Small business entity tax concessions : through the eyes of the practitioner

Australia’s small business sector has pursued often-competing imperatives of simplicity, equity and efficiency in the income tax regime (particularly focusing on the notion of simplicity) over the last decade. In 2001, there was an attempt to provide such simplification and reduce the compliance burden faced by Australian small businesses through the ‘simplified tax system’ (‘STS’). However, despite amendments over the years, the regime is much criticised. This article explores how the STS (now known as the ‘small business entity’ regime or ‘SBE’) is utilised from the perspective of tax practitioners, by analysing their recommendations to small business clients in respect of the regime. The results indicate that practitioners believe the regime did nothing to simplify the tax system for small businesses or reduce tax compliance costs. Indeed, the practitioners believed that the introduction of small business concessions had actually achieved the opposite result — it had increased tax compliance costs for their small business clients. However, tax practitioners still recommend the regime highly because it minimises their client’s tax liability.

Volunteers 'piggy-backing' on their private insurance : an uncertain protection against liability

Volunteering is a very important part of life in Australia with an estimated 36% of the adult population volunteering in 2010. Voluntary work generates economic benefits, addresses community needs and develops the social networks that form the backbone of civil society. Without volunteers, many essential services would either cease to exist or become too expensive for many people to afford. These volunteers, who by definition are not in receipt of any remuneration for their work and services, are exposed to personal injury and to legal liability in the discharge of their functions. It is therefore appropriate that statutory protection is extended to volunteers and that volunteer organisations procure public liability and personal accident cover where possible. However, given the patchwork quilt of circumstances where statutory or institutional cover is available to volunteers and the existence of many and diverse exclusions, it is important to have regard also to what scope a volunteer may have to avail themselves of protection against liability for volunteering activity by relying upon their own personal insurance cover. This article considers the extent of private insurance cover and its availability to volunteers under home and contents insurance and under comprehensive motor vehicle insurance. The most common policies in the Australian market are examined and the uncertain nature of protection against liability afforded by these policies is discussed. This uncertainty could be reduced should the Federal Government through amendments to the Insurance Contracts Regulations standardise the circumstances and extent to which liability protection was afforded to an insured holding home and contents insurance and comprehensive motor vehicle insurance cover.

Modelling the Contribution of Knowledge Management towards Achieving Orgnisational Business Objectives

Knowledge management (KM) continues to receive mounting interest within the construction industry due to its potential to offer solutions for organisations seeking competitive advantage. This paper presents a KM input-process-output conceptual model comprising unique and well-defined theoretical constructs representing KM practices and their internal and external determinants in the context of construction. The paper also presents the underlying principles used in operationally defining each construct using extant KM literature, and offers a number of testable hypotheses that capture the inter-relationships between the identified constructs.

A methodological evaluation of business process compliance management frameworks

Existing compliance management frameworks (CMFs) offer a multitude of compliance management capabilities that makes difficult for enterprises to decide on the suitability of a framework. Making a decision on the suitability requires a deep understanding of the functionalities of a framework. Gaining such an understanding is a difficult task which, in turn, requires specialised tools and methodologies for evaluation. Current compliance research lacks such tools and methodologies for evaluating CMFs. This paper reports a methodological evaluation of existing CMFs based on a pre-defined evaluation criteria. Our evaluation highlights what existing CMFs offer, and what they cannot. Also, it underpins various open questions and discusses the challenges in this direction.

Identifying the triggers for management services in business transformation management

Business transformations are complex organisational change endeavours that result in a business performing current work differently, or performing different work. Information Technology (IT) is a key enabler of such initiatives, but comes with its challenges, as revamping the IT infrastructure in large-scale organisations implies high complexity, high risk, and often high failure rates. We view business transformations as a collection of management services that are demanded and enacted at a program level, defined as abstract resources that provide the managerial capabilities necessary for business transformations. In this research-in-progress, we explore what triggers the need for management services in response to the challenges in business transformation management. We analyse data from two exploratory case studies using the critical incident technique as our qualitative analysis method. Early findings indicate that management service triggers reside on either the strategic level, which may be internally or externally driven, or at the program management level, which may be situational, influential or reactional. We detail implications for our on-going research.

