5 minute tax updates: 25-29 November

Does terminated registration signal thinner ice ahead?
How is the ATO performing? Meeting targets, with 3 exceptions
AUSkey will be replaced by two new digital services
Land tax amendments for Victoria
SMSFs to get SMSs (or emails)
Common Reporting Standard (CRS) reports tool
Year-end timing wriggle room for super contribution claims via SBS Clearing House
Fuel tax credits: Environmental criteria exemptions
SMSFs will breach sole purpose if “pre-retirement benefit” arises, says ATO
Private groups to be contacted over International Dealings Schedule non-lodgment
ATO’s tax compliance approach for cross-border related party financing
Extending super fund choice to enterprise agreements
Fringe benefits tax: New (updated) guide for employers


Does terminated registration signal thinner ice ahead?
The TPB has terminated the registration of a tax agent for failing to lodge his personal income tax returns for 30 June 2017, 30 June 2018 and monthly BASs since May 2017.  The AAT agreed with the decision of the TPB, but reduced the period of time that the individual was to remain unregistered from 18 to 12 months. TSA’s Tax Counsel John Jeffreys comments: “Note how ‘young’ these tax returns are.  The decision to terminate his registration was made on 30 May 2019 in relation to his tax return for the year ended 30 June 2018.  I suspect there will be a number of other tax agents concerned about their own position.”  BONUS: Our Tax Wrap podcast discusses this case (begins at 19.50 minutes).

How is the ATO performing? Meeting targets, with 3 exceptions
The ATO publishes information on a monthly basis that compares its current performance (to end October) against commitments. The transparency achieved is displayed in three colours — green (meeting targets), amber (marginally failing by < 2 percentage points), and red (failed).

The latest results are mostly green (see the performance scorecard here) bar three exceptions. There are two amber results, being the commitment to resolve 85% of complaints within 15 business days (score of 84%) as well as to answer 80% of general calls within 5 minutes (score 79% — and note that calls from practitioners scored a “green” 90% by the way).

But some red has crept into the ATO scorecard with its commitment to finalising SG employee notification cases within four months of creation. Here the ATO scored a mere 19%, which is well short of its stated target of 60%. Such cases arise when complaints made by employees who are concerned that their employer has not paid their super or has paid it late.

As reported in AccountantsDaily, TSA’s Tax Counsel John Jeffreys says the ATO’s performance result was “unimpressive”, but noted that the current public attention towards superannuation entitlements would have caused a large volume of inquiries for the ATO to deal with.

AUSkey will be replaced by two new digital services
From 1 April 2020, you’ll no longer be able to use AUSkey or Manage ABN connections (your myGov account linked to your ABN) to access government online services. These credentials will be replaced with two new digital services: myGovID (the government’s digital identity provider that proves who you are online) and Relationship Authorisation Manager (RAM) (allows you to link your myGovID to an ABN and act on behalf of a fund online). There are however a few things you can do to get ready before you make the move — update ABN details in the Australian Business Register, AUSkey details in AUSkey Manager, and your Access Manager details.

Land tax amendments for Victoria
Victoria’s State Revenue Office has announced some changes to several land tax laws. Amendments include reinstating the original intent of the primary production land exemption for greater Melbourne urban zones, extending vacant residential land tax to residential properties in inner and middle Melbourne that have been uninhabitable for two years or more, and clarifying that the principal place of residence exemption excludes a beneficiary of an implied or constructive trust. Click here for details, and other amendments.

SMSFs to get SMSs (or emails)
From next Saturday (30 November), the ATO has announced that it will start to send SMSF trustees an email or a text message when changes are made to their fund. These changes could be updates on financial details or member information. In light of the new notifications, the ATO advises that trustees or their advisers should ensure contact details are up-to-date, including of course mobile numbers and email addresses. The ATO emphasises that its communications will never ask for a reply via the same format or ask for personal information. There is an ATO webpage to check for current communication activity.

