The ATO has reported that some businesses are making simple mistakes reporting their GST, and has reminded taxpayers to avoid the following common GST reporting errors:
The ATO has identified 26,000 taxpayers who have claimed deductions during tax time 2018 for travel to their investment residential rental properties, despite recent changes to the tax laws that disallow such claims.
From mid-October 2018, the ATO has started issuing excess concessional contributions (ECC) determinations for the 2017–2018 financial year.
The ATO has recently provided information about how the tax system applies for someone who receives compensation from a financial institution that provided inappropriate advice and/or did not provide advice it should have.
From 1 July 2017, non-business travel costs incurred by individuals, self managed super funds (SMSFs) and “private” trusts and partnerships in relation to residential rental properties are not deductible (s 26-31 of the Income Tax Assessment Act 1997).
The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 was introduced into and passed by the House of Representatives on 16 October 2018 and passed by the Senate on 18 October 2018.
Prime Minister Scott Morrison has announced that the Government will bring forward its planned tax cuts for small business by five years.
The Government has released draft legislation and regulations to give effect to its 2018–2019 Federal Budget measure to provide a one-year exemption from the work test for superannuation contributions made by recent retirees aged 65–74 who have total superannuation balances less than $300,000.
Activities involving electronic sales suppression tools (ESST) and that relate to people or businesses with Australian tax obligations are now legally banned, effective from 4 October 2018.
After more than 18 months of extensive research and consultation, the Institute of Public Accountants (IPA) and the IPA Deakin SME Research Centre have released the second edition of the Australian Small Business White Paper.
In the opening address to the Chartered Accountants Australia and New Zealand National Self Managed Superannuation Fund (SMSF) Conference in Melbourne on 18 September 2018, James O’Halloran, ATO Deputy Commissioner, Superannuation, shared some observations and advice from the ATO’s perspective as regulator for the SMSF sector.
The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 has now passed through both houses of Parliament without amendment.
The report of the House of Representatives Standing Committee on Tax and Revenue into Taxpayer Engagement with the Tax System has been tabled.
On 24 August 2018, the Royal Commission into banking, superannuation and financial services misconduct released the closing submissions setting out possible contraventions by certain superannuation entities.
The ATO has announced that public examinations started in a Federal Court matter on 27 August 2018 in relation to a group of entities connected to a pre-insolvency advisor.
This year, the ATO has launched its biggest ever education campaign to help taxpayers get their tax returns right. The ATO says the campaign, which is running throughout tax time, includes direct contact with over three million selected taxpayers, as well as specialised guides and toolkits for taxpayers, agents, employers and industry bodies.
GST Ruling GSTR 2018/1, issued on 22 August 2018, sets out the ATO’s view on when supplies of real property are connected with the indirect tax zone (ie Australia) under s 9-25(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
The legislative logjam in Federal Parliament is affecting the implementation of a wide range of tax measures, and the ATO is having to implement practical work-arounds for the measures.
The Australian Prudential Regulation Authority (APRA) has released its submission in response to the Productivity Commission’s draft report on superannuation efficiency and competitiveness.
The ATO has reminded taxpayers that they need to lodge a tax return for a financial year in which they exceed their non-concessional contributions cap, and may have to pay extra tax.
On 20 July 2018, the Treasurer released draft legislation to ensure offshore sellers of hotel accommodation in Australia calculate their goods and services tax (GST) turnover in the same way as local sellers from 1 July 2019.
KPMG has released a submission in response to the Treasury position paper on the proposed retirement income covenant announced as part of the 2018–2019 Budget.
On 9 July 2018, the Board of Taxation publicly released its initial report on its review of Australia’s individual income tax residency rules.
From 1 July 2018, the ATO is running a 12-month pilot to extend its independent review service to certain small business taxpayers.
The government on 29 June 2018 officially launched the new stand-alone Business Registration Service, providing a simpler and clearer way to register a business.
With the self managed superannuation fund (SMSF) annual return lodgment deadline upon us, minds should have already turned to meeting compliance requirements. The 2016–2017 financial year includes a few twists and turns which trustees should factor in to avoid late lodgement.