Studies of the off-field behaviours of sportspeople : are sponsors' objectives at risk?

The research reported here addresses the problem of athlete off-field behaviours as they influence sports’ sponsors, particularly the achievement of sponsorship objectives. The question arises because of incidents of sponsorship contract cancellation following news-media reporting of athletes’ off-field behaviours. Two studies are used to investigate the research question; the first establishes the content of news-media reports, and the second tests the effects of news’ reports on athlete, team and sponsor evaluations using an experimental design. Key assumptions of the research are that sponsorship objectives are principally consumer-based and mediated. Models of sponsorship argue that sponsors aim to reach and influence consumers through sponsees. Assuming this pathway exists is central to sponsorship activities. A corollary is that other mediators, in this case the news-media, may also communicate (uncontrollable) messages such that a consumer audience may be told of negative news that may then be associated with the sponsor. When sponsors cancel contracts it is assumed that their goal is to control the links between their brand and a negative referent. Balance theory is used to discuss the potential effects of negative off-field behaviours of athletes on sponsor’s objectives. Heider’s balance theory (1958) explains that individuals prefer to evaluate linked individuals or entities consistently. In the sponsorship context this presents the possibility that a negative evaluation of the athlete’s behaviour will contribute to correspondingly negative evaluations of the athlete’s team and sponsors. A content analysis (Study 1) was used to survey the types of athlete off-field behaviours commonly reported in a newspaper. In order to provide a local context for the research, articles from the Courier Mail were sampled and teams in the National Rugby League (NRL) competition were the focus of the research. The study identified nearly 2000 articles referring to the NRL competition; 258 of those refer to off-field incidents involving athletes. The various types of behaviours reported include assault, sexual assault allegations, driving under the influence of alcohol, illicit drug use, breaches of club rules, and positive off-field activities (i.e., charitable activities). An experiment (Study 2) tested three news’ article stimuli developed from the behaviours identified in Study 1 in a between-subjects design. A measure of Identification with the Team was used as a covariate variable in the Multivariate Analysis of Covariance analysis. Social identity theory suggests that when an individual identifies with a group, their attitudes and behaviours towards both in- and out-group members are modified. Use of Identification with the Team as a covariate acknowledges that respondents will evaluate behaviours differently according to the attribution of those behaviours to an in- or out-group member. Findings of the research suggest that the news’ article stimuli have significant, large effects on evaluations of athlete off-field behaviour and athlete Likability. Consistent with pretest results, charitable fundraising is regarded as extremely positive; the athlete, correspondingly, is likable. Assault is evaluated as extremely negative, and the athlete as unlikable. DUI scores reveal that the athlete’s behaviour is very negative; however, the athlete’s likability was evaluated as neutral. Treatment group does not produce any significant effects on team or sponsor variables. This research also finds that Identification with the Team has significant, large effects on team variables (Attitude toward the Brand and Corporate Image). Identification also has a significant large effect on athlete Likability, but not on Attitude toward the Act. Identification with the Team does not produce any significant effects on sponsor variables. The results of this research suggest that sponsor’s consumer-based objectives are not threatened by newspaper reports linking athlete off-field behaviour with their brand. Evaluations of sponsor variables (Attitude toward the Sponsor’s Brand and Corporate Image) were consistently positive. Variance in that data, however, cannot be attributed to experimental stimuli or Identification with the Team. These results argue that respondents may regard sponsorships, in principle, as good. Although it is good news for sponsors that negative evaluations of athletes will not produce correspondingly negative evaluations of consumer-based sponsorship objectives, the results indicate problems for sponsorship managers. The failure of Identification with the Team to explain sponsor variable variance indicates that the sponsor has not been evaluated as a linked entity in a relationship with the sporting team and athlete in this research. This result argues that the sponsee-mediated affective communication path that sponsors aim use to communicate with desirable publics is not necessarily a path available to them.