Common Reporting Standard (CRS) reports tool
Australian Reporting Financial Institutions and other CRS reporters with 50 or less individual and 50 or less organisation accounts, or those who wish to provide a nil report, can use the ATO’s Small Reporter Tool v1.2 guide to assist in preparing their report. (Note spreadsheet option not available for Mac users.) The CRS came into effect on 1 July 2017 with the first report due by 31 July 2018. The first report should contain data from 1 July 2017 to 31 December 2017. After this period reports will include data from 1 January to 31 December and will be due annually, by 31 July in the following year.

Year-end timing wriggle room for super contribution claims via SBS Clearing House
In the draft PCG 2019/D8, the ATO states that it will not apply compliance resources to investigating in which year a tax deduction for superannuation contributions “made” by an employer is claimed.  The conditions are that the employer has used the Small Business Superannuation Clearing House to make super contributions prior to year end and the payment has not be received by the superannuation fund until after year end.  Technically, the amount is not tax deductible until the year that the superannuation fund has received the payment.  The employer must have done all things necessary to make the payment through the SBSCH by the end of the income year.

Fuel tax credits: Environmental criteria exemptions
Under the Fuels Tax Act 2006, you are not entitled to claim a fuel tax credit for fuel used in a motor vehicle that does not meet specified environmental criteria. There are exemptions to this where the motor vehicle is used primarily on an agricultural property in carrying on a primary production business.  The draft determination FTD 2019/D1 explains aspects of this exemption.

SMSFs will breach sole purpose if “pre-retirement benefit” arises, says ATO
The ATO has felt the need to remind SMSF trustees and members that their fund’s investments are for the sole purpose of providing retirement benefits to members. It says a fund will fail the sole purpose test (s 62 SIS Act 1993) if it provides a pre-retirement benefit to members or related parties (such as letting members use an investment asset).

Private groups to be contacted over International Dealings Schedule non-lodgment
The ATO says it will be contacting private groups that have not lodged the International Dealings Schedule (IDS) when these have already indicated to the ATO that they would do so on their income tax returns. The IDS imposes obligations to disclose information about related-party international dealings, Taxpayers that are a company, partnership, trust or attribution managed investment trust are required to lodge the IDS when they include an international dealing amount on a tax return, or answer “yes” at that field. See also TR 2011/1 Income tax: application of the transfer pricing provisions to business restructuring by multinational enterprises.

ATO’s tax compliance approach for cross-border related party financing
PCG 2017/4 sets out the ATO’s compliance approach to related party cross-border financing arrangements and related transactions.  The framework in the guideline is used to assess risk and tailor the ATO’s level of engagement with parties to the financing arrangement.  The guideline applies to any financing arrangement entered into with a related party that is not a resident of Australia and to which the cross border test in the transfer pricing tax rules applies.  It applies to both inbound and outbound related party financing arrangements.

Extending super fund choice to enterprise agreements
Legislation to extend choice of superannuation fund to more employees under enterprise agreements and workplace determinations is currently before parliament. The bill, Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019, has been introduced into the House of Representatives.  It proposes to amend the Superannuation Guarantee (administration) Act 1992 to extend choice of superannuation fund to employees covered by enterprise agreements and workplace determinations made from 1 July 2020.

Fringe benefits tax: New (updated) guide for employers
The ATO has made draft amendments to its FBT guide following the release of TR 2019/D5 (which amended its rules around car parking fringe benefits). Click here to access the ATO’s FBT guide for employers (note that chapter 16 has a link to the draft car parking changes, comments on which close 17 January 2020).

Website Comments

  1. Barry H
    Reply

    The ATO Performance Statistics include 90% of tax agent calls were answered within 2 minutes. Whilst it is good to know they were answered quickly, the bigger issue is how long it took to get the call resolved. The ability of ATO staff to deal with a problem raised is well below reasonable expectations. A call to get an activity statement reissued to include PAYG withholding details took 28 minutes to finalise, including 15 minutes on hold. A call to find out details of additional income included in an individuals assessment but not appearing in a Prefill report, took 29 minutes (again including at least 10 minutes on hold) and was not adequately resolved.
    It’s great that the calls are answered quickly. It would be better to see them resolved quickly. That would be a more interesting statistic to see.

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