On 29 May 2018, the Productivity Commission released a draft report recommending changes to improve the superannuation system by addressing unintended multiple accounts and default funds that under perform.
The term “black economy” refers to people and businesses who operate outside the tax and regulatory systems, or who are known to the authorities but do not correctly report their tax obligations.
The ATO reports that a record number of tax returns were finalised in the first two months of tax time this year, thanks to the ATO’s data prefilling arrangements and correction of mistakes using analytics and data-matching.
The ATO has started issuing excess transfer balance (ETB) tax assessments to self managed super fund (SMSF) members, or their agents, who had previously received an ETB determination and rectified the excess.
Kelly O’Dwyer has announced the authorisation of Australian Financial Complaints Limited to operate the new financial dispute resolution scheme – the Australian Financial Complaints Authority (AFCA) – which will start accepting complaints from 1 November 2018.
From 1 July 2018, GST will be imposed on the supply of goods valued at equal to or less than A$1,000 (ie low value goods) from outside of Australia to Australian consumers.
On 4 May 2018, the Government released its response to the Senate Economics References Committee report into penalties for corporate and financial misconduct and agreed to increase the civil penalties.
With effect from 1 July 2017, the Treasury Laws Amendment Act 2017 introduced s 26-31 into the Income Tax Assessment Act 1997 to disallow deductions for non-business travel costs incurred by individuals, self managed superannuation funds and “private” trusts and partnerships in relation to residential rental properties.
More than 100 Australians have been identified as “high risk” and requiring further ATO investigation because they have links to Swiss banking.
The ATO has called on employers with 20 or more employees to start preparing now for the Single Touch Payroll (STP) reporting regime, which will be mandatory from 1 July 2018.
The ATO has issued a fact sheet explaining its compliance approach to employers who fail to meet their superannuation guarantee (SG) obligations.
The foreign resident capital gains tax (CGT) withholding regime requires a purchaser of certain Australian property to withhold an amount from the purchase price.
The government has released exposure draft legislation to ensure that a superannuation reversionary transition to retirement income stream (TRIS) will always be allowed to automatically transfer to eligible dependents on the death of the primary recipient.
A Bill has been introduced to amend the A New Tax System, requiring purchasers of new residential premises and new subdivisions of potential residential land to remit the GST on the purchase price directly to the ATO as part of the settlement process.
The black economy includes people who don’t correctly report and meet their tax obligations, and people who operate entirely outside the tax and regulatory system.
Treasury has released draft legislation aimed at ensuring that taxpayers will only be able to access the small business capital gains tax concessions for assets that are used (or held ready for use) in the course of a small business or are an interest in a small business.
The Administrative Appeals Tribunal (AAT) has affirmed the ATO’s decision that income a taxpayer earned working for the United States Army in Afghanistan is not exempt from Australian income tax under s 23AF of the Income Tax Assessment Act 1936 (ITAA 1936).
The Administrative Appeals Tribunal (AAT) has confirmed that a mechanical engineer with a PhD qualification was not entitled to deductions for various work-related expenses of approximately $60,000 that he claimed in the 2014 tax year.
The ATO has advised that employer registration re working holiday makers has been extended to 31 January 2017. Employers employing working holiday makers will not be penalised as long as they register by 31 January 2017. They can still use the new withholding tax rate of 15% from 1 January 2017.
The High Court has unanimously dismissed a taxpayer’s appeal and held that payments of US$160 million made to him pursuant to an incentive “profit participation plan” after termination of his employment was income according to ordinary concepts.
The Administrative Appeals Tribunal (AAT) has affirmed the Commissioner’s decision to refuse a taxpayer’s deduction claim for certain work-related travel expenses.
The Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016 has been introduced in the House of Representatives. The Bill proposes to amend ITAA 1997 to allow primary producers to access income-tax averaging 10 income years after choosing to opt out, instead of that opt-out choice being permanent.
An individual has been unsuccessful before the Administrative Appeals Tribunal (AAT), where he argued that he was an itinerant worker and was therefore entitled to claim tax deductions for travel expenses of some $38,000 for the 2011–2012 income year.
