taxation framework relates to the manner in which it operates and the actual distribution of its imposts or appropriations. In this respect, a tax system needs to confront two fundamental (and interrelated) questions - first, precisely how the tax or impost should be imposed and, secondly, who should bear the legal obligation or onus of payment. These issues can be conceptualised not only from a purely legal or positivist perspective, in terms of identifying who will incur the obligation to pay tax, but also in terms of a more economic and instrumental standpoint as to which entity or individual should effectively be paying the tax. These alternatives may not result in the same conclusions, particularly for the taxation of business forms. To provide one example, if the business form has separate legal entity status from its members, should the business form, as a legal person, be subject to tax separately from its members? From a legal standpoint the response to this question is that such a business form should bear the impost. However, from an economical perspective it may be preferable that the business income and/or losses are directly allocated to its members. Indeed, tax transparency (aggregate approach) has been argued as an economically superior model, although it is not without its critics. Criticisms against tax transparency include the risk to tax revenue and the potential to distort investment decisions when allocated losses exceed a member’s financial exposure. Despite these criticisms, several foreign jurisdictions have implemented tax transparency in relation to business forms that are characterised by separate legal entity status and limited liability for members (referred to as tax transparent companies or transparent companies). Prominent examples include the United States’ S Corporations and Limited Liability Companies (LLC), the United Kingdom’s Limited Liability Partnerships (LLP) and New Zealand’s Loss Attribution Qualifying Companies (LAQC). The Australian government has been reluctant to fully embrace transparent companies, preferring the integrated approach of a full imputation system applying to corporate distributions. However, in response to pressure for reform, the Australian government has recently introduced two transparent companies, although they are not broadly available. These Australian transparent companies are incorporated limited partnerships used for venture capital investments (venture capital ILPs) and amendments to controlled foreign hybrid companies (CFC hybrids).

The question that needs to be raised in relation to the introduction of the foreign transparent companies entails precisely what were the underlying motivations that prompted their implementation in the first place. In particular, were these entities introduced purely on the basis of promoting tax neutrality, or were other factors or motivations influential in their creation? If, indeed, other factors were at play then this implicates the obvious question regarding the existence of similar factors in Australia - thereby, perhaps, facilitating the creation of the same type of entities in this jurisdiction.

A further interrelated question that needs to be confronted is whether these foreign jurisdictions have ensured that their tax revenue is not prejudiced or affected through the allocation of tax losses to members who do not have full liability exposure. If this is the case, then the consequent concern implicated here is whether Australia’s present loss restriction rules would be able (in such a circumstance) to adequately protect tax revenue in the pursuit of developing such a tax transparent company?

A final concern stemming from the foregoing issues is that, given the purported benefits that accrue to closely held businesses via tax transparent companies, how does transparency influence problems faced by this sector in terms of complexity, financing and governance.

It is these relevant questions to which attention will be focused on in this dissertation. In addressing these pertinent issues, tentative recommendations for policy and legislative reforms will be formulated in the concluding chapters.

tax transparency, Austrlian closely held businesses, business form, aggregate approach, transparent companies

Abstract:
In recent years concerns have been raised about a gap emerging between graduate attributes and what industry requires (Yap, 1997; Albrecht and Sack, 2000). This is often referred to as a lack of 'employment readiness' of students and the need to engage industry with students and the curriculum. Such a concern was highlighted in the 2007 report titled 'Graduate Employability Skills' prepared for the Business, Industry and Higher Education Collaboration Council. While work integrated learning attempts to address this issue, it is questionable how successful this is if students are not adequately prepared prior to their placement.

In an attempt to address this concern a Professional Development Program (the 'PDP') was developed. The PDP is integrated into the degree program and is designed to systematically develop students’ learning, employment and generic skills and supplements their theoretical studies. It is argued that this integration of the PDP permeating the Degree enhances students' employment readiness. In addition, the PDP created other tangential benefits to the students and the university in terms of student engagement and motivation.

This paper details the procedures that have been developed, and provides preliminary evidence on the impact of the first part of the PDP. It will be argued by the authors that to attain the possible benefits of a WIL program it is critical that practices and support mechanisms are adopted to emphases the 'I' - that is, the integration of work and learning.

