Breaking down the proposed new international tax laws

In this post-GFC age of austerity, public anger has been steadily mounting over multinationals – especially high-profile technology companies such as Apple, Google and Microsoft – using elaborate cross-border tax structures to minimise their contributions to government revenues in many of the nations in which they operate.

Inevitably, democratically elected governments have become more determined to tackle profit shifting and tax avoidance. In early September, the Organisation for Economic Cooperation and Development (OECD) proposed a set of draft rules, as part of its ‘Base Erosion and Profit Shifting Project’ (BEPS),  to “end the erosion of tax bases and the artificial shifting of profits to avoid paying tax.”

The new normal

The OECD argues that the current situation, which involves around 3000 tax treaties, is no longer tenable, especially given the digital economy that nations – particularly first-world ones – are increasingly operating in.

In order for governments to easily identify patterns of tax avoidance, multinationals will need to divulge to tax authorities all earnings and activities for each country they operate in. Digital companies will be prevented from “inappropriately” benefiting from being excluded from permanent establishment status in a nation and entering into “artificial arrangements” relating to sales of their goods and services in order to avoid permanent establishment status.

As the OECD puts it: “This would be relevant where, for instance, an online seller of tangible products or an online provider of advertising services uses the sales force of a local subsidiary to negotiate and effectively conclude sales with prospective large clients.”

New rules

While yet to be fleshed out, new rules will be developed to embody the following principles. According to the BEPS report:

i) Companies will no longer be able to game the tax treaty system as the new rules will involve “ensuring the coherence of corporate income taxation at the international level”. This will be achieved “through new model tax and treaty provisions to neutralise hybrid mismatch arrangements”.

ii) Transfer pricing will be clamped down on with the new rules “assuring that transfer pricing outcomes are in line with value creation”. This will be done “through improved transfer pricing documentation and a template for country-by-country reporting”.

iii) Already wondering about loopholes in the new rules that could potentially be exploited? Be warned that the OECD proposal calls for “a report on the feasibility of developing a multilateral instrument to amend bilateral tax treaties” in order to “counter harmful tax practices”.

Of course, not all the proposed BEPS rules may be adopted, but given the political climate it seems almost certain that many will. And tax professionals, as well as those who provide tax courses and tax agent training, will need to adjust the way they do business appropriately.

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Putting a wise head on a young career

Most people who are successful end up that way because they’ve sought out mentors to show them how to reach the top. Australia’s current prime minister, for example, always treated his old boss, John Howard, as a sort of father figure and regularly sought his advice during his quest to occupy The Lodge.

The advantages of having a sage adviser

A mentor can be viewed as a kind of workplace parent – someone who can warn you against making short-sighted moves that could damage your career and instead encourage you to do those things that may be uncomfortable at first but will reap great rewards in the future.

Experience is a valuable thing. And while there’s no substitute for earning it the hard way, there’s also no rule against leveraging the wisdom of others.

A true mentor will provide honest feedback on how you’re performing and offer suggestions on how to improve your performance. They may also introduce you to people in their own network who can further your career.

The right time for outside input

There is an old saying that when the student is ready, the teacher appears. The 21st century version is that when you feel you have something to learn – be it technical skills, management skills or even life skills – you’re ready to seek out a mentor.

The mentor marketplace

People often agonise over where to find an appropriate mentor, but it’s really not that hard. In fact, if you think about it, you’ve almost certainly been mentored throughout your life by relatives, former teachers and sports coaches.

Many companies have mentoring schemes in place. If yours doesn’t (or you’d prefer to venture outside it), you can find a mentor through Chartered Accountants Australia, CPA Australia or the Australian Businesswomen’s Network.

Alternatively, you can simply contact someone you admire – even if you don’t know them – and ask them if they would be interested in mentoring you. After all, imitation is the sincerest form of flattery.

