Tax Yak Episode 38: Crossing borders with COVID19

Automatic TRANSCRIPT

And Welcome to Texas yet. Poor caste we love yacking about tax. So we've invited a range of tax experts and practitioners to have a chat with us. We hope you enjoy SIPA side of Tex- yet I'm Robin Jacobsson. A senior tech's training with tech SPANTA and you'll host of today's podcast. I'm joined by a guest that we've had on the show previously in fact cheeks that we've had recently Masha Lane dong-gook and L. News. Both of Anderson from San Francisco in the United States. Masher is a director of private client services international at Anderson and international tax lawyer who provides cross border tax advisory tax compliance and controversy services. The high net worth individuals businesses and US citizens living abroad. I'll is managing director Amazon and specializes in Tex- reporting for Multi National Public and private corporations. As eight seven forty and uncertain tax positions transfer pricing compliance and planning and by. Masha at Alderney eventually from San Francisco in the US. So hello over there robin evening. Good evening from San Francisco again. Yeah and a real cross-border webcasts podcasts. Because we're actually physically in San Francisco and not in your studio in Melbourne. What subsequently basically doing a joint podcast here. I'm going to be sharing with audiences and I believe you're going to sharing me with yours. Yes so what? I'd like to introduce you to our audience. Hello everybody while come to the tax banter extension in San Francisco we are joined by the host of Tex. Bantu herself Miss Robin Jacobsson. She is very well known in trading circles in Australia. She's been a professional tax trainer for twenty three years a regular conference Webinar presenter and she's had nearly thirty years experience in accounting profession. She has a very big huge public practice background. She is as she mentioned. We coordinate previously in Melbourne. She's there right now And she continues to be very active and be very prolific in all of her a social media. Postings even though. We've all been quarantined for a few weeks now she privates training to pact's banding. No there's she has a lot of acronyms to her the name but she's a chartered accountant in Australia New Zealand as CPA Australia. She's a charter. Tax Adviser for the Tax Institute and a registered tax agent. My goodness Robin and then on top of that. She is also member in an of a number of committees in attacks institute and CPA Australia. She regularly consults with the Treasury. The Australian tax office and the professional bodies on technical issues. Robin is an avid advocate. Social media commentator blogger hosted tax banters popular podcast tax Yak and is regularly quoted in the media and last but not the lease in two thousand. Nineteen Robin was featured in the Australia. Qantas Future stinker series. Just in case you think your voice sounds familiar. Maybe or maybe you see probably read about her on Qantas and You know she was recognizing the women in finance twenty nineteen as the winner of thought leader of the year and has recently been named in the global top fifty women accounting to one thousand nine hundred. Whoa wow robin truly. This is an epic epic podcast. Thank you is your podcast. Hopefully the voices don't overlap too much. It's difficult we're we're we're doing this across the Pacific Ocean but what I'm really excited about. Is that way can compare nights your countries in this amazing group of discardable pandemic as is a strata. And I thought it would be a great idea if we had a chat about what is happening in your country and what is happening as House and compare nights. Yeah looking forward to. We'll combine them. Let's get on with us because when we were there in Australian February I think the corona virus was just starting as far as awareness of it when we were getting into the airport. How has what's what's the status of the corona virus pandemic over in your country Robin in Australia right now? Look we'll give you some dash but I just want to give your listeners. A bit of context as to the size of a strategy. Because they have run over. There knows where we are. The population is about twenty five million. Now Twenty Five. Twenty six million colour So bear about fifteen times smaller than the US population just to give a a bit of context. It's very I'm looking at current data from the Department of Health and that says all of this morning we have six thousand and fifty two cases of people who've tested positive for cocaine and we have now fifty deaths now. I think that's probably going to be dwarfed by your figures. Yeah Well Robin is you know the. Us is a pretty big country. I mean we've got you know so many states in so many different territories and regions but we are As April five twenty twenty. Where about three hundred thirty million people strong and as of today? April eight based on the CDC website a total cases of cove nineteen reported or three hundred ninety. Five thousand in eleven and total deaths are at twelve thousand seven hundred fifty four and e although it does appear as the coup bid a briefing today that you know the social distancing measures undertaken by the government are working or still having a. We're still going through a big surge or by the number of cases every day in different states are just phenomenal. I mean in California. We've had we've got eight hundred cases a day in New York. We've got eleven thousand cases a day and you know in Philadelphia Fourteen hundred cases of day. So you know it's definitely. We're not far from the tunnel right at the end of the tunnel. Here what about yours? Where are you in the weather? It's a U or a W or a bell as they say when they're projecting this is the shape of the pandemic with the over there. Look there is talk that we are starting to maybe flesh natia beach. And certainly that doesn't mean that out social distinguishes guide to relate and I could mention is in my meant just on some rough numbers if your population is about fish in times the size of ours acted our rights of Being diagnosis anticipate positive. Kite Montaigne and the number I would place the figures that about seventy nine to eighty thousand testing positive in the US using our ratios and about six hundred and sixty deaths. But you are so far ahead of that. So I just wanted to ask you why is the US much worse? It's not just a case you've got more people than us because I've just taken that into account in my numbers here. Yeah well you know. I think that's still a that remains to be seen. Why we're so much worse off than everybody but you know I think it we we. We hit really fast and we have a lot of dense populations. New York City in particular is very very dense. I mean think Robin you mentioned you. Were supposed to come here in. May Do Pencil now. Yeah I mean literally bodies our top of each other in terms in terms of you know density and maybe Al has a thought or two. As to why we're our numbers are so high you know the nation didn't act as one to lock down and it's it's really interesting. It's it's almost scary when you look at some of the mobile phone data. For example they show folks were attending spring break in the Florida beaches. And the data's anonymous but the anonymous but they go home and they went home to New York. It went onto Michigan. They went home to all these places and so unfortunately you know it. Got The best of everyone for folks. Took it seriously here but I tell you now you cannot find a grocery store in San Francisco that does not have blue tape every six feet on the sidewalk outside. So that folks can practice safe social distancing understand so in a strategy we've got different measures which federal and state based saw. The states are basically running their own show at the mountains of the social distancing. But we've also if a lie about the federal government is telling us if we have to go outside not at work and not with family members. It's limited to two people together at a time. So we mixing