Tax Agent Lodgment Concessions
The ATO has said that they will review the lodgment due dates & apply lodgment concessions as required for new clients added by the tax agents where overdue documents are being lodged. This can take up to 3 weeks to appear on the agent’s client list.
Treasury Measures (No. 2) Bill
This bill has received the Royal Assent and includes the below amendments:
- Genuine redundancy age limit – the age limit of 65 will be aligned with the pension age for genuine redundancy and early retirement scheme payments. That is, the concessional tax treatment will apply if the employee is dismissed or retires before they reach pension age (which is currently age 66, rising to 67 by 1 July 2023). This applies to payments received by employees who are dismissed or retire on or after 1 July 2019.
- LCT refunds for farmers and tourism – the luxury car tax (LCT) refund arrangements will be amended to provide a full refund (up to a cap of $10,000) for eligible primary producers and tourism operators who have purchased or imported an eligible vehicle. This applies to cars supplied or imported on or after 1 July 2019.
- Interest on ATO super payments – provides for regulations to prescribe a rate of interest which is payable on amounts held by the ATO which are proactively reunified into a person’s superannuation account, as originally intended. Date of effect: The day after Royal Assent.
Old Tax & BAS Agent Portals Discontinued
The old portals have been closed on 29th November 2019 11:30 PM AEDT and the ATO has brought in the online services for agents through the public beta process to make it the default digital platform for the agents. It has also been noted that 70% of the Tax Agents & 84% of the BAS Agents have already started using the new system even before the closure of the old portals.
Deferral of Superannuation Fund Portfolio Disclosure
ASIC Class Order [CO 14/443) requiring the Superannuation Funds to report their Portfolio Holdings has been deferred from 31st December 2019 to 31st December 2020. ASIC has said that this deferral will allow further time for the Government to develop the regulations and enable funds to finalize their reporting processes & disclosures.
Employee vs. Contractor
The ATO has updated its checklist for business operators to consider before hiring a “contractor”. To provide further context, the ATO notes that there is not just one deciding factor that makes a worker an employee or contractor for tax and superannuation purposes. The ATO says it is crucial for business operators to assess this question correctly as getting it wrong could put the business at risk of penalties and charges. The ATO considers that the employee/contractor distinction can only be made after reviewing the working arrangement in its entirety. To get the right answer, the ATO recommends that business operators review the case scenarios contained in the checklist before hiring someone as a contractor.
Immunity to Tax Agents
The Tax Practitioners Board has published guidance on the legal protection available for the tax agents reporting about an entity (including their client) not complying with the tax laws. This comes after the enactment of the Treasury Laws Amendment (Enhancing Whistleblowers Protection) Act 2019, which specifies whistleblowers are not subject to civil, criminal or administrative liability for making a disclosure about their clients’ misconduct.
This disclosure/reporting must be made to an eligible recipient. Eligible recipients include Tax Commissioner (assisting in the performance of functions under tax law), ASIC, APRA, etc. Such disclosure/reporting qualifies for protection even if it is made to a legal practitioner for the purpose of obtaining legal advice or legal representation. However, it is clarified here that the Tax Practitioners Board is not an eligible recipient.
SMSF Lodgment & Audit Fees
- All SMSFs must be audited before lodging an SMSF Annual Return.
- The Audit Fees need to be reported at the respective ‘Deductible (H1)’ & ‘Non – Deductible (H2)’ labels.
- The information presented at the above labels will be used by the ATO to determine the SMSF’s taxable income, to report to the Public & Government and to risk profile the SMSF Auditors.
- The ATO has also said that non – reporting of Audit Fees reduces their confidence in the accuracy of the information reported in the annual return.
GST – Offshore Sellers of Accommodation – Reminder
The ATO has again reminded that the offshore sellers of Australian Commercial Accommodation are now required to include such sales when measuring their turnover threshold for the purpose of GST and this already came into effect from 1st July 2019. When the turnover threshold is breached, the offshore sellers are required to register themselves for GST and lodge BASs after converting the foreign currency amounts to AUD.
ATO’s concerns on CGT avoidance
The ATO has issued a new taxpayer alert outlining its concerns with arrangements involving the trustee of a unit trust inappropriately avoiding CGT when selling an asset with a large unrealized capital gain to a purchaser, by transferring the asset to a trustee of a new unit trust to obtain a restructure roll-over.
The ATO is reviewing these types of arrangements under the Tax Avoidance Taskforce and is engaging with taxpayers who have entered or plan on entering them.
ATO to contact NRAS Property Owners
The ATO will shortly send letters to property owners involved in the National Rental Affordability Scheme (NRAS) to remind them of their claim requirements.
The clients can be informed that they can claim deductions for expenses incurred with their NRAS rental property, apportioned to exclude the state or territory contribution they received. The contribution amount is non-assessable, non-exempt income for tax purposes.