There are no hard and fast rules about what makes a good mentor. If the individual in question is someone you respect, can teach you what you want to know and help you get where you want to be, they’re almost certainly good enough for your purposes, regardless of their location in the org chart, industry reputation or educational qualifications.

The mentor–mentee relationship

Like any other relationship, mentor–mentee relationships go through phases. In the early days, there may be a lot of enthusiasm on both sides, with the mentor flattered that someone is so interested in what they have to say and the mentee eager to learn all they can.

Over time, that initial enthusiasm will fade and interactions might become less frequent. And, if the mentor has done his or her job properly, at some point the mentee will have learnt all they can. At this stage, the parties involved may decide to stay in touch or go their separate ways.

However the relationship unfolds, the mentee should always show the appropriate gratitude and respect towards the person who has chosen to help them out.

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Five resources for salary research

Salaries vary significantly from state to state and from one firm to the next. Along with starting pay, you’ll also want to find out how much you can potentially earn as you climb your chosen career ladder. For example, while tax accountants and tax lawyers attract roughly the same starting salary, the latter can expect to earn $50,000 more when at the top of their field.

Here are five resources to get you started in your search.

1. MyCareer

This popular job-search website pulls its salary data from positions advertised in the last 90 days. It also allows you to drill down to the relevant sub-sector – for example, under the ‘Legal’ category, you can find the average salary range of lawyers specialising in taxation.

2. Hays

With offices in Australia and New Zealand, the Hays annual salary guide covers payroll trends in both countries. Tax accountant salaries in the ‘Commerce and Industry’ and ‘Professional Practice’ sectors are listed by geographic location, and further sub-categorised according to length of industry experience. Legal salaries cover both in-house roles and top-tier, mid-tier and small private practice firms.

3. Robert Half

Robert Half International publishes an annual Salary Guide containing comprehensive salary information for finance and accounting jobs in Auckland, Brisbane, Melbourne, Perth and Sydney. Data for small, medium and large firms is included under each job category. If you are interested in an in-house tax accountant role within the mining sector, that’s also covered. You can also find out how much salaries have changed since last year.

4. Robert Walters

Now in its 15th edition, the Australian version of the Robert Walters Global Salary Survey looks at both permanent (per annum) and contract (per hour) pay ranges for tax accountants and tax managers, as well as legal professionals (albeit not specific to tax law).

5. PayScale

The salary data on this website – which includes tax professionals – is self-reported by employees, so the figures may not be the most solid. However, the site does give you the option of generating a salary report that tells you how well you are doing relative to your industry peers – in exchange for your own salary data, of course.

Snagging a salary package within the tax sector that ticks all the right boxes can be tricky, but these resources can at least ensure you are coming to the negotiating table with the right information on hand.

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Scoring maximum points in assessable class participation

University isn't just about acing your exams and carving a career path. It’s important you don’t forget the here and now, and that includes participation in your weekly classes – an important contributing factor in most university curriculums. 

Believe it or not, there once was a time when students at tertiary institutions would meet regularly with their professors on a one-to-one basis or, at most, with just one or two of their classmates. After tutorial groups expanded to accommodate anywhere up to 20 people, tertiary institutions were forced to find a way to encourage everyone in these groups to prepare for and participate in discussions. They did this by setting aside a certain amount of marks for ‘classroom participation’.

Here are five tips that will help you earn maximum marks for this part of your course assessment.

1. Show up

It sounds straightforward enough, but with the demands of other courses, work and personal commitments, it can be very tempting to skip a tutorial here and there. Avoid that temptation as participation is impossible if you’re not present. Also, show your classmates and teachers you take tutorials seriously by turning up on time, staying until the end and switching off your phone.

2. Prepare

Do the required readings and any homework that’s been assigned. Think about the issues that are likely to be discussed and anticipate the kind of questions that might be asked and how you would respond to them.

