Tax Avoidance
TAX AVOIDANCE
-By Ramesh Badhri Narayan(12741880)
Vijayakumar Muniyandi (12741572) Punjabi Nikhil Prakash (12744129) LIM QI CHONG (12782025) Koundompalayam Jagannathan Meignanam(12742198)
1.0 Tax Avoidance:-
An Arrangement where the intention is to avoid or defer tax obligations. Various means of approach- from mass marketed (advertised to general public) to specialist financial arrangements offered directly to investors.
Certain Schemes can be camouflaged as legal financial products but are In actuality illegal. There are certain factors which one should consider before getting into an arrangement such as Offering Zero Risk Guarantees, No Product disclosure or prospectus, Referring to only specifics of the arrangement, Asking to maintain secrecy (Investigating Tax effective arrangements, June).
1.1 Identifying the Structure of the Arrangement:- The tax avoidance schemes can be identified by various structures such as : Deferring Income, Not declaring Income, Changing the nature of income, Changing private expenses into business expenses Creating an entitlement to tax offset, Set up specific arrangements to obtain tax benefits, Artificial inflation or deduction, Moving taxable income to tax exempted (say charities etc.,) account.
2.0 Tax Avoidance in Australia:-
2.1 Common Type(Mass Marketed to Individuals):-
Mortgage Management Plans:- Creating deductible interest payments equal to home loan interests. Illegal Early release of Super Schemes:- Releasing your super to Self managed fund( has recorded 30% loss as an outcome)
MIS in Primary Industries:- Managed Investment schemes in primary sectors such as agriculture. Home Loan Unit Trust management:- Making home loan interests deductible. Inflated deduction by donations:- Getting tax benefits for a projected amount that you have actually not donated.
2.2 Specialized Arrangements:- 1. Using Hybrid Trusts - Increasing Tax deductions by way of Trusts 2. Retail Financial
-By Ramesh Badhri Narayan(12741880)
Vijayakumar Muniyandi (12741572) Punjabi Nikhil Prakash (12744129) LIM QI CHONG (12782025) Koundompalayam Jagannathan Meignanam(12742198)
1.0 Tax Avoidance:-
An Arrangement where the intention is to avoid or defer tax obligations. Various means of approach- from mass marketed (advertised to general public) to specialist financial arrangements offered directly to investors.
Certain Schemes can be camouflaged as legal financial products but are In actuality illegal. There are certain factors which one should consider before getting into an arrangement such as Offering Zero Risk Guarantees, No Product disclosure or prospectus, Referring to only specifics of the arrangement, Asking to maintain secrecy (Investigating Tax effective arrangements, June).
1.1 Identifying the Structure of the Arrangement:- The tax avoidance schemes can be identified by various structures such as : Deferring Income, Not declaring Income, Changing the nature of income, Changing private expenses into business expenses Creating an entitlement to tax offset, Set up specific arrangements to obtain tax benefits, Artificial inflation or deduction, Moving taxable income to tax exempted (say charities etc.,) account.
2.0 Tax Avoidance in Australia:-
2.1 Common Type(Mass Marketed to Individuals):-
Mortgage Management Plans:- Creating deductible interest payments equal to home loan interests. Illegal Early release of Super Schemes:- Releasing your super to Self managed fund( has recorded 30% loss as an outcome)
MIS in Primary Industries:- Managed Investment schemes in primary sectors such as agriculture. Home Loan Unit Trust management:- Making home loan interests deductible. Inflated deduction by donations:- Getting tax benefits for a projected amount that you have actually not donated.
2.2 Specialized Arrangements:- 1. Using Hybrid Trusts - Increasing Tax deductions by way of Trusts 2. Retail Financial
References: - Investigating Tax effective arrangements. (June, 2012). Retrieved December 2012, from Australian Taxation Office: http://www.ato.gov.au/atp/content.aspx?doc=/content/00268505.htm&pc=001/008/002/016/001&mnu=52910&mfp=001/008&st=&cy= Rangaprasad, P. (2012, March). A Setback in Fighting Tax Avoidance in India: Vodafone vs. Union of India. Retrieved December 2012, from Financial Integrity and Economic Development: http://www.financialtaskforce.org/2012/03/09/a-setback-in-fighting-tax-avoidance-in-india-vodafone-vs-union-of-india/ Rau, A., & Ghosal, P. (n.d.). Entering the Tiger’s Den: Foreign Investment in India Through Mauritius or Singapore. Retrieved December 2012, from Law Gazette: http://www.lawgazette.com.sg/2012-02/330.htm V, U. (2012, September). Scheme of Arrangement & Tax Authorities: The Vodafone Essar Case. Retrieved December 2012, from Indiacorp Law: http://indiacorplaw.blogspot.sg/2012/09/scheme-of-arrangement-tax-authorities.html