Look out Pro Surfers, the Government Is Coming for You! – Nick Carroll
by Nick Carroll
Yeah I know, you don’t pay any attention to the Budget. It’s a con job, etc etc. Trying to buy us off with tax cuts. I mean how very dare they.
So no doubt you will not have casually leafed through the Budget papers themselves, especially not the ones concerned with extra revenue raising measures. Of course not. What idiot would do that?
Well, I reckon some pro surfers’ accountants and/or business managers would have been doing that. And when they got to page 45 of revenue measures, specifically concerning measures aimed at improving “tax integrity”, they’d have choked on their acai smoothies.
Here it is:
Tax Integrity — taxation of income for an individual’s fame or image.
The Government will improve integrity in the tax system by ensuring that from 1 July 2019, high profile individuals are no longer able to take advantage of lower tax rates by licencing their fame or image to another entity.
High profile individuals (such as sportspeople and actors) can currently licence their fame or image to another entity such as a related company or trust. Income for the use of their fame or image goes to the entity that holds the licence. This creates opportunities to take advantage of different tax treatments and facilitates misreporting and incorrect tax outcomes.
This measure will ensure that all remuneration (including payments and non-cash benefits) provided for the commercial exploitation of a person’s fame or image will be included in the assessable income of that individual.
This measure is estimated to have an unquantifiable gain to revenue over the forward estimates period.
What this does? It specifically bars pro surfers, along with cheesy TV personalities, The Voice contestants, and anyone else you can think of who trades off their profile and identity and actually lives in Australia, from using a company or trust as an income channel.
Say you are a surfing legend, being paid a million bucks a year by a large surf company, on the basis of your incredible legendhood, for instance. Well from July 2019, you get to pay the top individual tax rate on that moolah, rather than do what you and every other pro surfer for the past 30-something years has done and get it paid into a company structure, where you can claim the shit out of everything that moves, distribute dividends to all sorts of places, and pay a measly 27.5 per cent tax on the remainder.
And the top marginal tax rate for individuals in Australia is currently — drum roll — 45 per cent.
So they’re going to go from paying bugger all tax on that million bucks, to 45 per cent?
Man! If half the pro surfers don’t already have “addresses” in the Cayman Islands, they will soon.
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