Abstract:
Tertiary educators face increasing constraints and pressures in designing and delivering their course material. Accordingly, educators need to not only equip students with content knowledge, but also the ability to continue their learning independently through information literacy. In trying to determine this balance in the accounting curriculum context, we asked ‘what are business professionals’ perceptions of 1) information literacy in their workplace? and 2) the importance of content knowledge compared to information literacy?’ This paper details the findings of a pilot study conducted with business professionals from both the government and private sectors. Interviews explored how professionals go about finding and using new information in their day-to-day work, how they see research, and how they see the importance of content knowledge compared to the skills and knowledge of finding and using information.

information literacy, content knowledge

Abstract:
Success in modern business demands effective information literacy to address the ever-changing business context. This context includes changes in Government policy reflected through legislation and regulations, developments in case law and expectations of professional associations and the public. Students require the skills to continue their own learning beyond the completion of their degree, as no longer is learning the subject content of a course alone sufficient. This paper considers the methods utilised to embed information literacy, in the context of generic skills and graduate attributes, into a Business degree’s curriculum. The paper describes how information literacy has been embedded in two sequential third year Taxation Law courses, allowing for the explicit development of information literacy. Through the development of legal reasoning and research skills, students are empowered to continue their life long learning, which successful professional practice demands. The study will draw upon the experience of the course convener in designing, teaching and evaluating the courses, and on students’ experiences as illustrated through evaluation questionnaire responses and interviews. The findings of this study could be relevant to other business courses, especially company law and auditing.

Information literacy, business, education, lifelong learning, accounting, tax

Abstract:
History has shown that tax can play a pivotal role in society. For example tax features prominently with the Rosetta Stone, the American revolution and the Eureka stockade. Indeed, at the 2020 Summit, the arts sector considered that Australia’s tax system has an important role to play in assisting the arts. This sentiment is reflected in foreign jurisdictions implementing a range of tax strategies to assist the arts, such as exempt income, transfers of art in lieu of payment and deferred gifts. Some of these strategies are canvassed below with consideration of their potential application in Australia.

In the American state of Rhode Island, artists can be exempted from state tax on income from the sale of their work. Also, to encourage the creation of cultural hubs, the American state of Maryland provides developers property tax exemptions for the renovation or construction of space for artists.

Alternatively to support cultural innovators, the Canadian province of Quebec provides that copyright income for certain artists (writers, artists, filmmakers, musicians and performers) is tax exempt up to a cap. Similarly, Ireland for the last 40 years has provided tax-exempt status to Irish resident self-employed ‘creative artists’ deriving income from the sale or copyright fee for books and writing, plays, musical compositions, paintings or sculptures.

While the exemption of artists’ income may be appealing it needs to be acknowledged that such a system would increase complexity and create inequities amongst taxpayers. It should be recalled that Australia allows artists to average their income in order to ‘smooth’ it out, which can be subject to great variations from year to year. Also the income tax free threshold and low income offset can decrease a taxpayer’s tax liability. Given data about the level of income earned by artists – this may mean that there is relatively little or no tax being paid by Australian artists any way.

Another mechanism used overseas is to allow taxpayers to transfer property, including works of art, in lieu of payment of tax. In the United Kingdom taxpayers are able to transfer works of art and other heritage objects into public ownership in full or part payment of inheritance tax. Ireland has a broader system that allows for the payment of a number of taxes (such as income tax, corporate tax, capital gains tax, capital acquisition tax) through the donation of heritage items to certain approved bodies. In Mexico, artists can pay their annual tax obligations with their own art work provided it meets a quality test determined by a panel of experts.

There is some appeal in the transfer of art in lieu of payment of tax, although if made via the Australian Tax Office this could increase the administrative and compliance cost burden. An alternative is that artists could donate their work directly to a gallery and then for those artists to claim the market value of the donated piece as a tax deduction. Currently in Australia there is little incentive for artists or art dealers to donate art, as their deductions are limited to the cost of the piece rather than its market value.

Another way the tax system can indirectly assist the arts is to allow taxpayers to make fractional or deferred gifts to charities. These mechanisms can be advantageous for both donor and recipient, in terms of certainty and timing of deductions.

A ‘fractional gift’ describes when the taxpayer retains some right or interest in the property donated. For example, a taxpayer may initially donate one-quarter of a piece of art to a gallery, meaning the piece of art is displayed for three months a year at the gallery and for the remaining nine months is part of the taxpayer’s private collection at home. In the United States, with such a fractional gift the donor can claim a fractional tax deduction in the initial year, provided the art work is fully transferred on the earlier of ten years or the donor’s death. Further tax deductions for the donor follow each subsequent fractional gift.