Grapes of more than two people and this was originally fifty. And then it'd be one hundred and then they dropped it down and drop down but now too so you conquer socializing with your friends at the moment in a family context call so you've got a family of five people than Sei K. You're allowed to work but it's really saying you leave your house if you need to buy food or supplies fuel harm if you've got a medical appointment over exercise that's about. Yeah that's pretty much like us to but I don't think we're limited to two. I think we are supposed to be before we had some numbers. If I remember you're allowed to have more than one hundred fifty people in a function and then that started whittling down and now I'm not even sure if we're allowed with for two because our rule is everyone has to be within six feet of each other at least and now we need to have a gas mask and all that stuff so you're GonNa have mandatory mosques now What's been recommended yet? But you know it's not being followed right now. I just went. I'm looking outside and not. Everybody has a gas mask or even like Not a gas mask but a What the whole cloth covering Because you know we wanna make sure we have enough of those very important masks for healthcare workers but the economic impact has been absolutely decimating businesses. Because we've had mandatory shutdown of sitting businesses liked petitions ristorante Sambas and pumps. Kfi In you can still save takeaway. But you can't have anyone seasons dining so some businesses have been forced to shush others chasing too so cost. The retail sector major department. Store Meier has caused a little bit Stolz. So there's still a lot of online shopping available of course but simony of the stores have chosen to In that I haven't been in order to. Yeah well that's the same here. I mean we have. Also you know the beautician. Stores are down. I mean the nail salons are gone and we have every we were joking the other day that you know everyone's out hair as four inches. Now you know account any hairy gray haired women are going to be working around the world that extreme emerge from this quarantine. All going to be like is that you and then we're going to need. Caribbean restaurants are also in. No the the restaurant industry has been hit really hard and now it's only now there were having you know restaurants during takeouts and you know we have some food trucks. That are going around. But then it's a totally know contacting you order ahead and you pick it up and you know we've got power bars are closed. And our gyms robin are gems are gone. So you know People have to do this. Social distance saying one. They're doing their exercise too. And we've got a lot of parks but lately the last two weekends there's been reports are lots of police cars going around monitoring because everyone's going to the park now to get their you know their exercise. It's hard in a very densely populated city like San Francisco population. As I mean I'm out you are population in SF alone. It's about eight hundred and thirty thousand in one of the more interesting things with everybody off the streets. The animals are coming back at night so it started off coming out of the city on the various parks and now there's reports of mountain minds that are string down you know because there's no one out then they go to where the easy food is up. Yeah and smog and everything else. So people are seeing stars to share a story with you that I had. I deal with a fellow. Who's a an advisory in Dubai and the UAE? And he was telling me about a story where family had listed. Ya on a holiday. A brief holiday and I believe starting patriots. The what had happened was troubled across to a mom and didn't have my boyfriend coverage although were there and so the UA in the meantime head closets borders and they went to wear this so they lift him on to drive back into the Ya and there is apparently about a two hundred major cowpox that sits between the two countries borders so that exit the UA sitting in this cowpox and then went to into the UAE. And the said you can't come in so they did a u-turn wetback to a man who says you can't come back in either stuck on the carport is stuck in the cock visit every a five but can't get into the country and I said look I get. They've got shelter. I can be in the combat I said. What are they doing the things I see a movie with Tom? Hanks you couldn't even have someone who accepts the US to bring them fake because then they would be locked out so what they're using a helicopter to drop it down to the extraordinary stories that are coming out of this. Yeah I'm seeing every day you know the the the emails coming from the consulate the US consulate in Sydney talking. About how the borders are being closed for domestic travel between you know newsouth Between a Western Australia you know the northern territories you Queensland has made fun. 'cause it's boats. W is different closed. Its borders Tasmania has basically said unless you go to raise into come in. They basically putting all the sites in lockdown. It's it's fascinating from a logistical perspective. But it's actually extraordinary to think how a whole country's just grinding to a halt at the moment. Yeah and right now. We don't have that here. I think that's a really big difference between are the measures undertaken by your government and hours. I mean we don't have a complete blocking off the borders between the states yet In the social distancing is still you know her? The governor's you know all those recommendations by the Federal Government. I think because under our Constitution the health and safety of the population is really Resides with the states. The states have primary authority in the federals backup but returns like this not federal disaster. You know we have to coordinate. There's still no consensus on the lockdown. Between you know the different states so it's the difference. Yeah I wanted to cover things before we move into much more serious economic stimulus package issues. How's your toilet paper stocks going over there? I think our toilet papers has not been replenished. Robin. I think you go into Costco here. You still have to just get one roll that's it. I can't find paper towels. That's the thing that we can find. There's plenty of toilet paper. Just no paper towels as well now. Yeah How's your worst over there? Have you checked? Look I think people have obviously got probably nine to twelve months worth of toilet paper in their homes now so we're actually starting to say toilet pipe and back on the shows again. It's quite amazing. Folks actually trying to return pallets full of toilet paper. They BOUGHT THE COSTCO. Just at Costco. Refused to take it back so good for the woods. The most serious nice increased numbers of Americans purchasing weapons. Yeah I mean you know a especially in Texas. I think there's an increase. There's a surge in the buying of God's because it's you know stressed out people are starting to you know whenever this happens there tends to be one sector that tends to blame everybody else who looks Asian To be the the bringing the virus over and everything else so you know that's It resulted in a bunch of you. Know hate crimes and a stability and it's just everyone's just on the edge but particularly towards the Asian American community. It is interesting that would varies by geography within the country. So within California. You know a gun. Stores were declared not an essential service in so they are shut down here in California but when you go to some of the more conservative states. They're they're open up and then vice versa. Cali- California Lee. San Francisco's declared the cannabis stores to be a necessary service. So and the liquor stores are still open so but I I would imagine you know. It makes life much easier on the police department with the bread and circuses and yet shutting tampons and Ustralia. That's just sacrilege stopping people getting beer at the pump. My goodness but you know what? I don't think shut down the schools yet. Robin heavy