Tax planning

There are many ways in which entities can defer income, maximise deductions and take advantage of other tax planning initiatives to manage their taxable incomes. Taxpayers should be aware that in order to maximise these opportunities, they need to start the year-end tax planning process early. Of course, those undertaking tax planning should be cognisant of the potential application of Pt IVA and any other anti-avoidance provisions. However, if done correctly, tax planning can provide a number of tax savings for entities.

• NOTE: The Government has proposed amendments to Pt IVA of the Income Tax Assessment Act 1936 (ITAA 1936) to ensure its effective operation as the income tax general anti-avoidance provision. (See Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 – still before the House of Representatives at the time of writing.)

Common tax planning techniques include deferring the derivation of assessable income and bringing forward deductions. It is equally important that consideration be given to any pending changes to the tax legislation, especially when a proposed amendment will be backdated.