Alternatively, a deferred gift can occur through a ‘retained life estate’, where the donor transfers property to a charity on the proviso that the donor (or other named beneficiary) should remain in the residence for life. In the United States, if the donor can claim the property as a personal residence, then the donor is allowed to claim an immediate tax deduction to the value of the charitable remainder interest. Also, the donor’s potential estate tax is reduced. Similarly, a ‘charitable remainder trust’ can be established by transferring assets to a trust, with the donor (or other beneficiary) receiving income from the trust for life or up to 20 years. At the death of the donor or last income beneficiary, the assets of the trust are distributed to a charity. In the United States, on the establishment of such a charitable remainder trust, the donor receives a charitable income tax deduction equal to the net present value of the remainder interest to the charity.

Accordingly, given international comparisons there are a number of potential tax reforms that could be implemented in Australia to assist the art sector. However, in ‘leading the revolution’ for reform it is important to take into account characteristics unique to a jurisdiction as these may influence the effectiveness of any reform. It is these unique characteristics that the author is currently considering in formulating tax policy recommendations to the Federal Treasurer and the Minister for the Arts.

Arts, Tax, Reform, International, film, tax concessions

Abstract:
This Report contains an overview of the current Australian tax treatment of the arts industry. To assist with this analysis, the art sector is divided into three broad categories: artists, art bodies and contributors. The Report highlights a number of mechanisms in the Australian tax system which relate to the arts - some which assist and some which do not.

Briefly, the major observations are:

• Employee-artists are subject to similar rules as those that apply to other Australian employees.

• For business-artists: a) If trading as a sole trader (contractor), the business-artist may be deemed an ‘employee’ for Superannuation Guarantee purposes. This assists business-artists to accumulate superannuation savings for their retirement. b) To smooth out income fluctuations, there is the ability to average income in a year when there is above-average professional income. c) They could be regarded as a ‘small business’, and thereby access a number of tax concessions, such as small business capital gains tax (CGT) concessions. d) Rules can quarantine artistic tax losses, so the losses cannot offset other income, such as part-time wages. There is a carve-out for some artists if their non-artist income is less than $40,000 per annum. e) Rules can attribute personal service artistic income directly to artists even though a business structure (such as ‘company’) has been interposed between artists and their clients.

• For Art Bodies: a) The constitution of the Art Body may enable it to be exempt from income tax. b) The Art Body may be eligible to register as a Deductible Gift Recipient (DGR). Status, as a DGR means that donations to the Art Body may be tax deductible for taxpayers. c) If the Art Body is not exempt from income tax, then its tax treatment will depend on the business form utilised.

• For Individuals (alive) the tax treatment of their contributions to the arts vary: a) Donations of cash or property to non-DGRs would normally not be deductible for taxpayers. However, this can be altered if the individual donates through an intermediary DGR (such as the Australian Business Arts Foundation), which then can forward the contribution to a non-DGR. Donations through an intermediary DGR will be tax deductible for the taxpayer. b) The ‘net inflated amount’ may be tax deductible when there is a minor benefit received in return for donations to DGRs, such as charity dinners and charity auctions. c) Deductions for cultural goods are available for donations to certain cultural institutions. d) Deductions for donations to DGRs of other non-cultural goods and land can be available. However, the taxpayer could have a deemed capital gain for the donation, which may negate the benefit of the tax deduction for the donation. e) Volunteering of time and services (including expenses incurred in doing volunteer work) is unlikely to be tax deductible for volunteers. f) The purchase of art work is likely to be subject to restrictive CGT rules that either limit the cost base or quarantine subsequent capital losses on disposal of the art.

• For Individuals who make testamentary donations, these will normally not be tax deductible unless the donation is of cultural goods (in very limited circumstances).

• For enterprises purchasing or supporting the arts, they may be able to claim a tax deduction for advertising received in connection to the support. However, such a deduction could be denied or reduced if the purchase includes ‘entertainment’.

• Individuals can set up their own DGRs by creating a Prescribed Private Fund (PPF), a non-profit trust which itself contributes to other DGRs which may include Art Bodies.

• New film tax offset incentives have been introduced which replace the prior deduction system.

After providing an overview of the Australian tax system, this Report analyses the tax treatment of Artists, Art Bodies and Contributors. The Report also canvasses the new tax offset concessions for the film industry, and then outlines some concluding observations about potential reforms that will be further developed in Report #4.