snow down. We haven't and that's being managed on the state by says at the moment as well so we might still reach that point. It's the schools that's killing everybody because when we have conference calls during the day or I speak with a co workers in the evening the ones that are having the hardest time or the ones that have the kids at home and have to deal with. Teachers have a newfound appreciation. I think this whole new not just looking at each other's himes ills as webcasts and webinars and sessions that have been conducted. But we're getting used to the family of the dog or the baby being in the back grabbed coach. Now it's like Oh don't bother. That's just the baby needing a little diaper change bad. It's kind of stressful. Can we compare packages? Now I can share with you. What Australia is doing in terms of what it's giving up. What's the value of the? Us Assistance Package. The economic stimulus. Package will the one that everybody's heard about the PATEX paycheck protection loans. Excuse me That's about three hundred and forty nine billion dollars in that same that companies. That have five hundred or less employees. And it's really a grant program because if you use it for the intended purposes payroll utilities etc. It'll be forgiven after two years but one of the more interesting things one of the things. I'm curious to hear from you as the Fed reserve has watt trillions of dollars of paper. I mean they are keeping the wheels running there. They are making sure that liquidity exists within the market. Because that is the one thing. Everybody's Feinstein at home but if the ATM's don't work people have a tendency to to get nervous. They printing money while they're doing it to quantitative easing so what they're doing is they're taking assets off of banks and in some cases an ETF taking assets off their books so that they can have the liquidity full in folks. WanNa cash out You know it's going to be very interesting. In the next few months just think about the loan servicing industry and it doesn't matter if no one's paying someone's got a loan servicers gotta pay those folks that bought into the mortgages so it's GonNa be very interesting but I think a lot of the The straightforward economic stuff as the more esoteric economics up like that folks aren't focused on They're really focused on. What am I getting my check? Why isn't it here yet? And when is the next check after that arrive you unemployment? I seem is increasing significantly. I think we have over a million people here in California. There were. There's there's about three and a half million people a week applying for unemployment in. That's another area again. Where the geography of the country is is causing. Different results Some of the more conservative states have systems that are meant to be user friendly and some people are literally standing in line with paper in the midst of all of this the Pine Front employment. What's the total value of your package? Because I've had because things runaround of two trillion is that correct Yep I think that's pretty much correct trillions robin. What about your package? Remember much smaller country than yours but the total value of the package today. It's been announced. I two three different stages with hovering around the three hundred and twenty billion dollar mark and just last night the government poss- through a special sitting of parliament's especially recalled them to bring them back to camera bypass the new job. Kepa payment legislation. Now this is the biggest financial package in Australia's history and that package align is one hundred fifty billion dollars which is just massive frustration. What does that have? What does it have a whether the components of it so the premise of the job? Kepa package is that it's a wage subsidy being paid to employees. So if I could use this analogy you've got a solo spin with boiling water sitting on the staff. And when it's boiling it's active and it's up writing and and the economy's great but what they WANNA do is. They've had to shut things down. I thought by fully shutting business like the gymnasiums in the beauticians and the restaurants that just are not allowed to try. All we've got others that have chosen to shutdown or genucel eye business. Look at the airlines. No-one fulsome to shut down but they've been decimated by services because no one's troubling sign with hotels in my tells a whole tourism industry so way you've got a reduction in your tonight but it depends how big if you're ever one billion dollars of ten. Aiba and you've got a shy that you've had a fifty percents reduction in you tune IVA or under one billion dollars. It's a thirty percent reduction and what they're trying to do with this spin on the stove. They don't WanNa turn the gas off and let the water guy called because then it takes a really long time to bring it back to the boil again so they wanting to take down to a Cima Cape warm so that it's really easy to just quickly fired up again and we can get the business running. So that's a very good analogy but king so rapid businesses closing and dismissing staff and laying them off. They sang to these businesses. You might not be operating. You may not have your doors open. You may not be trading which is to be effectively one hundred percent loss of revenue compared to the same time last year. Cape Your employees on the books. And we'll help you do that. I pay you this wage. Subsidy it's at the right of fifteen hundred dollars a fortnight pay eligible employee and the employer can then use that to pass the money onto the employees to keep them with association. Kamal missiles in Sima phase really brand new. Finally we saw some draft rules yesterday. Bravely which actually hit the Treasury website and then I got taken down again so we're waiting for the fine print bash Zuni. That's also going to be taxable to them then or is it. What what is it what? It's effectively replacing wages. So it'll be paid for them. In the form of veterans it'd be subject to techs as for the employer die will pay tax on the subsidy but then they'll get a tax deduction for whatever they pay out to the employees eight site it generally with national for the employer got it. There's a lot of confusion about. How's it going to work? And how do I demonstrate my ten of his dropped in? Who's eligible yet? This stash of March the first period ends Sunday in the middle of Easter as the fastest legislation. You've ever done ought ordinarily we have a lovely measured pace? We have announcements. And then I released discussion papers. And they'll put out exposure draft legislation and then the bills introduced into parliament after all the submissions considered and it's debated and months-old years later it becomes law it any other time. It would be outrageous for being nine draft. Legislation released ahead of bills being tabled in the parliament. But we didn't luxury amendment. The parliament is literally tabling bills. Without us. Seeing them beforehand they are being introduced debated and passed within the one sitting day. So it got introduced to the bout. Tintin's eighty s today morning and it got passed by the parliament at about ten fifty las notch fats incredible. I haven't got an actor today. That and this has happened twice now. So it's remarkable what they can actually do the opposition and the government actually together as they are at the moment. It is remarkable. How quickly beginning these new missiles place which is obviously needed and very sensual right but then again you have to drive the rules the devil's in details right as it is. And I'm one of the details will not pass this to the commissioner of Taxation. And all his stuff now needs to work through those roles consider that position when I exercised discretion what God and so they're going to provide that guidance and make available to the business in the individual community and then as practitioners who just inundated but mine was questions from clients. Not like what you're saying. What am I GONNA get? And how much am