Business in troubled waters : does adverse attitude affect firm value?

This paper investigates the relationship between US MNCs' valuations and anti-Americanism in countries where MNCs' foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.

A conversation approach to business model innovation

Sense making through conversation plays a key role in channelling and furthering participatory business model innovation. The designer as facilitator, with conversation as a core tool, is an emerging area of interest within the design research literature. This paper will discuss preliminary findings of a case study of Second Road, a strategy and innovation consultancy that employed a design thinking approach and conversational methods to redesign a client’s business development model. Through this study conversation based co-creation emerged as the primary method for participatory innovation.

Business model experimentation : what is the role of deign-led prototyping in developing novel business models?

This book presents readers with the opportunity to fundamentally re-evaluate the processes of innovation and entrepreneurship, and to rethink how they might best be stimulated and fostered within our organizations and communities. The fundamental thesis of the book is that the entrepreneurial process is not a linear progression from novel idea to successful innovation, but is an iterative series of experiments, where progress depends on the persistence and resilience of the individuals involved, and their ability and to learn from failure as well as success. From this premise, the authors argue that the ideal environment for new venture creation is a form of “experimental laboratory,” a community of innovators where ideas are generated, shared, and refined; experiments are encouraged; and which in itself serves as a test environment for those ideas and experiments. This environment is quite different from the traditional “incubator,” which may impose the disciplines of the established firm too early in the development of the new venture.

Investigating the success of operational business process management systems

Business process management systems (BPMS) belong to a class of enterprise information systems that are characterized by the dependence on explicitly modeled process logic. Through the process logic, it is relatively easy to manage explicitly the routing and allocation of work items along a business process through the system. Inspired by the DeLone and McLean framework, we theorize that these process-aware system features are important attributes of system quality, which in turn will elevate key user evaluations such as perceived usefulness, and usage satisfaction. We examine this theoretical model using data collected from four different, mostly mature BPM system projects. Our findings validate the importance of input quality as well as allocation and routing attributes as antecedents of system quality, which, in turn, determines both usefulness and satisfaction with the system. We further demonstrate how service quality and workflow dependency are significant precursors to perceived usefulness. Our results suggest the appropriateness of a multi-dimensional conception of system quality for future research, and provide important design-oriented advice for the design and configuration of BPMSs.

Social media metrics : are we measuring business value?

Over the past few years many organizations that directly or indirectly interact with consumers have invested heavily into a social media presence. As a consequence some success indicators are openly available to users of many social media platforms, such as the number of fans (or followers, members, visitors and others) or the amount of content(tweets, images, shares or other content). Many organizations additionally track their social activities internally to understand audience reach, consumer influence, brand image, consumer preference or other key metrics that make sense for a business. However, most of the immediately available social media success metrics are activity-based and many organizations are struggling with establishing a direct relationship to business success. This paper systematically reviews some of the common social media metrics/ratings used by organisations, critically analyse its business value and identify gaps formulating research questions for empirical study and concluding with recommendations and suggestions for future research.

Improving business process models using observed behavior

Process-aware information systems (PAISs) can be configured using a reference process model, which is typically obtained via expert interviews. Over time, however, contextual factors and system requirements may cause the operational process to start deviating from this reference model. While a reference model should ideally be updated to remain aligned with such changes, this is a costly and often neglected activity. We present a new process mining technique that automatically improves the reference model on the basis of the observed behavior as recorded in the event logs of a PAIS. We discuss how to balance the four basic quality dimensions for process mining (fitness, precision, simplicity and generalization) and a new dimension, namely the structural similarity between the reference model and the discovered model. We demonstrate the applicability of this technique using a real-life scenario from a Dutch municipality.