Australia, tax, art, art industry, tax treatment

Abstract:
This 2nd Report is an international comparative study of the tax concessions provided to the arts in a number of selected jurisdictions. Given the prominence of its level of giving, the United States of America (United States) is one of the studied jurisdictions, as well as the United Kingdom, Canada and Ireland. Reference is also made to concessions provided for in Germany, the Netherlands, Mexico, Japan and Singapore. This is the 2nd Report commissioned by Arts Queensland and builds upon the 1st Report which outlined Australia’s current tax treatment of the arts.

To assist with this analysis, the art sector is divided into three broad categories: artists, art bodies and contributors. Rather than providing a detailed analysis of each jurisdiction’s tax system, this Report focuses on particular tax concessions that have been introduced to assist the arts. The aim is to identify models or mechanisms from these international comparisons that could be informative for Australia. It is important to appreciate that, with any international tax comparison, characteristics unique to a jurisdiction may fundamentally influence the effectiveness of a tax concession. These unique characteristics may relate to features of the tax system overall, or to the jurisdiction’s taxpayers themselves. Where relevant this Report highlights some of these nuances.

Table 1 summarises the tax concessions provided to the arts in the jurisdictions studied, outlining such things as deferred gifts to charities and testamentary gifts. Reference is also given to the current Australian tax treatment, as discussed in the 1st Report.

It is evident from this comparison that jurisdictions around the world implement a number of tax strategies similar to those in Australia. Indeed, a number of strategies recently introduced in Australia, such as Workplace Giving, have their origin overseas. However, there are a number of overseas strategies that are not widely utilised or present in Australia. For example, exempt income for artists, tax credits for artists to reduce tax payable, goods and services tax (GST) concessions for artists or art bodies, transfer of art in lieu of payments of tax and deferred gifts. It is these alternative mechanisms that form the initial focus of this Report as they may be more informative for any future tax reform for Australia’s arts industry.

After providing an overview of the level of giving in various jurisdictions and highlighting some unique features of the jurisdictions studied, this Report analyses the tax treatment of artists, art bodies and contributors in the selected jurisdictions. The Report will consider such tax mechanisms as exempt income for artists, tax credits, GST concessions, transfer of art in lieu, deferred gifts and other concessions. The Report then outlines some concluding observations about potential reforms that will be further developed in Report #4.

Queensland, Tax concessions, art, art industry

Abstract:
This 3rd Report details the results of a survey conducted to ascertain opinions about potential tax reforms to assist the Australian arts sector. Also the survey considered awareness and attitude of participants towards taxation. This is the 3rd Report commissioned by Arts Queensland and builds upon the 1st Report that outlined Australia’s current tax treatment of the arts, and the 2nd Report detailing an international comparative study of the tax concessions provided to the arts in a number of selected jurisdictions.

In terms of accessing tax information, the top three sources for artists are accountants and tax agents, the Australian Tax Office (Tax Office) and a friend or relative. Indeed, for artists earning less than $50,000 in artistic income there is a greater reliance on informal measures to access tax information, and a greater reliance on the Tax Office in obtaining ‘free’ advice via the internet. In contrast, advisors thought that they would be who their clients would initially source tax information from, with little reliance on the Tax Office.

Those artists with greater financial resources accessed tax information more frequently, with a corresponding improved ranking of their skills in complying with their tax obligations. However, advisors ranked their clients’ skills in complying with their tax obligations lower compared to survey participants. Also there was an emphasis by participants on the importance of paying their fair share of tax. It is evident from this survey that a number of the potential tax reforms have greater support, which has resulted in the recommendation to proceed with a number of reforms.

There are a total of 47 recommendations, some suggesting tax reforms, with others outlining more practical strategies to assist the arts. The recommendations include tailoring tax information for artists (in conjunction with the Tax Office), allowing volunteers to claim a tax deduction for expenses incurred in volunteering for an organisation that is a deductible gift recipient (DGR), introducing a tax rebate system to encourage organisations to support local artists and broadening tax incentives to those who leave goods in their will or while alive. The full list of recommended actions is detailed at the end of this summary. The reasoning underlying these recommendations is detailed in sections 6.1 and 6.2 of this report.

Also evident is that a number of reforms are not seen as viable, which has resulted in recommendations that they not be pursued. These non-recommended reforms include artists not having to pay income tax (whether subject to cap or not), reducing the rate of goods and services tax (GST) on artistic supplies and the re-introduction of an estate tax. The full list of reforms not to be pursued is detailed in sections 6.3 to 0 of this report.

