5 minute tax updates: 26-30 October

ATO says to check income data before lodging
Minor (and not so minor) portfolio law amendments
Legislation introduced to support those feeling brunt of COVID economic impact
How the Multilateral Instrument works for Australia
Director identification number measure may be delayed
JobKeeper extension areas of compliance focus
Deregistration of rogue agents a necessity, says ATO
Exemptions and concessions to STP reporting
Fourth agent deregistered over SAN misuse
Reforms to tax treatment of renewable energy certificate refunds
COVID times ripe conditions for serious financial crimes
APRA on alignment of credit risk management reporting standard with prudential standard
Taxable payments annual report resources

ATO says to check income data before lodging
If the ATO identifies income is incorrect or missing from a tax return, it says this will be corrected before issuing a notice of assessment. It says to help streamline processing for you and your clients, where it can the ATO will use high-confidence third party data it holds to adjust returns before issuing an assessment. If it makes adjustments, you can refer to the notice of assessment to help you explain the changes to your clients.

Minor (and not so minor) portfolio law amendments
Treasury has released exposure draft materials for public consultation covering proposed minor and technical amendments to the Treasury portfolio laws. Comments can be made until 17 November. Note that the draft includes an amendment that provides that the capital proceeds from a CGT event should not be replaced with a market value of the CGT asset if the proceeds exceed the market value and are not received at arm’s length.

Legislation introduced to support those feeling brunt of COVID economic impact
A bill has been introduced to Federal Parliament, the Social Services and Other Legislation Amendment (Coronavirus and Other Measures) Bill 2020, which contains several measures to support Australians who are experiencing negative economic consequences of COVID-19. Among these are two additional payments of $250 for pensioners and other support cardholders (about 5 million recipients) to be paid from the end of November and February. The bill also amends the independence criteria for the youth allowance, incentives to encourage agricultural employment, temporary easing of the paid parental leave work tests, and changes to infant death payments and child support.

How the Multilateral Instrument works for Australia
The ATO has published information on the Multilateral Instrument and how it enables jurisdictions to swiftly modify the operation of their tax treaties to implement measures designed to better address multinational tax avoidance and more effectively resolve tax disputes.

Director identification number measure may be delayed
A bill that lapsed due to the last Federal election and was then re-introduced late last year regarding the issuing of unique director identification numbers, is likely to be delayed again. The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 provides for a unique identifier number, dubbed a director identification number (DIN), that will provide traceability of a director’s relationships across companies, enabling better tracking of directors of failed companies, and will prevent the use of fictitious identities. The aim is to prevent illegal phoenix activity. However given the huge impact of COVID-19, and the additional changes to ASIC’s activities over this period, it’s possible the projected commencement will be delayed, possibly until 2022.

JobKeeper extension areas of compliance focus
The ATO states that the JobKeeper extension has brought different compliance concerns to the forefront. As well as the existing focus areas, it now has two new areas of focus for compliance with the JobKeeper extension — the actual decline in turnover test and claiming the incorrect higher tier rate of JobKeeper payment. It has also provided guidance about its compliance approach for eligible business participants and businesses that can’t operate.

Deregistration of rogue agents a necessity, says ATO
The tax profession plays a vital role in supporting the community and protecting the integrity of the tax and super systems from the small number of individuals who seek to undermine the integrity and hard work of the honest majority, the ATO says, adding that the promotion of unlawful tax avoidance schemes by these people risks the reputation of the tax profession. A recent case saw the deregistration of two practitioners (they also face civil penalties) who were spoiling the reserve of trust that the profession has built up over the COVID-19 period.

Exemptions and concessions to STP reporting
The ATO has re-stated the exemptions from reporting through single touch payroll (STP), reminding practitioners that business clients with only closely held payees or withholding payer number (WPN) holders don’t need to start reporting for their payees until 1 July 2021. These exemptions are automatic, and they don’t need to apply. However, they should keep records that support this decision. Other exemptions may be available in special circumstances, on a case-by-case basis. For example, having no internet connection or having a business in administration. You can also remind clients they may be eligible to report quarterly until June 2021 if they have between one and four employees and their payroll is not computerised (for example, you keep records on a spreadsheet or paper). You may also be eligible for a quarterly reporting concession if your business has irregular employment patterns, such as large seasonal increases.

Fourth agent deregistered over SAN misuse
Following a referral from the ATO in relation to identified SMSF Auditor Number (SAN) misuse, the Tax Practitioners Board decided to terminate the registration of an agent who had made false and misleading statements in various annual returns, indicating an audit had been done when it had not.

Reforms to tax treatment of renewable energy certificate refunds
The just introduced Treasury Laws Amendment (2020 Measures No. 4) Bill 2020 makes refunds of large-scale generation shortfall charges NANE income for income tax purposes. The refunds are a measure under the REE Act, which operates to encourage the additional generation of electricity from renewable sources. This is done through the issuing of large-scale generation certificates using eligible renewable energy sources and requiring certain electricity purchasers to surrender a specified number of certificates for the electricity that they acquire during a year. Not doing so generates a renewable energy shortfall charge.

COVID times ripe conditions for serious financial crimes
The ATO says that the current COVID-19 situation has provided a platform for criminals to become more active, targeting vulnerable people at a time when they need help. The Serious Financial Crime Taskforce (SFCT) is an ATO-led joint-agency taskforce established to bring together the knowledge, resources and experience of relevant law enforcement and regulatory agencies to identify and address the most serious and complex forms of financial crime. The ATO says the current focus of the SFCT is on cybercrime (technology enabled crime) affecting the tax and superannuation systems, offshore tax evasion, illegal phoenix activity, and serious financial crime affecting the ATO-administered measures of the Commonwealth Coronavirus Economic Response Package.

APRA issues letter to ADIs on alignment of credit risk management reporting standard with prudential standard
The Australian Prudential Regulation Authority (APRA) has proposed that authorised deposit-taking institutions (ADIs) align reporting standards with existing prudential standards. APRA is proposing a risk-based approach to reporting based on the complexity of the ADI where less sophisticated ADIs have reduced reporting requirements. Submissions are invited before 28 January 2021.

Taxable payments annual report resources
The ATO has available a plethora of resources to help explain the taxable payment annual report system to clients. The range includes videos, fact sheets, webcast recordings, live webinars, information in other languages and other support for small business.

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