I eligible and not? All of these questions can be answered at the miners. While seems like a similar feeling here. Als Be dealing with it a lot commercial practice your Intel we. I wish that we would his quick to act legislatively. Is You guys were? We were a bit slow at least stock market. Thought that the you know that we were a bit slow in acting but it has been an interesting rollout for the loans. I would say it again the devil's in the details and so we've seen almost daily releases from the IRS. The Internal Revenue Service clarifying and expanding the guidance. That's come out on some of these programs and the SP itself has been providing almost daily updates. Faq's on applying for various loan programs. And so it. It's been nice in that the web services etc. I know that some people have had frustrations but in general. It's been a very smooth rollout. Considering all the underwriting changes it has to be Native Small Business Administration Son District tickets at case that they're just had to step up and head to do it in this really efficient manner because we've had no choice in the US here. It rather than trying to start something new. They said what? What funding mechanisms do we have in place that that are fairly strong? And they said for individuals. It's the unemployment system that's how we're GONNA get Or cash into people's hands and for business. It was the small business administration loan program because it was fairly common to have that at all the banks and you know underwriting for banks they can make those changes very quickly And so you know there have been you know. I've heard some clients saying they've had significant issues of others. Said you know we got through the first time. But is we're saying the devil's in the details in a lot of questions about the underwriting process in what's GonNa Happen to folks especially my inbound clients. I have clients that are inbound Australian investment portfolio companies etc. And you know they don't have a tax. Id number to be the person the owner signing the application and the client asked me. What do you think's going to happen? And I said it's like any large organization they're gonNA take the ones that they know are perfect and process them through and you're going to go through another pile and you know the question is what's your relationship with the Bank to get your loan application or through that pile quick the same issue because with this job Kepa payment. They're not gonNA stop paying the employees until early. May So we're GONNA MISS FIVE WEEK GAP. Where the saying pay your staff going. But it's the business hasn't got the cash flow to do that. Then the government is saying to these businesses contact. He Bank and organize some credit three-bedroom financing of. Yeah basically exactly Rajoub retrenching. We also have measures that the government is attended J to provide a flow of credit. They're trying to make banks will willingly lane to their unsecured loan options. That are now in place for up to a quarter of a million dollars and these short-term lines three years Max and it's allowing businesses to go and get some finance and have a six month holiday periods Initially that six months so they're trying to do things to the credit flowing but I'm just sorry at cachefly because ten I for profit as well now me. Canning world is a very different concept to cash flow. I think that when you have the economy basically halt as it is. Now it's GONNA come out. It's going to shake out of wave and I was mentioning earlier it. It's not just the restaurants that we're all noticing now in the grocery stores with the lines out of those industries that have huge liquidity needs suddenly rising such as the mortgage debt served a mortgage loan services. And it has this way. These wave after wave of bad news is going to be falling out. We anticipate there'll be more rounds of of cash own at the economy to keep it moving They're already talking the house here. Which is controlled by the Democrats? More liberal of two parties here is talking about plan number four and I was shocked to hear that the Senate which has the Republicans is open to talking to them So they see the crisis and and and I I really say that's good fortune for us that this is an election year because I think that there's a real incentive to make this go away and to make sure that it runs smoothly. That's another dynamic you've got an old is thank goodness way not an election year but you have no choice. It's built into your constitution. Emba every four years heading straight into it. Yeah we're taking census now. We're getting voter registrations online. I mean it's still. It's I think you know we're still gonNA go full bore on it and it's it is a very. There's lots of dynamics at play when we decided with respect to how. Rana virus Crisis was responded to. I think history will look at it now and say you know how much it was. This was impacted by that. And I think it's probably a big impact long version keys because the social distancing all the way down that line while I have to figure out a way to make everything online now I mean within six six feet of each other. I mean that's got to be incredibly hard to keep people in just. The grocery stores on weekends are filled in lane in the streets and streets are filled with people waiting for the time to get into the grocery. So it's very interesting time. We just had an election yesterday in Wisconsin and the the two parties could not get along and so folks stood outside in the rain in Wisconsin to vote. Yes at a time when you need your immunity ears of rain coacher right so which have become an issue here in Australia. One is the message that the businesses are hearing from. The government isn't necessarily lining up with where we're lending in the legislative framework and I'm interested from the US Steve We've got rules. That are very complex and accredited as eligibility conditions which is fair enough unjustified that sometimes we're saying mismatch between what the businesses a hearing publicly from the government he'd media conferences and win that guided their adviser they actually you'll structured in this particular. Mandatory arrangement is in this particular. Why and so. It's not eligible and this is causing a bit of confusion for business signers because they think they're eligible because that's what the government is telling them and when they say they're advised that they finding out that they did not and I'm just wondering when you create these stimulus measures and handouts and various financial forms of assistance. You will saw. Because he would have eligiblity crash. Here is awfully complicated and people finding but they're not understanding. I went eligible. You know five hundred employees threshold is to be a question. That folks are having great difficulty answering when we're very used to looking at statutory rules that talk about percentage of ownership and you look at the ownership tree trade set up at the top but the Regulations on how you aggregate folks and consider their affiliation. They're really more like IFRS. They're very principles based some of them are very mechanical but the great majority of them are principals space and so our firm and and I think most accounting firms are shying away from that. And they're saying that's practicing law in the US and so we don't want to get involved in helping to answer that threshold question of. How do I count? How many employees do I have? And so I think that's been a bit frustrating but I always tell my staff you know it's your time to shine and so for the Employment Law attorneys out there your time to shine. I'm sure you're booked up from morning til til night. Industries are doing will add this fall others are just being this. Nice it some. It's a nitro fish. Yes yes but but that that's proven to be you know the question that everybody's just struggling to answer Other than that. We're very lucky here. In that they structured the loan program very simply they said basically look at your last twelve