The structure of this report is as follows: after providing an overview of the arts sector, the methodology for the survey is provided, followed by the descriptive statistics. Next, the results and discussion are outlined in terms of ‘awareness’, ‘attitude’ and ‘potential tax reforms’. The report then outlines the recommendations, followed by the limitations of the survey and the potential for future research and conclusion.

Queensland, arts, tax, tax reform, art industry. tax survey

Abstract:
In 1998 when the government announced its proposal for a new tax system in its White Paper, Not a New Tax, A New Tax System (ANTS), it perceived there were a lot of inadequacies with the Australian tax system. The emphasis the government put on selling its reforms can be seen in the title of its paper, which tried to reassure Australians of the government’s overall aims.

One of the proposals contained in the White Paper was for the introduction of a new consistent entity regime for the taxing of income and distributions, known as entity taxation. The justifications put forward by the government for this recommendation was to provide simplicity, clarity and fairness, while also addressing techniques highlighted by the High Wealth Individual Taskforce (HWIT).

This paper will examine the concerns that led to the government’s proposals, and what these proposals entailed. The paper will then critique the government’s initial justifications for its proposals by analysing the submissions lodged in response to the government’s Exposure Draft Bill. The paper will then determine whether there was any consistency between the government’s stated policy objectives and the actual application of the proposals. This analysis is important in explaining the government’s lack of success in implementing these reforms, as the government needs to appreciate that there needs to be consistency between its stated objectives and the actual legislation. Otherwise any proposed reforms can be easily discredited and shown to be lacking by comparing the reforms against their stated objectives.

Australia, entity taxation, High Wealth Individual Taskforce, HWIT

Abstract:
With any business investment overseas there are numerous considerations, one of which is whether to conduct via a branch or to create a separate foreign business form. For Australians investing into the United States (the US) there are a number of business forms, extending from corporations, limited liability companies (LLCs), limited liability partnerships (LLPs) to business trusts. Since their inception in the late 1970s, LLCs are growing in popularity in the US. This may be attributed to tax and non-tax reasons.

Recent amendments to Australia’s income tax treatment of LLCs (the Controlled Foreign Corporation (CFC) hybrid amendments) may open the way for Australians to use LLCs when investing into the US. The LLC has been touted by some as providing improved governance compared to corporations, while still providing limited liability for members and separate legal entity status. For Australians, LLCs provide an entity that can circumvent both the US classical tax system applying to corporations and Australia’s own CFC and Foreign Investment Fund (FIF) rules.

This article will initially consider what the US tax treatment of corporations and LLCs is, and the extent of their utilization. The article will then consider what the implications for Australian residents investing into the US through LLCs are, and in particular how the CFC hybrid amendments affect this. It will be argued that while the CFC hybrid amendments are welcomed, there are some concerns with their operation and there continue to be some inconsistencies in treatment between the two jurisdictions. These inconsistencies may inhibit the ability of Australians to take full advantage of investment opportunities in the US.

LLC, S Corporations, Australia, United States, CFC

Abstract:
Currently a comprehensive review is being undertaken of the Australian tax system (the Henry Review). One of the potential reforms to be considered by the Henry Review is a proposal by the Institute of Chartered Accountants Australia and Deloitte for the introduction of a tax transparent company (the ICAA proposal). The ICAA proposal argues that tax transparency applying to closely held corporations and unit trusts will reduce their compliance burden and facilitate an enhanced tax system for micro-enterprises. If the claims made in the ICAA proposal are accurate, it could be contended that a tax transparent company provides a more sustainable tax system for closely held businesses in Australia. While there are arguments that tax transparency does provide for an enhanced method for taxing business forms and their members, there are various concerns about the consequences of following this economic ideal. This article will evaluate the model outlined in the ICAA proposal, and consider whether complexity would be eased through the introduction of tax transparent company. This will be ascertained by considering empirical data about the compliance cost burden of foreign transparent company forms. This analysis will consider the following transparent companies: United States’ S Corporations and limited liability companies (LLC), the United Kingdom’s limited liability partnership (LLP) and New Zealand’s Loss Attribution Qualifying Company (LAQC). Through this analysis, a number of areas of concern will be raised in terms of eligibility requirements, the extent of aggregation and loss restriction rules. It will be argued that a sustainable tax system based on transparency for closely held businesses needs careful consideration to ensure that it is fact and not fiction.

sustainable tax, tranparent form, Australia, tax transparency, closely held business

