5 minute tax updates: 13-17 July

Remote exam option for locked-down Melbourne financial advisers
More myGov scams reported by ATO
GST on court orders and out-of-court settlements

Short-term accommodation provided as a business (more information required)
HELP repayment rates for 2020-21
Business income reminder for your clients
Draft legislative instrument for STP closely held payee exemption
Draft GST determination ensures continued access to GST-free vehicles for disabled
Reimbursement for car expenses from employers planned determination
Change to age limits for genuine redundancy ETPs
Income tax: deductions for expenditure on environmental protection activities
The treatment of JobKeeper payments in transfer pricing arrangements

Remote exam option for locked-down Melbourne financial advisers
The Financial Adviser Standards and Ethics Authority (FASEA) advises that Melbourne metropolitan physical location exams will not be offered for the August sitting. Advisers who have registered for a Melbourne physical location exam will have the option to sit the exam remotely or defer to October or a later sitting. More details here.

More myGov scams reported by ATO
The ATO says your clients should be warned about an increased amount of  myGov-related SMS and email scams. These scams look like they have come from a myGov or ATO email address, and they also might appear in your clients’ legitimate ATO or myGov SMS message thread. The ATO says legitimate messages will never include a link to log on to a myGov account.

GST on court orders and out-of-court settlements
An addendum is being issued on the GSTR 2001/4 that adds and updates cross-referenced documents and other minor amendments regarding how a payment (or act or forbearance) that is made in compliance with a court order or out-of-court settlement should be treated for the purposes of GST.

Short-term accommodation provided as a business (more information required)
The ATO has published a list of the documents and information that it needs to process a private ruling request or objection about whether the profit your client makes on the letting of property on a short-term basis is ordinary income. Providing supporting information will reduce the time it takes to process these requests. There is also information about when the business concerns letting rental properties.

HELP repayment rates for 2020-21
The repayment income levels and rates under the Higher Education Loan Program (HELP) for the 2020-21 financial year have been published. From 1 July 2019, all study and training loans are covered by one set of thresholds and rates.

Business income reminder for your clients
That 2020 has been a tough year for businesses is an understatement, and the ATO thinks your business clients may need a gentle reminder of what income needs to be reported. Its list finishes by saying that clients must also report income from assessable government payments, such as the Supporting Apprentices and Trainees wage subsidy and JobKeeper payments. JobKeeper payments must be reported as business income in their individual tax return if they are a sole trader, and as part of their business income if their business is a partnership, trust or company.

Draft legislative instrument for STP closely held payee exemption
STP 2020/D3 applies for the 2019-20 and 2020-21 income years and exempts entities that would otherwise have an obligation to report information to the Commissioner of Taxation under Division 389 of Schedule 1 to the TAA 1953 in respect of an amount paid to a closely held payee. It also has an attached explanatory statement.

Draft GST determination ensures continued access to GST-free vehicles for disabled
The draft CRP 2020/D1, with comments due to close 10 August, aims to close an administrative disconnect rendered after the issuing body for disability certificates became privatised. The determination puts the certification in the hands of medical practitioners.

Reimbursement for car expenses from employers planned determination
The ATO is planning to draft a determination looking at the implications for income tax purposes for employees who receive a reimbursement for car expenses from their employer, where they are using a car they own or lease, to undertake work-related travel. The question to be resolved is do car expense deductions need to be reduced by the amount of any reimbursements received from an employer. A link for comments is included.

Change to age limits for genuine redundancy ETPs
The age at which employees can access concessional tax treatment for genuine redundancy and early retirement scheme payments has been extended from the age-based limit of 65 years to age-pension age. The change applies to employee termination payments (ETPs) made to employees who were dismissed or retired on or after 1 July 2019.

Income tax: deductions for expenditure on environmental protection activities
Taxation ruling TR 2020/2 has been issued, which allows an immediate deduction for expenditure you incur for the sole or dominant purpose of carrying on environmental protection activities. The ruling explains what are “environmental protection activities”, when expenditure is incurred for the “sole or dominant purpose” of carrying on those activities, limits on the amount that can be deducted, and assessability of recouped expenditure on environmental protection activities.

The treatment of JobKeeper payments in transfer pricing arrangements
The ATO has published guidelines on the treatment of JobKeeper payments in transfer pricing arrangements. It says it will assess the impact of the JobKeeper payment on transfer pricing arrangements, by reviewing arrangements where the JobKeeper payment resulted in a change to the transfer price paid or received by the Australian entity, and was shown to effectively shift the benefit of the government assistance to offshore related parties.

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