months of payroll or last year's payroll certain adjustments to it. You know throw out folks there over a hundred grand at least give him a haircut to get two hundred grand and we'll give you alone for two and a half times that so basically will alone two and a half times your You know your payroll and we'll forgive it when you're done mechanically it was it was done. I think aspect of it has been very straightforward although you would think such a straightforward question is. We were talking earlier. There's been I believe two or three Spa Faq's released the dealt with just how you count payroll difficult without. Yeah Yeah you know and and the problem is is that the politicians get on TV and they say one thing and so you have this diversity of guidance out there and so when the final Faq's come out like for example that the twelve months of payroll do. I count the twelve months for the period of time immediately before I filed the application or last year and there was conflicting guidance and so in the end the Faq says you know what do it either way. That's fine just another she. That's come up in Australia. Is that and this is not surprising. They have built integrity rolls into these new missions. So both in the Job Cape Payment and we've also got another significant measure which is about boosting cachefly from plates so that measure is all about providing up to fifty thousand dollars in the nine hundred and twenty financial year and up to a fair that fifty thousand dollars in the twenty twenty one financial year to basically give employs a critic of the texts that staying on the salaries to their employees. You understand the concept. Of course I pay you a salary. Wage tight taxotere and I paid to the exodus and that the texts that I'm paying to the CIO. They gotta give some of that back to the employees in the form of a credit and debating. KUMBLE's end up. You could end up with the cash. Ray found out that this is based on eligibility criteria. You must have been pre existing and you must be an active business. And you've gotTa have what I call. Vanilla highlands of salaries and wages will direct US face to stop and said that built some integrity measures to stop people. Rearranging fits changing their structures. Doing something for the first time that they would normally do in order to get this cachefly boost or they've changed the timing of something or they've increased the amount of something and so this in a lot of discussion in out proficient about the government's making sure that people understand that antiquity rule and we've had to have reminders from the professional buddies and from the texts office and from the Tax Practitioners Board who regulate all the agents in Australia to save them. Look if you're going into this games we can take these credits back off the employer. We can hit them with interest charges and penalties. If you're a promotion based Games then there's a separate penalty regime that can apply you could face disciplinary action through your professional buddy or from the tax practitioners board and they could even be in the mice degree cases criminal prosecution. Is this whole conversation around. What am I allowed to do and now some partition is getting nervous. That all is GonNa do this. Does that mean it's going to be a red flag and defeat this would be I k. Do you think I'm going to have a problem under the integrity role? So it's a fine balance to work out which side of the line you fall. What you're proposing to do. Yeah fortunately we're not faced with a lot of those choices here because it there's a very clear delineation between some of the legal aspects of it versus. Hey I need a schedule shows. Excellent Y and so We haven't struggled to much of that. But I think bill the the the banks that are underwriting the SBA loans are enjoying Being the policeman in some aspect of this whole process. And that's what caused a great deal of delay of ear and getting the Sba process up and running was banks. Were very worried. About what amount of due diligence? They need to perform over these loan packages even though it was really just something as simple as verifying a payroll calculation. My understanding is that that held up things not tremendously because the banks that wanted in the building the bag also the if you assist here if you assist in preparing the loan application itself you had that has to be disclosed in the BANGS. I believe in some places that I'm not too clear on this. Half the pay some type of fee or share their fee for the loan origination with that person that was assisting in so again. It's a matter of two piles wasn't to get move very quickly in one okay. We'll get to that one when we get to that one and so it has raised some aspects there besides his paycheck. Protection loans are just focused on smaller business. That the you know the administration itself has a huge WANNA say five hundred billion dollars of the loan out to larger companies and You know folks are already saying we don't want any shenanigans with that there's been several of the legislation installs and inspector general over this entire process in already fighting over the administration's released the inspector general was named originally head everything and replaced him with a political appointee. And so now you know the Hijinks will ensues. It's GonNa be really interesting to say I wanted to get through. This phase is they to be any litigation or reviews or adjustments or audits later and the idea is got a a delicate task to undertake here. They certainly still have to protect the revenue out the administrator of the revenue systems but at the same time they he to implement the government sinuous package so they to radically for Revenue Authority. Hand money out to people right and so this tug of war is tension between look. We're here to help you and we want to be compassionate and we don't want to shut down businesses because you'll financially struggling the last thing we gotta do is hit you with extra penalties and interest but at the same time if there is out there that are what they call gaming. The system been going to be any tolerance for that. I thought so. Yeah it's fun balance. There's going to be a lot more gaming. The system when it comes to the end of it bill packages chip for the individual when we get down to the nitty gritty of it. I mean there's more deeming gamesmanship that might be going on to well. Let's turn them on individual side of things. So what are you saying? Individual handouts on international handouts are pretty good. I mean you know we came out very clear on the guidelines. I mean we have on our end. We can get loans from the are qualified. Retirement funds that are related to the covert pandemic Folks can get up to one hundred thousand loans on their 401K's without any penalty. Usually there's an early ten percent penalty if you get these before you know before he retire or if it's not for undue hardship things like that The the pensions that were required to have minimum draws can be deferred now so a lot of the rules around protecting savings and retirement of people have been relaxed to allow for an extra infusion of of money coming to their pockets to take care of this The needs that they have especially the being unemployed laid off. You know and they need extra money or you know 'cause the the reason for the loan can be you know a because you were sick from the disease or or from the virus or you know an economic result of the virus so it catches that both we also have It's funny you said the. Hbo is now in a weird position of having to hand out money. When you know everyone knows the tax man plummet then? We're going to ring that bell and we're going to get your money. Now they're handing out money. I mean I is printing out. You know Sending out refund not re- REFUND CHECKS. We call them rebate checks. You know and Unlike yours I think you've got set fixed. Stimulus payments are rebate. Checks are graduated depending on whether you're single or married whether Amita certain But they