Getting Up To Date With ATO Loan Requirements
Australia Tax Office Compliant Div 7A
Loan Agreements (2024)
With Div 7A Loan Agreements are now being put under the Microscope by the Australian Taxation Office in an effort to identify potential Tax avoidance by company directors and shareholders. It is more important than ever to ensure business owners and directors have a formal agreement in place to negate potential tax liabilities.
Div 7A Loan Agreement is called a Div 7A Loan Agreement as it relates to Division 7A of Part lll of the Income Assessment Act 1936. Division 7A of Part lll of the Income Assessment Act 1936, in particular Division 7A of the Corporations Act, which allows for a business to loan money to the directors, shareholders, or associates of shareholders.
The ATO is now looking at these loan agreements and putting him under a microscope, and they are wanting to see a formal agreement in place between the company and its director, so it’s not viewed as a way of negating taxation.
The ATO wants to see the term of the loan (usually 7 years), the amount of the loan, the loan payments, the loan repayment times, the interest being charged, etc.
Formalising a Div 7A Loan Agreement should be high priority for all businesses that use Div 7A Loan Agreements.
So Why use CCA to Develop Your Div 7A Loan Agreement
Back Office Convenience
Now one of the key reasons you would use Collection Consultancy Australia or CCA to develop your Div 7A Loan Agreement is the back-office accessibility and reporting that comes with your Collection Consultancy Australia or CCA Div 7A Loan Agreement. Along with your loan agreement, you also get access to your Loan Agreement Dashboard.
Div 7A Loan Dashboard
Now this is your very own Personal Div 7A Loan Agreement Dashboard which provides access to your loan agreement, which you or your accountant can log into at any time, available 24/7. This is where you can view your loan repayments, you can see which payments have been made and which are still outstanding. Your Personal Loan Dashboard is the centre piece of your loan management functionality with various other options available.
Reporting
But most importantly you can access your automated annual reporting which sets out the principal and interest paid over the period of the loan, which can be submitted to your accountant who can then forward to the Australian Taxation Office.
So having your own Personal Div 7A Loan Agreement Dashboard provides complete flexibility not available anywhere else.