Oz Expat - any of you currently using SMATS for their tax return?

[kristaje]

Hi All,

Just wonder if any of you is using SMATS (www.smats.net) at the moment for tax return? Could you please share your experience on your dealings with them, and direct line to the accountant if any?

I attended their seminar few months back which was very informative, so we decided to go with them for Y2012/2013 return, as they seemed to be very experienced in handling expats' matters. We sent our files to them on Oct last year but had not heard back since and having problems getting our emails & phone calls returned. Start to get a bit worry now as it's already May. We usually have our tax return completed on March the latest.

Thanks.

 

[Paul@PFI]

Registered by the tax Practitioners Board ?? Yes. Registered Agent #62364000

Looks dodgy however. Other than Top 4 firms few have offices in cities quoted. And just Scarborough WA not major cities ? Methinks its a association of unrelated firms so the unified services may be a bit hit & miss ?? 1 out of 100 for website. Seminar ?? For tax services ? Thats a worry.

If they havent acted on your info you should contact them PHONE first. If no reply a complaint about conduct to the Tax Practitioners Board is warranted. Proof of their failure may assist if you get penalties ($850 this year for late lodgement!!) I would think your arent on extended lodgement. Remission of penalties may be soemthing to consider and "safeharbour rules" allow you benefit of doubt if agents fails you. Agents required to perform work in a timely manner. Are you sure they "received" it ??

Plan B is use another agent asap.

I have stacks of clients across the globe incl China / HK. There are some specific issues for expats and residency etc strategies. First one is determining if you are resident / non-resident for tax purposes...Dont assume you are until advised that is the case ! Important too you and agent understand the manner of taxation in country you reside in and any misalignments between the two. (eg NZ CGT v's Australia CGT rules.)

Tip : If a tax agent doesnt ask to see your Chinese Visa's they might not get residency right.

Most important tip I can give free is get your IP valued !! CGT discount was lost for non-residents from 8May12. If you acquired before 8/5/12 and suspect a unrealised capital gain at that time then get a valuation (not agent opinion). This will park the CGT discount accrued up to that date.

 

[kristaje]

Hi Paul,

Thanks for your reply. Sorry for late reply, I thought I had notification set on this thread but turned out not.

I'm not sure how the company's structure is, but their employee in Hong Kong is reporting to someone in WA (their headquarter) and while she is apologetic (the one in HK), she couldn't do much to help except to offer forwarding my emails to WA! The WA office definitely received the files I sent, as I received an acknowledgement from them - but I could only get as far as their receptionist in WA when calling, left messages, but no reply so far. I'm not sure if I'm on extended lodgement at the moment, which is a worry.

Thanks for info on safe harbour rule and remission of penalty. Will look more into it. I'll probably consider bringing things to Tax Provisioner Board in the future, but at the moment I just want to get things sorted asap. This whole thing is very frustrating really.

Thanks also for the tip on valuing the IPs. We hadn't actually done this as smats suggested delaying this for now, while rule is still uncertain.

I'll pm you with some questions, if you don't mind. Thank you.

 

[Paul@PFI]

Change tax agents !

I might suggest you convey your concerns about the conduct of the agent to the Tax Practitioners Board. To have someone in China handle tax affairs for a Aus registered agent is a breach without your prior knowledge and consent. They may cancel the registration if the local agent isnt present in Australia with an office open during reasonable hours, experienced in a broad range of tax matters, personally qualified and capable of abiding by the requirements to the public. Not replying to email is probably a fail in any case.
TPB takes this stuff very seriously. Penalties can be very significant. You can lodge a complaint online. I made one recently to assist an expat taxpayer that a major franchise made a mess of. (Their basic errors would have cost him $120K) They acted within three days.

Your returns would be deemed late and subject to penalties BUT I believe you may have solid grounds to seek remission. Keep proof of your troubles and when you sent materials to them. Thats sufficient I would think. ATO probably wont even ask for it. I handle remission issues for no extra cost as its fairly common.

What is important is now acting to just get them lodged. The remission can be addressed afterwards if it happens.

 

[Paul@PFI]

Hi Paul,

Thanks also for the tip on valuing the IPs. We hadn't actually done this as smats suggested delaying this for now, while rule is still uncertain.

Uncertain ??? Its law and has been for some time. Your PM indicates the value to you could be huge. I question the comptency of the advice to wait. I recently asissted a expat client with a number of IPs in close proximity. He had a large firm value them all. $300 a piece. That single bit of advice saved him $60K in tax. In my review I found following errors:
- Incorrect apportionment of many costs such as land tax, interest, etc
- No CGT valuations. Their darft ITR applied 100% tax to a discount cap gain
- Missed depn and cap allowance deductiosn for three years (I amended 2 years)
- he had huge carried fwd losses. Their new office manager argued revenue losses cant offset cap gains. WRONG.


You need to request a CGT valuation for a non-resident. Valuers know that 8May12 was the budget date and needs to be the val date. This gives you a CGT discount on the value up to that date. Shop around. Cost is tax deductible

1. Valuer should seek highest possible valuation at 8may12
2. Dont bother to value properties valued less than cost at 8May12
3. Valuation fees are tax deductible

 

[kum yin lau]

Hi, they have a significant enough presence in Singapore where they had an office in the CBD.

Quite good with Oz & NZ tax issues & very informed about property investing.

I think your problem may be that the HK person isn't the one who does the work.

KY

 

[kristaje]

Paul - Thanks again for the abundant info. I'll contact you offline to discuss further re. our situation and valuer details, etc.

Kum Yin - They do have an office here too near CBD and holds few tax sessions a year. Initial discussions were done with the people here in HK, but you're right - ends up she's not the one doing the work. What really frustrated me though, was that I was asked to contact WA directly when following-up and or send emails to HK which would be forwarded to WA (when couldn't contact WA), and that's it! HK is currently unable to tell me anything, as to where my tax returns are and if/when I'd get them. The lady in HK was very apologetic every time I followed up with her (around 3 times now) and is probably in difficult condition too, I imagine. Asked her for the WA supervisor's email and was told that the accounting in WA consisted of a husband/wife team, so escalating to the husband wouldn't help...Doh!

I can understand that they might be taking more work that they're able to handle, or anything. If they couldn't handle it, I could then just look for other accountant to do the return. What baffled me was that why they couldn't even bother to reply, very weird.

 

[dex]

Uncertain ??? Its law and has been for some time. Your PM indicates the value to you could be huge. I question the comptency of the advice to wait. I recently asissted a expat client with a number of IPs in close proximity. He had a large firm value them all. $300 a piece. That single bit of advice saved him $60K in tax. In my review I found following errors:
- Incorrect apportionment of many costs such as land tax, interest, etc
- No CGT valuations. Their darft ITR applied 100% tax to a discount cap gain
- Missed depn and cap allowance deductiosn for three years (I amended 2 years)
- he had huge carried fwd losses. Their new office manager argued revenue losses cant offset cap gains. WRONG.


You need to request a CGT valuation for a non-resident. Valuers know that 8May12 was the budget date and needs to be the val date. This gives you a CGT discount on the value up to that date. Shop around. Cost is tax deductible

1. Valuer should seek highest possible valuation at 8may12
2. Dont bother to value properties valued less than cost at 8May12
3. Valuation fees are tax deductible

I agree you need to get them valued but there's no need to do it immediately. A valuer can go go back and value them at the date of change of law -- so you only really need to do this when you are selling the property.

 

[kristaje]

Thanks Dex, that's good to know.