5 minute tax updates: 23-27 November

ATO offers support for longer-term lodgment obligation difficulties
GST assurance test guidance
Parliament report of future of auditing
COVID-19 is ongoing, and so is TPB support
ASFA’s retirement cost index up, in spite of pre-COVID prices partial return
Living life ‘online’ brings some (perhaps not unexpected) dangers
ASIC Corporations (amendment) Instrument 2020/1080
Seasonal Labour Mobility Program adjustment
Tax transparency: reporting of entity tax information
Top 1,000 Next Actions Program

ATO offers support for longer-term lodgment obligation difficulties
The ATO has indicated to practitioners that if you are experiencing longer-term difficulties managing your lodgment program for reasons beyond your control, it can work with you on a supported lodgment program. It says it can discuss circumstances and design solutions that may include removing clients you are not actively managing, identifying overdue lodgment obligations, together with current lodgment program commitments, and applying lodgment deferrals or suspensions of compliance action as appropriate.

GST assurance test guidance
The ATO’s GST Governance, Data Testing and Transaction Testing Guide is a guidance document for the ATO’s Top 100 GST assurance program, Top 1,000 GST assurance program, and Top 1,000 combined assurance program. The guide explains how to self-review you and your clients’ GST governance and conduct regular data testing to ensure correct reporting for GST.

Parliament report of future of auditing
The Parliamentary Joint Committee on Corporations and Financial Services has released its final report on Regulation of Auditing in Australia. As the report notes: “The seismic changes to Australia’s economy precipitated by the COVID-19 pandemic, and various governmental responses to it, have had widespread impacts, including on corporate activity and auditing. In this radically changed environment, independent and accurate external auditing is more critical than ever in helping determine efficient and effective capital allocation.” Of note is the push towards removing any remaining barriers to full digital financial reports, as has been standard in the United States for a decade and is soon to be widely used in the EU.

COVID-19 is ongoing, and so is TPB support
The Tax Practitioners Board reminds tax practitioners affected by COVID-19 that concessional provisions and support measures in still in place. These include annual declaration and renewal concessions, relaxed CPD requirements, ongoing assistance gaining relevant experience for renewal, some expanded BAS services, and TPB approved course requirements concessions.

ASFA’s retirement cost index up, in spite of pre-COVID prices partial return
The “Retirement Standard” produced by the Association of Superannuation Funds of Australia (ASFA) every quarter shows in its latest release (to September 2020 quarter) that the cost of living in retirement has increased 1.8% for couples and 1.6% for singles compared to one year earlier. The spend to achieve a “comfortable” retirement for a couple aged around 65 is now $62,083 a year and for singles $43,901.

Living life ‘online’ brings some (perhaps not unexpected) dangers
Financial losses due to online shopping scams have increased a whopping 42% this calendar year, according to the ACCC’s Scamwatch Radar Alert. Fake ads on classified websites such as Gumtree have contributed greatly to the problem, but scammers are also creating entire bogus websites that look like the real thing. The government body says it has received over 12,000 reports of online shopping scams so far this year, with almost $7 million in reported losses.

ASIC Corporations (amendment) Instrument 2020/1080
This instrument amends the ASIC Corporations (Exempt Proprietary Companies) Instrument 2015/840, the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the ASIC Corporations (Extended Reporting and Lodgment Deadlines – Unlisted Entities) Instrument 2020/395 and the ASIC Corporations (Extended Reporting and Lodgment Deadlines – Listed Entities) Instrument 2020/451 to extend temporary measures aimed at facilitating financial reporting by unlisted and listed entities affected by the impacts of COVID-19.

Seasonal Labour Mobility Program adjustment
A legislative instrument, Taxation Administration (Remedial Power – Seasonal Labour Mobility Program) Determination 2020, has been issued that will see foreign resident employees taxed at a final withholding rate of 15%. It applies to those that previously held a Temporary Work (International Relations) Visa (subclass 403) and now hold a different temporary visa. Taking retrospective effect from 24 March 2020, employers that have mistakenly withheld at a higher rate before the modifications will not be subject to penalties and their employees will be entitled to a refund of the additional amount withheld in error.

Tax transparency: reporting of entity tax information
Report of entity tax information is updated annually as part of the ATO’s legislatively mandated corporate tax transparency work. The annual report uses data taken from tax returns and certain amendments of Australian public and foreign owned corporate tax entities with total income of $100 million or more, Australian-owned resident private companies with total income of $200 million or more, and entities that have petroleum resource rent tax (PRRT) payable.

Top 1,000 Next Actions Program
A “next action” is the investigation of identified compliance income tax risks and the next step.  The ATO examines the tax affairs of Australia’s largest 1,000 public and multinational companies with an annual turnover above $250 million to give it and the community confidence that these companies and superannuation funds are paying the right amount of tax. Following a Top 1,000 assurance review the ATO may engage with relevant taxpayers for further action.

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