do start at twelve hundred dollars up to twenty four hundred dollars for a married couple months pay for much. It's just a one time. I think it's just not one off okay to help you at the income. Thresholds to like if you're above a certain income level than you can't get this rebate check at all okay so yours as a struck differently so we've got three my measures for individuals with what was called a stimulus payment and they're a two seven hundred fifty payments so these one offs but there are two of them now and one in July. And that's going to people who are based on social security so people that are receiving income support payments or the concession card holders at Saute than separately for people who are broadly on recall. Job Sika. Now I talked about job Kepa. Before they're the people who asked to keeping their job job Seca is for the people who are out of work and they currently get a a a payment of about five hundred fifty to lose a full night and diet is going to be doubled with a Coruna virus supplement with another five hundred fifty dollars a foot nice and that will give them eleven hundred match. Well that's a lot more than what we're getting. I think it is. That's a period of time. Not just a one off payment but people have the ability if I may sit in conditions and it's again based on hardship and eve lost jaw boil waking house of come down significantly and it's based on a twenty percent threshold you can access some of you superannuation. Ellie united that. We've got at least you know. We have more very strict rules about accessing sleeper and industry you contacts continue basically right to a preservation agent retired. But we do have had sheep and they've been around for many years. So if someone is in Dos Reis financially by can make application to the government and access up to ten thousand dollars of this super what the government has done in response to the corona virus. Pandemic is they've broadened that criteria temporarily so until the twenty September you'll be able to access up to twenty thousand dollars from you superannuation fund by wave. It's it's two separate ten thousand dollar payments so you can withdraw ten thousand dollars in one thousand nine hundred twenty and you can actually apply for that after year end and you can get ten thousand dollars in twenty twenty one but you must apply for these by the twenty fourth of September. So this is really going to give people up to twenty thousand dollars which might get through the next few months right but you know the modeling and you probably do more of this than I do. If he pulled ten or twenty thousand dollars of you superannuation fund today and you're aged twenty five or thirty five forty five. What's that guy to impact on your balance? How much compounding? You'RE NOT GONNA get the benefit of by taking that money out now and then is quite staggering. You can end up with many tens of thousands or two hundred hundred and fifty thousand dollars. That jewelry sat on at the end by taking that money out now right and super intended to if I recall and correct me. If I'm wrong. But you know supposed to supplement the the old age pension that for your social security And so yeah by accessing that You know money at this time. You're kind of cutting the legs out of the third pillar of the social security system for Australia and you know of course an additional complexity we be if you were also a US citizen and you're in Australian With a super end you are taking the money out because super for tax purposes is not considered to be a qualified retirement. This time it's a foreign pension therefore non-qualified and so any money come out of there would be taxable in the United States in reportable income tax. So that is a cross-border complication. That hasn't been head of you. Know of vetted out yet at this time. I doubt if anyone's going to say hey. I'm not gonNA take this money just because I'm afraid of what I've been a report to the IRS. Because I have to report this money as accessible but at the same time that's kind of kicking the kicking the can down the road because at some point you're going to have to report it in your taxes in the. Us There is really no solution. Right now I should was of Americans who have been working in Australia. Might be here on a temporary resident visa and because of the effective border closures. Globally may have decided. It's like our hinds so they've lift a straight out there for ten to the US. And I'm just wondering people in that situation must have accumulated super bowl. Stay here and I'm just suggesting they might actually be able to access those Super Nazri. This measure it through the departing strata superannuation payment. Oh that's very interesting. That's very interesting point. You raise Robin. That might be something that would they might want to take a look into. But you know I think the report that somewhere on the US tax return. But at least that's additional source of income wrench at this time that you know when you're looking at your because definitely the the loan from our 401K's in our other retirement funds have to be repaid within three years. It's not as if you can loan to yourself and then not pay it back. I mean it's the maximum You'RE NOT GONNA get the ten percent penalty but you still have to pay back The loan that you've gotten out so that is a good extra source that You know lots of people might not be thinking about. And that's why we're having her cross-border discussion of Corona cross-border recall at discussion. We had in las toxic discussion back in February will spend a whole episode talking about residency and exactly and now if threw up in the air and the data is provided some guidance on this because the eight theo done that's amazingly so we could affect shares an a very welcome to dive into their websites. Frequently asked questions on carpet nine but I have raised the issue that people have been displaced so it could be employees working for an employer who are the stock Rbis as they stuck here in concrete back home from overseas. It could be that people are here longer than they. Otherwise may be so they're actually residency. That may come up now. If you're lucky for another manslaughter that shouldn't change any particular outcome. But we know that when you start picking up the one eighty three day threshold. Yes it it starts to change some of the dynamics of the by the rules replied so absolutely they've turned onto this because displaced people can have tax implications. Yes and you know the US. I don't think we've come out. I haven't checked the IRS website today and Faq's but we've got our all enrolls about residency Rolston when it comes to more than displacement for residency. I mean if you have an employee of a US company. That's in Australia. That's been there for more than you know. Emmy and keeps doing work remotely from Australia. Because they can't come home have they created a permanent establishment for that US company and essentially exposed that US company then to potential taxation Australia. Same thing with an Australian company with an Australian employees that stuck here because or stranded Because of the the cove it and I I heard that the UK has issued Some rules on this but the OCD has recently issued guidance on it. But yeah I I don't think Canada has issued anything. But this is this is a reality right. People are stranded and we'll start having residency issues. Alan the episode that I did with you but we talked about corporate residency. We went into a discussion about central management and control of a company. Because this is where a company has its ex-president see status and the has actually issued some guidance because following the decision. We had an Australia. Which was the Ol- to do with the Bible? Distance was a company incorporated overseas and a resident here on a number of board members have been literally jumping on aircraft. Since that decision to make sure the decisions were made in the United States. Like Haitian said that the central management and control