A new ruling has been released by the ATO on the deductibility or otherwise of “penalty interest”. The term penalty interest refers to an amount payable by a borrower under a loan agreement when the lender agrees to an early repayment of a loan. The amount payable is commonly calculated by reference to the number of months of interest payments that would have been received but for the early payment. The ATO ruling stresses that the deductibility or otherwise of penalty interest needs to be determined based on case-by-case circumstances. Another consideration the ATO also emphasises is that different provisions

When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income. If an expense relates to both work and personal use, the ATO will expect that you apportion use on a reasonable basis and only claim the work-related portion. Read more about how record-keeping rules differ by expense.

Operators in some Australian industries as well as select government entities are required by the ATO to lodge a taxable payments annual report (TPAR). Learn more about the industries required to lodge these reports, as well as what needs to be reported, the periods covered and the due dates that are required.

The ATO says it recognises that most trusts are used appropriately and for legitimate purposes – but the use of trusts for purposes other than genuine business and family dealings has attracted the ATO’s attention. Learn what the ATO’s Tax Avoidance Taskforce looks for.

Tax invoices are an essential element of Australia’s taxation system, and serve both to collect taxation revenue related to the goods and services on which GST is levied as well as record the credits that are claimable by eligible businesses.

The ATO can issue public rulings that provide guidance on the interpretation of various tax laws.

Being a director of a company, as with any elevation of status, is a role that also brings with it added responsibilities and duties.