Weekly Tax Bulletin --- Page: 2147-2148 : 20 December 2006 Original article by Terry Hayes
ABIX Summary
Thorough documentation can reduce the risk of tax disputes. This is evident from the examination of the documentation of service trusts. Taxpayers have until 30 April 2007 to review their service trust arrangements. The deductibility of service fees pay to associated entities is addressed in Taxation Ruling TR 2006/2. Brett Davies, of Brett Davies Lawyers, advises tax agents to consider whether services fees are commercially realistic. Davies says the Australian Taxation Office pays particular attention to service trust arrangements with insufficient documentation. He says records should include timesheets, the trust deed, minutes of meetings and appropriate "service standards".