could not be said to be in Australia with people unable to travel overseas at the moment. It's closed a question to be asked about. Does that may not companies now by a residence a strange because we can't hold the book meetings and my understanding is the ACO guidance says we're not going to do compliance resources to checking the fact that you're not travelling overseas for aboard aging now means that you're a resident to the strategy so there are all sorts of things that fall out of this right. That sounds like a very wink. Wink nudge nudge solution. That saying I wanted to mention also another package for the individuals that is really very interesting. Specially for cross-border dual citizenship dual citizens that Howard Filing Australian taxes and filing tax returns and somewhere because they have a super they end up paying taxes in the. Us should be tax In Australia but you know we have a cares. Act Relax the rules on a net operating losses and a disaster losses too so you can now carry back net operating losses to up to five years back For those losses that arise in twenty seventeen eighteen nineteen to so there is now an opportunity if you pay taxes in the US Australia. And you've got these losses that you've incurred to amend those returns now as a result of best and go back and possibly get refunds. Which is very interesting of checks using your losses to carry them back home iced as opposed to lost being applied against a future profit. Exactly his we had something similar in Australia for period. Those rules don't exist now but there was certainly the option at one time to be able to apply loss backwards as opposed to carrying full woods. Right and I thought that was very special. A special provisions of our package. Because I didn't see any of the other Any other stuff that I've been reading about how the legislations are being drafted so and we. We certainly are looking forward to that because you now we had a tax reform act in two thousand seventeen which taxed a lot of people globally because of our you know of show is extra territorial regime taxation. We had a one time transition tax that applied a in to a lot of individuals abroad that had foreign corporations and they have to pay tax on earnings deferred. Earnings weren't taxed in foreign corporations. And now you know with this new development. It's possible that you might be able to go back to that year. I carry back this loss and maybe not have to pay any taxes. So that's that's kind of like the possibilities are just opening up to maybe get some money that way although it will take longer it's not as easy as a rebate check but it is or cashing out picking alone against your you know your qualified retirement fund your super but it is another option. If you can kind of stagger where the sources are coming from like Australia. You've got a lot of state based Texas as well and we have payroll tax amongst others that is imposed on business in Australia. And we're seeing a lot of various packages paying off around the country. Every state territory government has now offered payroll tax relief. And it's varying. Sometimes it's a deferral. Sometimes it's a wave. Sometimes it's an exemption. In some cases there's a refund of payroll tax already paid and the thresholds vary in the amounts vary in the conditions vary etc but is there something out of the state governments in the US. That's being offered by some sort of relief. Yeah and I should recap what the Fed is doing because I haven't really gone through that yet. At at the federal level The employment taxes here are set up so that there's two components there's a six point two percent social security component and a one point four five percent Medicare component and both the employer and the employee pay equal amounts of that. So they both pay six point two. They both pay one point. Four five and so the federal government said look for the employer for the social security part of it. The six point two you can don't don't bother pain the wreck for the rest of twenty twenty you can pay half of it at the end of twenty twenty one in the second half at the end of twenty twenty two and then for small employers. There's very credit there's various Payroll tax credits available for the social security portion of the employer share of payroll taxes Those are generally didn't by whether you have been significantly affected by the By government shutdown or secondly in the quarter where on a year-over-year basis where your receipts drop fifty percent that kicks into qualification to claim some of these social security credits taxes credit or the deferring. It which is a better answer course. But that's limited to folks that are small employers have a hundred employees or less so the states of course are looking at this Essentially saying the states do with the state's WanNa do and so for example. California has offered a first quarter deferral of the taxes that were basically withheld from employees. Nothing to aid the employer yet but we anticipate that they'll be some legislation coming out later to allow that There's only eighteen states right now. That are really addressed sales tax and allowing deferral. So this is going to be a slow roll out when I talked to my salt partner. Says the state's GonNa come in line and they're all gonna adopt the Fed etc but we're coming up on a federal due date which was also extended because of the The rotavirus pandemic. I have one client. That had maybe twenty two states where they file and I I. I was reviewing the manager down on a few more aggressive ones. I just happened to check the website and they were not lining up with the state yet and so my manager had some notes to clear. Do you think this is well? Understood by businesses around the country or and second question is how quickly do you think the states can move on this as in the individual states to adjust they relieved from and provide financial? Assistance will a lot of the state's paralyzed by the fact that they have to meet in person to accomplish a lot of the relief that they would like to so. We anticipate that in the months ahead and as things worsened. You know there will be a more payroll tax deferrals more sales and use tax deferrals across the US and the states will at some point line up with the Extended due dates at least to the extent that they overlap with the Fed. I some of the states a little slow to allow a deferral of the taxes were due April fifteenth extension. And I think in cases where they haven't they'll say you know if you pay thank you very much and if you didn't we'll probably just charge you interest because that's one thing unlike the feds who have said when. I charging any interest when charging any penalty because it's entirely discretionary The states in many cases don't have the ability to waive interest in so to the extent there is relief. There may be a little bit of a drag. We expect that They will get on board eventually. It's just some physical limitations. At this point that probably stopping everybody from rushing to provide release at master. If you've got any comments about the you'll stay systems working. Well you know I think Als Right you know. The federal is taking the lead on this and the states are the taxes are basically the source of revenues for the states. And I think just yesterday or the other day we help. -FORNIA Lousy San Francisco. It's a piecemeal action. It's initiative whether or not a particular municipality or city will defer taxes and tax payments like property tax payments are due soon here and You know everyone's asking am I paying property tax or not and you know finally got issue that there will be a deferral but a lot of homeowners a lot of people here in San Francisco. Were worried about that. So it's still there still no unified of action from the states to move forward. And get the deferral so it's on a state by state basis even automatic micro level. It's going to be a municipality in city basis. So how else that I wanted to raise with? Had A code of conduct released this week