5 minute tax updates: 17-21 August 2020

TPAR lodgment due in one week for businesses who pay contractors
APRA issues consultation letter to authorised deposit-taking institutions
ATO’s compliance approach to arm’s length debt test
Failure to lodge on time penalty admin statement updated
Fast key code guide issued for tax and BAS agents
Guidance on long term casual employee JobKeeper eligibility
Advice under development under strain during COVID-19
Scheme promoter jailed after near-20-year chase
Key ATO webinar topics for small business
AAT appeal affirms decision on working holiday maker
Decision in case regarding nature of outgoings upheld
Employees guide for work expenses
Guide to continuing business

TPAR lodgment due in one week for businesses who pay contractors
Businesses that provide any of certain specified services and pay contractors or subcontractors to carry out these services, may need to report a Taxable payments annual report (TPAR) by 28 August. The services include building and construction (a broad cagtegoru that includes a wide range of activities), cleaning, courier, delivery or road freight, information technology (IT), and security, investigation or surveillance.

APRA issues consultation letter to authorised deposit-taking institutions
To help facilitate authorised deposit-taking institutions (ADIs) supporting their customers through the COVID-19 period, APRA has announced a temporary capital treatment for a period of up to six months for loans where the ADI had granted a repayment deferral. This has been extended, with a consultation letter also issued.

ATO’s compliance approach to arm’s length debt test
The ATO has set out its compliance approach to the arm’s length debt test in the thin capitalisation rules. PCG 2020/7 provides guidance to entities in applying the test, and also provides a risk assessment framework that outlines the ATO’s compliance approach to an application of the arm’s length debt test in certain circumstances which are identified as low risk. The PCG should be read in conjunction with Taxation Ruling TR 2020/4 Income tax: thin capitalisation — the arm’s length debt test.

Failure to lodge on time penalty admin statement updated
The ATO has updated its practice statement dealing with its administration of penalties for failing to lodge documents on time. PS LA 2011/19 has been updated to expand the term “significant global entity” to include a subsidiary member of a consolidated group or a multiple entry consolidated group and to make other minor adjustments.

Fast key code guide issued for tax and BAS agents
Provided for the convenience of tax and BAS agents,the ATO has issued a phone services guide (fast key codes) to find the right phone number for the topic you need to phone the ATO for. The fast key codes allow you to key ahead to the option of your choice without listening to the entire menu. See here for BAS agents, and here for tax agents.

Guidance on long term casual employee JobKeeper eligibility
The ATO has issued some guidance for employers to determine if their employee can be considered a long-term casual employee for JobKeeper purposes. If a casual employee was not an eligible employee prior to 3 August 2020, your employer clients can use the 1 July 2020 test to reassess that employee’s eligibility. The test requires that the employee be employed on a regular and systematic basis for the period 2 July 2019 to 1 July 2020.

Advice under development under strain during COVID-19
The ATO advises that its public advice and guidance program is currently focused on a range of tax and super issues arising from COVID-19 while concurrently providing practical guidance on the tax and super aspects of the government’s economic response. It says this is affecting the delivery of other advice and guidance products. There are however some taxation issues that will be getting attention soon.

Scheme promoter jailed after near-20-year chase
A key promoter of an intricate tax evasion scheme, which was designed to strip Australian companies of their assets and leave them in a position where they were unable to pay their tax liabilities, has finally been caught and sentenced to six years behind bars.

Key ATO webinar topics for small business
The ATO has split its current free small business webinar series into different session topics that cover both general and industry-specific areas of tax obligations. Each session runs for approximately 45 to 60 minutes.

AAT appeal affirms decision on working holiday maker
In Dapper Coelho and Commissioner of Taxation (Taxation) [2020] AATA 2474, in dispute was the residency of taxpayer where applicant is a citizen of a foreign country (“working holiday maker”) where the applicant was assessed for income tax as a non-resident but they submitted they were Australian resident for taxation purposes. The applicant had continuous presence in Australia for more than 183 days of the income year, however the Commissioner was satisfied the applicant’s usual place of abode was outside Australia.

Decision in case regarding nature of outgoings upheld
Duncan and Commissioner of Taxation (Taxation) [2020] AATA 2540 concerned whether outgoing incurred in gaining or producing assessable income was capital or of a capital nature and deductible from assessable income. The applicant acted in his capacity as a director in actions pertaining to insolvent trading.

Employees guide for work expenses
The ATO’s Employees guide for work expenses can help employees decide whether expenses are deductible, and what records are needed to be kept to substantiate them. The guide has been updated.
 
Guide to continuing business
The Federal Government’s business.gov.au has issued Guide on continuing in business in the face of the recent bushfires and COVID-19, which have had devastating outcomes for businesses. This guide provides positive steps your client can take now to help keep their business operating, including topics such as planning recovery, getting support, assessing finances, keeping operations running, reaching out to customers, and protecting the business.

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