The Government has announced that it will develop an electronic information-sharing mechanism between the ATO and the Family Law Courts to allow superannuation assets held by relevant parties during family law proceedings to be identified swiftly and more accurately.
To help reduce the regulatory burden on businesses, including the tax burden, Assistant Treasurer Stuart Robert has announced that the Federal Government has allocated $1 million to set up 10 tax clinics under a trial program based on the Curtin University Tax Clinic.
The ATO has begun issuing determinations for excess concessional contributions (ECC) of superannuation for the 2017–2018 financial year.
In late 2018, Assistant Treasurer Stuart Robert announced that the Federal Government intends to make it easier, cheaper and quicker for small businesses to resolve tax disputes with the ATO.
The ATO has issued tips for avoiding common errors when reporting net small business income and claiming the small business income tax offset for unincorporated small businesses.
On 16 January 2019, the ATO released an updated version of Practice Statement PS LA 2001/6, its guidance on calculating and substantiating home office running expenses and electronic device expenses.
The Federal Government has announced that it will amend the law to extend the concessional tax treatment for genuine redundancy payments and early retirement scheme payments to align with the Age Pension qualifying age.
Parliament has now passed legislation – the Treasury Laws Amendment (2018 Measures No 4) Bill 2018 – to bring in Single Touch Payroll (STP) reporting for all small employers (that is, employers with fewer than 20 employees) from 1 July 2019.
In a speech on 29 January 2019, Prime Minister Scott Morrison announced the government’s intention to increase the instant asset write-off already available for small businesses from $20,000 to $25,000.
The ATO has recently started referring taxpayers with overdue lodgment obligations to an external collection agency to obtain lodgments on the ATO’s behalf.
The Federal Government has released a consultation paper seeking views on the possible characteristics of a reporting regime to provide information on Australians who receive an income from sharing economy websites.
The Treasury Laws Amendment (2017 Enterprise Incentives No 1) Bill 2017 has finally been passed. The tax law changes under this Bill, which was originally introduced on 30 March 2017.
The Small Business Ombudsman, Kate Carnell, has announced that taxpayers wanting an external review of an adverse tax decision by the ATO through the Administrative Appeals Tribunal.
Minister for Small and Family Business Michaelia Cash has asked the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, to look into the ATO’s practices in pursuing early recovery of tax debts.
The Government has announced that Mr Robert Cornall, a former Secretary of the Attorney-General’s Department, will lead a review of the Scheme for the Compensation for Detriment Caused by Defective Administration.
Single Touch Payroll (STP) is a payday reporting arrangement where employers need to send tax and superannuation information to the ATO from their payroll or accounting software each time they pay their employees.
The ATO reminds businesses to be aware that under the current law, if they have missed a superannuation payment or haven’t paid employees’ super on time.
In a March 2019 address to the Tax Institute Convention, ATO Commissioner Chris Jordan spoke about the ATO’s release of the Individuals not in business tax gap information for the first time in July 2018.
The Administrative Appeals Tribunal (AAT) has decided that a property a small business owner used to store materials, tools and other equipment was an active asset for the purpose of the small business capital gains tax (CGT) concessions.
The ATO has advised that over the coming months it will be increasing its focus on the bulk Australian Business Number (ABN) cancellation program, to continue “to ensure the integrity of the Australian Business Register”.
The ATO has recovered around $100 million in unpaid superannuation from employers since the 12-month super guarantee (SG) amnesty was proposed on 24 May 2018.
The Treasury Laws Amendment (Increasing and Extending the Instant Asset Write-Off) Bill 2019 – introduced as Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019) – received Royal Assent on 6 April 2019 as Act No 51 of 2019.
According to the ATO, wealthy individuals are resident individuals who, together with their business associates, control net wealth of $5 million or more.
While it is being reported that many businesses are not ready for Single Touch Payroll (STP) – one report suggests that 70% of small and medium-sized entities (SMEs) are not ready – employees of businesses that are operating STP face some changes.