5 minute tax updates: 10-14 February

No turning back: AUSkey end date set
R&D incentive legislation referred to Senate
e-Invoicing accredited service provider list
Combating illegal phoenixing bill passes both houses
Child care assets: Proposed effective lives
More flexible paid parental leave proposed by new bill
The end of eligible rollover funds
Support for clients who have been scammed
Small business expense claim and tax time toolkit
Employee share schemes under scrutiny again
Venture capital and early stage investor provision clean up
TPAR annual report due in August
Inquiry launched into local corporate bond market
STP and your employer clients
Tax and damaged or destroyed property insurance payouts
Broader definition of significant global entities
Instrument to allow debt data sharing with credit bureaus
Rental stapled structures taxpayer alert update
CGT changes for foreign residents with indirect interests
CGT withholding and clearance certificates
Buy-back or redemption of certain hybrid securities

No turning back: AUSkey end date set
AUSkey access will end at 11.59pm AEDT Friday 27 March. The ATO recommends that practitioners move to using myGovID and RAM well ahead of this date to ensure no interruption to their practices. The Tax Professionals myGovID page now includes “How to move from AUSkey – complete steps” for step-by-step instructions. Also see our feature Transition from AUSKey to myGovID: All you need to know.

R&D incentive legislation referred to Senate
The Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 has been referred to the Senate Economics Legislation Committee. Its report is due on 30 April 2020. There are many changes proposed, but some of the measures contained in the bill include:

  • increasing the R&D expenditure threshold from $100 million to $150 million and making the threshold a permanent feature of the law
  • removing one of the intensity range tiers and to slightly increase the lower tier intensity threshold rate
  • extending the general anti-avoidance rules in the tax law to R&D tax offsets directly.

e-Invoicing accredited service provider list
The ATO has provided a register of service providers that have completed the Australian Peppol Authority accreditation process and are trusted to operate in the network. It emphasises that businesses should speak to a range of service providers about their offerings to ensure the user chooses one that meets their needs.

Combating illegal phoenixing bill passes both houses
The bill Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 introduces new phoenixing offences to prohibit creditor-defeating dispositions of company property, penalise those who engage in or facilitate such dispositions, and allow liquidators and ASIC to recover such property.

Child care assets: Proposed effective lives
The ATO has issued a list of draft effective lives of the assets used in the child care services industry. The list is for comment by interested parties, which is open until 28 February.

More flexible paid parental leave proposed by new bill
A bill to introduce greater flexibility to support working women, including self-employed women and small business owners, has been introduced. The Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 introduces changes to the Paid Parental Leave scheme. Currently, PLP can only be taken as a continuous 18-week block, within the first 12 months after birth or adoption. From 1 July 2020, families will be able to split their PLP into blocks over a two-year period, with periods of work in between.

The end of eligible rollover funds
All super funds are required by law to nominate an eligible rollover fund (ERF) to hold the balances of their lost or ineligible members. But just introduced legislation, Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020, aims to close ERFs by 30 June 2021. No new ERFs will be allowed after the changes are enacted or from 1 May 2020.

Support for clients who have been scammed
Find out what you can do if you have clients who have been the victims of tax fraud and scams. The ATO can help in a number of ways, such as cancelling invalid lodgements, extending time for a replacement return, remit interest, arrange for instalments and more. Also, here is information you can send to affected clients.

Small business expense claim and tax time toolkit
The ATO’s Small Business Tax Time Toolkit may assist you and your small business clients complete accurate expense claims. The toolkit has several useful links to information, calculators and services for use both at tax time and throughout the year.

Employee share schemes under scrutiny again
The Treasurer has requested an inquiry into the tax treatment of ESSs. Terms of reference include examining the effectiveness of 2015 changes in supporting start-ups, the costs and benefits of concessions, the relevance in today’s market, and possible improvements to ATO documentation. Submissions are due by 19 March.

Venture capital and early stage investor provision clean up
The bill Treasury Laws Amendment (2018 Measures No.2) Bill 2019 has passed both houses. Among other things, the bill amends ITAA97 venture capital and early stage investor tax concession provisions to make minor changes to ensure that the provisions operate as intended.

TPAR annual report due in August
The taxable payments annual report (TPAR) is due by 28 August. Federal, state, territory and local government entities are required to report, but addition industries that must lodge are:

  • Building and construction
  • IT services
  • Security, investigation and surveillance
  • Cleaning
  • Courier and road freight.

Businesses can lodge online or on paper. Government entities must lodge online. Watch the ATO video to find out how to lodge online.

Inquiry launched into local corporate bond market
The Standing Committee on Tax and Revenue will inquire into and report on the development of the Australian corporate bond market. It notes that the local retail bond market is small compared to similar countries, and in terms of the amount of debt raised, Australian-based businesses make more use of offshore bond markets. The committee invites interested persons and organisations to make a submission addressing the terms of reference by 19 March 2020. Information that may assist in preparing a submission may be viewed here.

STP and your employer clients
The ATO will this month provide you with a list of your clients’ Single Touch Payroll (STP) status. The list will include clients who:

  • have already transitioned
  • are yet to transition, or have attempted to transition
  • have applied for, or have been granted a deferral or exemption
  • have opted for a concessional reporting option
  • are an employer with closely held payees only
  • have been affected by bushfires.

If you have clients who are yet to start STP reporting, help them get on board.

Tax and damaged or destroyed property insurance payouts
Insurance payouts for purely personal items don’t have to be included in your client’s tax return. For example, any insurance payout your client may receive for a family home that is destroyed by bushfire. However, insurance payouts for income-producing assets may have to be included.

Broader definition of significant global entities
This bill Treasury Laws Amendment (2020 Measures No.1) Bill 2020 proposes amendments to broaden the definition of a significant global entity so that it applies to groups of entities headed by an entity other than a listed company in the same way as it applies to groups headed by a listed company; and applies despite exceptions to when a group of entities must prepare consolidated accounts. It also removes impediments to mergers between complying superannuation funds by permitting the roll-over of both revenue gains or losses and capital gains or losses.

Instrument to allow debt data sharing with credit bureaus
The instrument Taxation Administration (Tax Debt Information Disclosure) Declaration 2019 declares the class or classes of entities whose tax debt information may be disclosed to credit reporting bureaus by taxation officers (and are carrying on a business or similar venture with total tax debts of $100,000 or more for more than 90 days and who fail to effectively engage with the Commissioner). Tax debts are disregarded where the entity is effectively engaging with the Commissioner to manage the debt or is taking action in accordance with the law to dispute the debt.

Rental stapled structures taxpayer alert update
The ATO has updated Taxpayer Alert 2017/1 to account for new legislative developments with certain rental stapled structures. The revised taxpayer alert will continue to apply to those rental stapled structures that are not covered under the new law.

CGT changes for foreign residents with indirect interests
The Principal Asset Test (PAT) in Division 855 will now be applied on an associate inclusive basis. The reform applies from 9 May 2017 and taxpayers will need to review any tax returns lodged from that date to determine if they have correctly complied with the PAT, and seek amendments if needed.

CGT withholding and clearance certificates
An Australian resident considering selling property will need to apply for a clearance certificate from the ATO to avoid having 12.5% of the purchase price withheld on properties with a market value of $750,000 or more.

Buy-back or redemption of certain hybrid securities
The ATO has been made aware of some uncertainty and inconsistent tax treatment in relation to the redemption or buy-back of hybrid securities. Therefore a discussion paper has been issued to facilitate consultation between the ATO and the community as part of the process of developing advice on the application of the tax law.

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