3. Fake it ’til you make it

It’s well recognised that contributing to discussions is easier for some groups than others. Extroverts are much more comfortable sharing their thoughts than introverts. Historically, it’s been much more accepted for men to express strong opinions than women. And those from Western backgrounds are typically more comfortable debating with an authority figure such as a teacher than those from Asian backgrounds. Nevertheless, in school – as in the workplace – you’re going to need to learn to speak up, even if you initially find it unfamiliar and uncomfortable to do so.

4. Play well with others

Your mark isn’t determined by the total amount of time you spend speaking, so don’t dominate the discussion. Make your observations succinctly and respond maturely if your classmates or teachers disagree with you. Also don’t put down other people or respond to their contributions with condescending remarks.

5. To be seen as extraordinary, contribute something extra

Everyone has done (or should have done) the background reading, so they’re not going to be particularly interested in you simply repeating something you’ve read. Instead, provide an individual analysis of the material everyone has consumed and raise an issue or make an argument that will take the discussion in a new and interesting direction. Trust us, even if your classmates don’t appreciate it, the (no longer bored) teacher who’s handing out marks for classroom participation will.

As esoteric as the discussions you may be having are, rest assured that being ‘encouraged’ to take part in them via marks for classroom participation is to your ultimate benefit. Learning how to formulate a compelling case, distinguish between strong and weak arguments and analyse data will stand you in good stead throughout your career, as well as all other aspects of your life.

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What employers really want to hear when they ask about your weaknesses

For some graduates, it's the toughest question in an interview: what are your weaknesses? How should you answer? And what do potential employers really want to hear?

There was a time when saying you were a perfectionist or a workaholic were the only acceptable answers to the question of weakness. But unless you are a perfectionist or workaholic (and have supporting evidence), those answers are now considered insincere. We asked some employers in the tax sector to explain what they really want to learn when they ask this question.

Leave rehearsed answers at the door

James Fabijancic, tax graduate recruitment partner at Deloitte's Melbourne office, agrees that rehearsed answers don't cut it anymore.

“We don’t want applicants telling us their weakness is working too hard or being a perfectionist,” he says. “We want to hear real stories, and importantly how applicants are taking steps to overcome any weakness and make themselves better."

He says the process of working through challenges is more important than what those challenges are as Deloitte’s culture is “built on working towards outcomes to address clients’ problems”.

Provide solutions, not excuses

Rob Basker, tax partner at Deloitte's Sydney office, says the question is less about weakness and more about how the candidate handles any situation by meeting it with a solution.

“We approach our interviews as exercises in getting to know each other, and to ask questions about situations to test what an individual has done or would do if they were in certain situations,” says Basker. “This way we can see how he/she would approach the matter in question, from thought to finish, to see if they are innovative or if they would create a 'moment that mattered' for our clients and our team.”

Addressing weaknesses is key

Other employers, such as Grant Thornton, no longer ask the weakness question, preferring instead to focus on the skills that graduates do have and building on that through professional development.

KPMG, on the other hand, is more specific. They ask candidates about what steps they have taken to address criticism they have received in the course of their work or studies, and whether these steps have resulted in change.

“We would look for a mature response where the candidate would acknowledge the criticism and recognise that people take the effort and time to share feedback to help people improve,” says a KPMG spokesperson. “If a candidate acknowledged and agreed with the criticism, then seeking out opportunities to undertake similar tasks to demonstrate improved capability and addressing the criticism would reflect positively.

“If a candidate didn’t agree with the criticism received, then we would expect a candidate to undertake a process of validating the criticism with other people as opposed to discarding the criticism as unfounded. Ultimately, a response that reveals the candidate is committed to self-improvement and continued personal development through action would be a good response.”

Again, this suggests that a question of weakness is not about the specific trait you have, but how you handle an issue.


No matter what weaknesses you have, never fear – your self-awareness in the process of acknowledging it and your capacity for self-improvement in how you address it are what employers are really interested in.

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If you are a tertiary education student, The Tax Institute can help you progress in your career journey.

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