The CGT small business concessions : recent evidence from the perspective of the tax practitioner

On 21 September 1999 Division 152 was inserted into the Income Tax Assessment Act (1997) (ITAA 1997). It was subsequently subject to amendments in 2006. Division 152 contains the small business CGT concessions, which enables eligible small business taxpayers to reduce the amount of tax payable on capital gains arising from certain CGT events (including the sale of the small business itself) that occur after 11:45 am on 21 September 1999. One of the stated principal objectives of the legislation was to provide a concessionary regime for small business owners who did not have the same ability to access the concessionary superannuation regime (particularly the superannuation guarantee charge) generally available to employees. The then Federal Treasurer, Mr Peter Costello, when announcing the introduction of the concessions, specifically stated that the object of Div 152 was to provide “small business people with access to funds for retirement or expansion”. The purpose of this project is to: one, assess the extent to which small business taxpayers understand the CGT small business concessions, particularly when considering sale of their business; two, determine which of the four small business CGT concessions are being adopted and/or recommended by tax advisors to clients; and three, determine whether the recent superannuation changes announced by the Federal Government in relation to the capping of the concessional superannuation thresholds have had an impact on the use of the small business retirement concession. It is anticipated that the results of this study will reveal that that small business owners are reliant on their tax advisors to explain the operation of Division 152. It is plausible that give the complexity of the CGT concessions, most small business owners are completely unaware of the four small business CGT concessions contained in Division 152 and do not understand how these concessions apply. Our study will also reveal the extent to which each CGT small business concession has been adopted (and reasons why). In particular, emphasis will be placed on the adoption of the small business retirement concession contained in Subdivision 152-D (and specific reasons for its adoption). This study also seeks to understand whether the recent (and impending) changes to the concessional superannuation cap has resulted in the retirement concession being more widely adopted (or recommended) by tax advisors. We would expect that the results of our study to confirm this to be the case, particularly coupled with the recent economic downturn, which has led to lower superannuation fund balances. By providing accounting firms with this information, small business owners will benefit from the information, becoming better placed to be long-term self funded retirees, providing not only financial benefits to the individuals and the country, but a significant increase in social self-assurance by these members of the community.

Double tax agreements and the international allocation of business income in Australia

Increasingly, the effectiveness of the present system of taxation of international businesses is being questioned. The problem associated with the taxation of such businesses is twofold. A system of international taxation must be a fair and equitable system, distributing profits between the relevant jurisdictions and, in doing so, avoiding double taxation. At the same time, the prevention of fiscal evasion must be secured. In an attempt to achieve a fair and equitable system Australia adopts unilateral, bilateral and multilateral measures to avoid double taxation and restrict the avoidance of tax. The first step in ascertaining the international allocation of business income is to consider the taxation of business income according to domestic law, that is, the unilateral measures. The treatment of international business income under the Australian domestic law, that is, the Income Tax Assessment Act 1936 (Cth) and Income Tax Assessment Act 1997 (Cth), will depend on two concepts, first, whether the taxpayer is a resident of Australia and secondly, whether the income is sourced in Australia. After the taxation of business profits has been determined according to domestic law it is necessary to consider the applicability of the bilateral measures, that is, the Double Tax Agreements (DTAs) to which Australia is a party, as the DTAs will override the domestic law where there is any conflict. Australia is a party to 40 DTAs with another seven presently being negotiated. The preamble to Australia's DTAs provides that the purpose of such agreements is 'to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income'. Both purposes, for different reasons, are equally important. It has been said that: The taxpayer hopes the treaty will prevent the double taxation of his income; the tax gatherer hopes the treaty will prevent fiscal evasion; and the politician just hopes. The first purpose, the avoidance of double taxation, is achieved through the provision of rules whereby the Contracting States agree to the classification of income and the allocation of that income to a particular State. In this sense DTAs do not allocate jurisdiction to tax but rather provide an arrangement whereby the States agree to restrict their substantive law. The restriction is either through the non-taxing of the income or via the provision of a tax credit.