Abstract:
On 19 February 2004 the Government finally introduced its proposed amendment to s 109UB of Div 7A of the Income Tax Assessment Act 1936 (Cth) in response to the Board of Taxation’s recommendations. The Board had recommended amendments to improve the section’s fairness and to address the practice of asset revaluation reserve distributions, circumventing the section’s application. So, does the Government’s amendment successfully address the Board’s concerns, especially since the Government did not adopt the Board’s own proposed solutions? This article will outline the reasons for the Board’s original recommendations and the Government’s response. It will then critically review the amendments, focusing on its application to asset revaluation reserve distributions circumventing Div 7A’s operation.

s 109UB, Div 7A, asset revaluation reserve distributions, discretionary trust

Abstract:
Australia has recently recognised or introduced, to a limited extent, a new business form known as a transparent company. A transparent company provides limited liability to its members and separate legal entity status with flow-through taxation. Australia’s actions have been in response to an increasing global trend that has seen the broad introduction of transparent companies in overseas jurisdictions. For example, the United States has introduced the “S Corporation” and the “limited liability company,” the United Kingdom has introduced the “limited liability partnership,” and New Zealand has introduced the “loss attributing qualifying company.” Why have these overseas jurisdictions introduced their transparent companies and is the reasoning similar in Australia? This article will argue that some of the drivers that caused the introduction of transparent companies overseas are present in Australia and, consequently, there could be a broad introduction of a transparent company. In fact, such an introduction could be imperative for Australia to be competitive in an increasing global economy.

Australia, transparent companies, flow through taxation

Abstract:
One of the potential reforms currently being considered by the Henry Review is a proposal by the Institute of Chartered Accountants in Australia (ICAA) and Deloitte for the introduction of a tax transparent company (ICAA proposal). This proposal argues that tax transparency applying to closely held corporations and unit trusts would provide an enhanced tax system for micro-enterprises in Australia. While there are arguments that tax transparency does provide for an enhanced method for taxing business forms and their members, there are concerns about the consequences of following this economic ideal. This article will evaluate the model outlined in the ICAA proposal, and discuss what will be achieved if a transparent company is introduced in Australia. A number of alternative models will also be considered. Through this analysis it will be argued that a partial loss transparent company is the preferred model to achieve transparency, given the existing tax regime in Australia.

tax transparent company, Henry Review, closely held corporations, unit trusts, business forms

Abstract:
In Australia there has been a growing recognition of, or enacting for, a new business form known as a transparent company. The transparent company, having its origins overseas, has corporate characteristics of a separate legal entity and limited liability for members, yet is subject to flow-through taxation like a general partnership. That is, for tax purposes, the income or losses of the transparent company are directly allocated to members. Australia’s transparent company recognition has been stated as necessary to ensure that the tax system is not adversely affecting Australians investing overseas in these transparent companies. Legislation that introduced a venture capital transparent company has been stated as necessary to ensure that Australia achieves an internationally competitive framework and to stimulate economic growth.

Australia, transparent companies, flow-through taxation, venture capital

Abstract:
The possible repeal of the Loss Attributing Qualifying Company (LAQC) regime in New Zealand has been raised again. This most recent announcement was canvassed in the discussion document concerning the introduction of a new limited partnership with tax transparency to facilitate venture capital investment. While the repeal of the LAQC regime has not eventuated, this article will argue that the rules for LAQC members utilising allocated losses are inadequate. This means that the LAQCs could compromise the integrity of the New Zealand tax base. Indeed, it will be argued that the loss restriction rules for the new limited partnerships are also inadequate. For both types of tax transparent companies, this article argues for the introduction of a broad loss restriction rule limiting the utilisation of allocated losses to a member’s financial exposure amount. Also, important differences in the governance regimes between the two transparent companies are identified to support the continued availability of LAQCs.

