It was day 3 of CPA congress, but technically Day 2 for the taxabull team. Here’s a summary of how it panned out:
Tax Reform
We were excited to see the one and ONLY tax session at the CPA Congress. As we arrived, the session was completely full, save for the first row!
Bob Deutsch spoke about tax reform and his recommendations for improving the tax system. Bob is a recognised expert amongst tax professionals. He is also one of the co-authors of The Australian Tax Handbook, a publication that we use! So we were very interested to hear from him.
The tax reforms he discussed were:
- Tax Rate: Moving the personal rate closer to the company tax rate
- Capital gains Tax: Having a $5,000 CGT free threshold, which already occurs in the UK. The possibility of removing the princpal place of residence, very unlikely in his opinion
- Imputation credits: He spoke about the different systems in the US and in Singapore. The position he advocated was a single tier system, which is what they have in Singapore.
Bob described how he would implement a new tax system called “Simplified Tax System” and how it would work and it generated some debate amongst the audience in question time.
As someone that has written a tax paper on franking credits, we found it most fascinating (ok, we admit we’re tax nerds!). We actually felt like we were back at university attending a Master of Tax lecture!
Transfer pricing
We heard from Fiona Craig and Brendan Burgess of Deloitte on transfer pricing. Transfer pricing refers to the cross border dealings between related parties and the documentation required. Half the discussion was about ATO current topics and how it selects cases for review, and the second half was technical updates.
It uses a risk matrix and targets those for audit with higher risk, such as Pt IVA issues (tax avoidance) or where red flags are raised such as large losses. We must admit the first half of it we found to be boring.
The presenters changed, and Brendan spoke about the technical updates. We actually found the second half a lot more interesting as transfer pricing turns out to be a mix of economics, policy, law and international relations. There were Asia Pacific updates on two of our largest trading partners: India and China. If you want to read more about China, please read our China Business Overview.
He also spoke about how to manage transfer pricing in a downturn. The ATO position is becoming a lot more aggressive and reviewing pre GFC years, where there is a risk to the tax revenue. We were presented with different options for managing compliance risk from global documentation reporting to advanced pricing agreements. There is a correlation between risk/volume of transactions and the need for transfer pricing documentation.
We know that our tax audience will be interested in the above two tax sections, and we’ll provide a more detailed write up of it shortly.
Mastering the pommel horse
At lunch, we were entertained, inspired and wowed by Brendan Dowrick, Olympic Gymnast. He showed us how he mastered the 4 steps of the Pommel Horse and what motivated him. There were embarrassing moments of his career and how he managed to turn that adversity around. To go from a disastrous debut of his international career to winning the Commonwealth Gold Medal at age 19 was truly amazing.
He then asked for a volunteer from the crowd to have a go at the pommel horse doing some basic exercises. The exercise was to go completely around the horse with two hands. We considered it but chickened out like the rest of the crowd! So Brendan voluntereed Ron Switzer, CPA Australia’s NSW Division General Manager. Now Ron looks about 60 and clearly hadn’t ever attempted the pommel horse in his life. With the full support and cheering of the crowd, he was complete the exercise and stayed on there for an extra 20 seconds! We’re glad he did it not us!
There is definitely a deep connection between sports and business, and we have seen that in the lunch time sessions over the past two days. It is very inspirational to see how athletes dig deep into their internal reservoirs of self motivation. They are able to perform high pressure with millions of people watching them. Another key concept that Brendan spoke about was marrying together talent and motivation, something which organisations can learn from.
For more information
Please see our Part 2 of Day 3 for the sessions we attended on leadership. We also wrote a separate post on the session Winning Friends and Influencing People.
You can also read the CPA blog for their take on Day 3.
The Taxabull team is attending the CPA Congress as a guest of CPA Australia.
You can follow us on twitter: twitter.com/austax
Cheers,
Taxabull team
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