5 minute tax updates: 24-28 February

TPB is reviewing its CPE policy and direction
CGT changes to the principal asset test
OECD’s transfer pricing guidance on financial transactions
First 2020 tax professionals webcast recording available
Net drawn around global tax evaders; arrests made
Electronic commerce interface to be decommissioned
Upgrades at ATO gives more results with account offsetting
Default assessment and penalty objected to, disallowed
German national’s 263 days not enough for “residency”
ATO underscores SMSF obligations with regard to appointment of trustees

myGovID and RAM is not going away, and time is running out
Fundraising, and the importance of good governance
Super funds and transfer balance cap changes
Charities podcasts and webinars available
New GST draft determination released
FBT guide for employers is available to download
Decision impact statement released on Glencore decision

TPB is reviewing its CPE policy and direction
A discussion paper released by the TPB raises a number of consultation points on some core elements of its CPE requirements. This includes a revised view that tax practitioners may have these hours increased by around 30%. Submissions close 18 March. If you haven’t already, see what’s available with Tax & Super Australia’s CPDpro subscription.

CGT changes to the principal asset test
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Act 2019 became law late last year, and with it came changes modify the CGT regime. The principal asset test will now apply on an associate inclusive basis from 7.30pm (AEST) on 9 May 2017, for foreign tax residents with indirect interests in Australian real property. This is intended to ensure a CGT liability cannot be avoided by disaggregating these indirect interests. More details here.

OECD’s transfer pricing guidance on financial transactions
The OECD has released a document on transfer pricing for financial transactions, which provides guidance for determining whether the conditions of certain financial transactions between associated enterprises are consistent with the arm’s length principle.

First 2020 tax professionals webcast recording available
The ATO’s first Tax Professionals conversations webcast for 2020 was held on 13 February and its recording can be seen here (one hour).  Led by ATO Senior Director Sylvia Gallagher, the panel discussion looked at the ATO’s focus for the year, scheduled improvements to Online services for agents, and had more on the transition to myGovID and RAM.

Net drawn around global tax evaders; arrests made
Leaders from five international tax organisations came together in Sydney last week to review the group’s actions against transnational tax crime. The “J5” includes the ATO, Britain’s HMRC, the US’s IRS Criminal Investigations, the Canadian Revenue Agency, and the Dutch Fiscal Information and Investigation Service. The IRS reports that two arrests have been made in relation to money laundering using cryptocurrency.

Electronic commerce interface to be decommissioned
From the week commencing 16 March, remittance advice and recovery notices for unclaimed super recoveries will issue via the transfer function in the business portal. Several other changes are to be implemented as well, including payment variation advice (PVA), outcome of lodgment report (OOLR), super contributions surcharge – member exit statement (MES), super contributions surcharge – superannuation provider assessment data (SPAD), and assessment variation advice (AVA).

Upgrades at ATO gives more results with account offsetting
The ATO has improved the capability to auto-offset excess credits between accounts — including the ability to offset income tax refunds and GST credits against certain outstanding super debts. These changes don’t affect your client’s unique superannuation identifier (USI) used in SuperStream accounts, but it might affect their pre-SuperStream super accounts.

Default assessment and penalty objected to, disallowed
In the Administrative Tribunal case Bourne and Commissioner of Taxation (Taxation) [2020] AATA 190, the taxpayer objected to a default tax assessment and the imposition of administrative penalties for a 2015 obligation. The AAT found in favour of the ATO.

German national’s 263 days not enough for “residency”
The AAT has held that the tax-free threshold would not apply in the case of a German backpacker who had contested his tax assessment. Further circumstances of Marc Schiele, who had a one-year Working Holiday visa (subclass 417), included that he had left personal belongings with his parents in Germany, he had departed Australia and returned more than once, there was no “usual place of abode” and not meeting the definitions of “resides” and “domicile and permanent place of abode”.

ATO underscores SMSF obligations with regard to appointment of trustees
The SMSF regulator has reminded funds that all members must be individual trustees or directors of the corporate trustee, and that it is not enough to merely note this fact but that they must be “appointed” under the trust deed and the appointees must also consent in writing.

myGovID and RAM is not going away, and time is running out
Now is the time to move to myGovID and Relationship Authorisation Manager (RAM) and check your practice management software is ready. You will not be able to use AUSkey after 11.59pm AEDT on Friday 27 March. Make the move sooner than later (here’s all you need to know).

Fundraising, and the importance of good governance
The ATO points out that the need for good governance and record keeping practices has been heightened with the increase in donations received by a range of not-for-profits due to the bushfire crisis.

Super funds and transfer balance cap changes
Funds will need to consider if they have been affected by the changes to the transfer balance cap measure recently and contact the ATO if they are. A new type of debit may affect your SMSF member’s transfer balance account if they’re receiving a prescribed defined benefit lifetime pension or annuity.

Charities podcasts and webinars available
The Australian Charities and Not-for-profits Commission (ACNC) has released new Charity Chat podcast episodes, as well as launching its 2020 webinar series.

New GST draft determination released
The determination MSV 2020/D1 specifies the requirements for making valuations for the purposes of applying the margin scheme in Division 75 of the GST Act. This determination also specifies requirements for making valuations obtained by the Commissioner for the purposes of applying the margin scheme in specified circumstances. The requirements apply to valuations for taxable supplies of property made before and on or after 1 March 2010.

FBT guide for employers is available to download
The Fringe benefits tax – a guide for employers is available as a PDF for your business clients or for yourself. Download the guide as a handy one-stop-shop to all things FBT.

Decision impact statement released on Glencore decision
The decision confirmed the existing view of the Commissioner that legal professional privilege was irrelevant where documents or information is obtained otherwise than through the exercise of power of compulsion. The Commissioner’s practice in respect of the use of such documents or information is not affected by the decision.

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