New Zealand, Loss Attributing Qualifying Company, LAQC, limited partnership, tax transparency, venture captial, loss restriction rules

Abstract:
It is the present practice that asset revaluation reserve distributions by trustees of discretionary trusts are not taxed in Australia. Are such distributions not meant to be taxed, or have relevant sections in the income tax assessment acts been overlooked? This article will review how trustees of discretionary trusts perform asset revaluation reserve distributions, and then raises the possibility that challenges the current accepted view that they can be distributed tax free to discretionary beneficiaries by analysing relevant CGT events, which the authors regard as forgotten events. It will be submitted that a discretionary beneficiary in receipt of an asset revaluation reserve distribution may have a capital gain which is required to be included in its assessable income. This liability for tax is regardless of the Government’s recent introduction of section 109XA to address the practice of asset revaluation reserve distributions by-passing Division 7A’s operation with such distributions.

asset revaluation reserves distributions, discrectionary trusts, capital gains

Abstract:
Success in a modern world requires more than just technical skills, with employers requiring graduates with arange of skills which can be critical for job performance and career advancement (Cohen, 1999; Tucker & McCarthy, 2001). An important graduate attribute is good communication skills (Usoff & Feldmann, 1998), with self confidence a key in its development (Reinsch & Shelby, 1996). The literature also demonstrates that the use of professionals and industry representatives can enhance students’ confidence and their self-belief (Subramaniam & Freudenberg, 2007). It is on the basis of these findings that a full day Student-Industry Conference involving first to third year students in a number of related undergraduate financial planning courses was developed. The conference provided opportunities for these students to come together and present research papers that they had worked on in their courses. These student presentations were attended by not only other students, but also industry representatives who were involved in the assessment process.

Furthermore, students had the opportunity to listen to a number of relevant industry speakers on current topics and research in the field. This also included discussions about the overall direction of the industry and the graduate recruitment process. Through this and other mechanisms, the Student-Industry Conference was designed to allow for the improvement of students’ selfefficacy through mastery, modelling and verbal persuasion. This paper details the empirical evidence as to whether students’ participation in this Student-Industry Conference improved their self-efficacy, particularly in terms of their communication skills. Data from a questionnaire of participating students indicates that the students perceived greater self-efficacy as a result of this initiative. With such improved self-efficacy students may be able to enhance their careers in the future.

self-efficacy, student conference, university teaching

Abstract:
This study provides empirical evidence of the effect of a simulated work integrated learning (WIL) program on students’ self‐efficacy within an accounting context. An Accounting WIL Program was designed as a two‐staged module using information seminars, networking sessions and in‐depth workshops that helped develop final year accounting students’ understanding of the accounting profession as well as some basic skills expected of a new recruit. Data from a questionnaire survey of 35 participant students indicates that the students perceived greater self‐efficacy upon completion of the WIL program, and that male students appeared to show greater self‐efficacy for selected items.

work integrated learning, WIL, self-efficacy, accounting

Abstract:
In 1992, New Zealand adopted 2 hybrid entities for taxation purposes, known as Qualifying Companies, and Loss Attribution Qualifying Companies. It was stated that these entities would provide members with limited liability, but would be taxed in a similar manner to partnerships. New Zealand's Qualifying Companies and Loss Attribution Qualifying Companies regimes are analyzed to ascertain whether these regimes have been successful in achieving their original objectives. While there are continued statements that QCs, and especially LAQCs, are taxed effectively as general partnerships, it has been demonstrated that there are a number of inconsistencies. The existence of such inconsistencies infringes the principle of neutrality in the tax system. These inconsistencies include the treatment of part year losses, foreign income, liability for penalties, nonresident members and restrictions on eligibility requirements. The New Zealand government should consider the implications of the QC and LAQC regimes not meeting their objectives.

New Zealand, qualifying company, loss attribution qualifying company, QC, LAQC,

Abstract:
This article will analyse whether an asset revaluation reserve distribution made by a trustee of a discretionary trust could be regarded as ordinary income for the receiving beneficiary. This is important as normally only the capital gains tax treatment is considered, with the resultant conclusion that such a distribution is not assessable. Through this article’s analysis, the accepted position that asset revaluation reserve distribution has no adverse income tax consequences for a beneficiary of a discretionary trust will be challenged. In particular, it will be submitted that the receipt of such a distribution by a discretionary beneficiary could be assessable as ordinary income.

The article will initially consider whether an asset revaluation is ordinary income for the trust estate itself. Then the conduit theory’s application to asset revaluation reserve distributions by trustees of discretionary trusts will be considered. Following this analysis, the article will consider whether the receipt of an asset revaluation reserve distribution is ordinary income for the beneficiary of a discretionary trust.

asset revaluation, reserve, distribution, trust

Abstract:
In order to address criticisms about the extraordinary complexity of the Australian income tax system, the Federal Government embarked on an ambitious mission in the mid-1990s to simplify the income tax legislation. Part of this response was the creation of the Tax Law Improvement Project (‘TLIP’) taskforce to rewrite the Income Tax Assessment Act 1936 (‘the 1936 Act’) into plain English. The rewrite project was to have been accorded priority until its ultimate completion; however, in 1998 there was a major diversion of resources away from the income tax act’s rewrite in orderto implement the new Tax Reform measures. This resulted in the rewrite project being set aside and left incomplete; yet, new provisions have continued to be inserted into the Income Tax Assessment Act 1997 (‘the 1997 Act’).