by the federal government. My goodness you guys are just all over it they try your honor roll. It's like okay. We're issuing this money. We're getting this released by weight. It's not for free. You better stick by this continent or else there will be repercussions which is really very clear. This code of conduct as about commercial tenancies. Oh close what's happening is. We've got rolling announcements. Yeah trying to keep up with every single day. There's something new being announced so reality is we've got businesses all around the country and if we just had the classic example of a shopping center and there's a whole bunch of shops and the shops are closing or have been forced to close the landlords still insisting on being pipe. There's no income being derived by the business to pay the rich right and so we're still waiting on some guidelines for residential tenancies. But what we've had is this code of conduct for commercial tendencies and people need to be adopted in state legislation and regulations. Broadly what it does is side. That I commissioned landlord and those are the big property trust in the great big wealthy property owners. These are moms and DADS and they self mench super funds. There are a lot of coal smaller. Fry People Commercial Property State will not be able to vic a tenant he doesn't pay during this current ivars period non-payment. They can't fix them for that reason. Has that too? I K which is a good thing. Yes secondly wear. The trade of the tenant has fallen. So let's give a quick example. Let's say the rent would normally be ten thousand dollars a month and the trader businesses dropped by eighty percent so this kind of conduct basically requires the landlord to drop the wrench by the propulsion that they did his jokes. So on the numbers. I'm using it means that instead of charging ten thousand dollars a month rent they will have to give them an eight thousand dollar introduction. Wow I love that. It's very easy to administer. Well that's assuming we try to drop by eighty percents so I'm a landlord tenant how do I know that your trade has dropped by eighty percents? You'RE GONNA give your financial dasher and I'm going to trust that information just as here in the US. This is the Full Employment Act Right for accountants so that eight thousand dollars is then delivered in terms of relief in two forms. At least half of it has to be through a strike Wifa so the landlords kisses goodbye to fifty percents that rents I four thousand dollars. They never going to receive the other fifty percent. The four thousand dollars would then be a deferral and this is spread by the landlord. Either the greater of Tim the lace or two years basically keeping a rent wave the parish and I rent deferral for the other Pash Nafta business was closed altogether and had knowing county that it would be one hundred percent relief hof would be waived and half would be deferred a range of other things. They're doing but it's going to be. How will be flows through? And just because you're not getting ready to doesn't mean you're paying mortgage payments to the bank that I was thinking of is that. Where is the landlord going to get money to pay for the mortgage? Well I can say after Farrell's from the bank the bank will do is cater to pay at. The moment is a wrench holiday. A certain other mental mortgage holiday holiday for this charge interest on Ashok right and the guidelines sale. The kind of conduct says that the landlords should seek to pass on the benefit. They getting from the deferral of the line payments. So not only are they not getting wrench bid. It seems that they should be passing on the benefit. They getting from deferring belated payments said. The tenant gets the benefit of not paying rent now understand. The tenants financial problem with their business. But that doesn't pay the rent but they also sent to somehow get this benefit of the deferral of one payments so. It's an interesting design. It's very interesting and the way that we're passing now. These packages to keep the economies afloat. You know at all different levels makes you wonder. How long is the corona virus pandemic last? I mean on a worldwide basis and I think just with all the scale of measures that are being undertaken by you. Know your country in our country over here. I think it's it's pretty much a sign that we're probably in this for a longer haul than everybody thought this is not just a common slough. Amin our systems are all being halted and at the same time kind of applying shock treatment to to keep away to keep it alive and then your near beautiful analogy robin you have to keep it on simmer so that you can keep it make it. Boil faster again then back. Yeah I. It's just trying to talk with the rules. I mean it's a. It's a very interesting time to definitely be an accountant. Be a tax advisor. Be a lawyer I mean. It's like the essential services to to interpret all of these provisions. That what you said Mrs at is essential services. I'm fed up the way. This package is being designed particularly the cachefly boost for the employers. Where they're getting back this credit for some of the attacks on the wages they have to launch activity statements through the tech system to be entitled to it so that the whole mode of delivery of the stimulus is via the tech system so it's not as accountants at critical times. They're actually going to be made. Adult businesses launched the statements that is the mechanism to get the assistance back to the businesses. Right right so it's it's full employment. Act For for the industry. I think gifts next question would be cash flow and guess. The accounting industry is working really hot at the moment and it's demanding and the questions are coming from all over the place left Rotten Zinta but does this necessarily translate to real cash flow with clients will pay for the services and that will be an interesting question in the months ahead. Write which is on. Everyone's you know it's it's I think it's a white elephant in the room. Yes we're helping. Carry Out all these essential applications and tax returns are getting wild. And you know we're still getting things In interpreting all these new provisions but at the end of the day are we. Are we going to get paid for the services? They're going to get paid for. Exactly right. GotTa get paid for or are we going to be the next mother Theresa. Hopefully you know a we shall see. This is very interesting Podcast that you rob that you Allen. I have have started tax person. I am not involved in the attest function because those folks can have an interesting next year they sure will in an absolute delight and I think we can keep trashing relieving but I know it's getting there and this to a close thank you so much. It's been an absolute delight as I say you by not being able to look at this recording. So thank you Robin. Please be safe and be well and we'll check in with you very soon. There be another time. Thank you Robin. Wells are thank you for listening to this episode of Texas Tech. I've been chatting with Masha Lane at done. An international tax lawyer and director of Private Client Services International at Anderson in the US and to colleague Managing Director Venison Al Ninjas. If you'd like to connect with us on social media you can find texts. Banta on linked in and twitter. Let us know you take on episodes. Also suggest feature topics all speakers you can also get onto the tech team on email using podcast at tech SPANTA DOT COM dot. Au that's podcast at tech SPANTA DOT COM dot. Au and find a regular blog articles at tech SPANTA DOT COM DOT. Au forward slash. Banta hyphen log enjoying podcasts. Please take a moment to write and Russia reviewed for the show. Wherever you are. Well helped him The PRI- follow the show and would love to heal salts. We look forward to you joining us next time and a little slow at my personal message will. It's a really tough time out there take care of hr box and stay safe. Thank you till next time.

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