Whilst the mandate of the TLIP taskforce was only to simplify the legislation through improving readability without effecting any major policy changes, it is nonetheless submitted that the project still made a valuable contribution to the process of income tax simplification by devising a set of drafting techniques that improve the readability of tax legislation. Readability is linked to improved taxpayer compliance by increasing the capacity and willingness of taxpayers to comply with tax laws through reducing the compliance costs necessary to understand and work with the legislation.

This paper examines whether the TLIP drafting principles are still being applied when new legislative tax provisions are drafted. This examination is desirable because considerable resources have already been invested into developing this arguably successful method of drafting simpler tax legislation. If this is the case these drafting principles should continue to be applied to new tax legislation in order to achievemore readable tax legislation, which is linked to reduced compliance costs and increased compliance. The results of this study will indicate that the TLIP drafting principles are being applied to the new legislative provisions studied, and that the resulting readability is of an arguably acceptable standard for professional users.

However, the readability of supporting material such as public rulings was found to be more difficult overall than legislation. Given that the supporting material is intended to aid the understanding of the legislative provisions, this finding is of concern; although it may be that the difficulties in synthesising the application of the law to factual scenarios, as well as the need to protect taxpayer privacy are the main causes for this phenomenon.

Tax Law Improvement Project, TLIP, rewrite project, readability, drafting , tax legislation

Abstract:
It has been argued that the Australian government prefers an entity tax approach for business forms providing member(s) with limited liability and separate entity status. This contrasts a number of foreign jurisdictions that have provided tax transparency to such business forms (‘tax transparent companies’), with income and/or losses directly allocated to members for tax purposes. Examples of foreign tax transparent companies include S Corporations and Limited Liability Companies in the United States, Limited Liability Partnerships in the United Kingdom; and Loss Attributing Qualifying Companies and new limited partnerships in New Zealand. A reason for the Australian government’s preference is that unfettered access to tax losses by limited members could distort investments. Nevertheless, recently the Australian government provided restricted tax transparency for Incorporated Limited Partnerships used for venture capital investments (‘venture capital ILPs’) and controlled foreign hybrid companies (‘CFC hybrids’). To address distortion concerns there are restrictions applying to allocated losses through these Australian transparent companies. However, are these restrictions adequate? This article considers whether the loss restriction rules applying to venture capital ILPs and CFC hybrids are adequate by comparing them to rules utilised in foreign jurisdictions with a history of transparent companies. This article will conclude by considering whether sufficient ‘losses are lost’ to justify broadening the availability of tax transparency in Australia.

loss restriction rules, Australia, tax transparent companies

Abstract:
The skills required by a student to excel both academically and in their chosen professional careers have been identified by many institutions, and can be referred to as ‘generic capabilities’. These generic capabilities can extend from interpersonal skills, problem solving, oral communication and career skills. In recent years concerns have been raised about a gap emerging between graduate attributes developed in university degrees and what industry requires (Yap, 1997; Albrecht and Sack, 2000; Kavanagh and Drennen, 2008). This is often referred to as a lack of ‘employment readiness’ of students and the need to engage industry with students and the curriculum. Such a concern was highlighted in the 2007 report titled ‘Graduate Employability Skills’ prepared for the Business, Industry and Higher Education Collaboration Council. One of the generic skills of concern is career skills, which relates to knowledge of the relevant profession, the ability to interact with the profession and seek a career.

To address this concern a Professional Development Program (the PD Program) was developed. The PD Program is integrated into a Business Degree and is designed to systematically develop students’ learning, employment and generic skills and supplements their theoretical studies. It is argued that this integration of the PD Program permeating the Degree enhances students’ generic capabilities, including their career skills.

This paper details the procedures that have been developed, and provides preliminary evidence that the PD Program has, from the perspective of students, made a substantial contribution to the building of a ‘professional’. In particular, we argue that integrating professional skills and awareness systematically into an undergraduate degree in partnership with industry has developed students’ generic capabilities, improved their employment readiness and provided students with a greater understanding of their future profession.

Professional Identity, WIL, graduate attributes