5 minute tax updates: 3-7 August

Discount NSW land tax for new build-to-rent housing projects
ATO relaunches Tax Help program
Client who wants to pay annual PAYG instalment? There’s a form for that
Backpackers here for more than 183 days, but still were not tax residents
Transfer pricing legislation updated
Determination eases income support people back to “normal”
Changes to in-house asset definitions for SMSFs
Input invited on industry specific rulings
PAYG withholding registration for temporary overseas workers

Discount NSW land tax for new build-to-rent housing projects
NSW has announced that it will introduce a land tax discount for new build-to-rent housing projects until 2040. The discount will be equivalent to at least a 50% reduction in land tax, dependent on the unimproved land value. To be eligible for the discount, a build-to-rent development in metropolitan areas must be at least 50 units, with a different threshold for regional areas to be considered. Construction must have commenced on or after 1 July 2020.

ATO relaunches Tax Help program
The ATO has relaunched the Tax Help program, a free and confidential community-based tax return preparation service to assist taxpayers with simple tax affairs. More than 700 dedicated ATO-trained and accredited community volunteers will assist people to complete their tax returns online using myTax. Taxpayers with an income of around $60,000 or less that did not work as a contractor, run a business (including as a sole trader) or have complicated tax affairs are eligible. The ATO is offering training to those willing to become a Tax Help volunteer, particularly in regional and remote locations.

Client who wants to pay annual PAYG instalment? There’s a form for that
The ATO has published an online form for registered tax agents for their clients who choose to pay an annual pay as you go (PAYG) instalment. If an existing PAYG instalments client becomes eligible to pay annually, you need to submit the form by the due date of their first quarterly activity statement of the income year. If the form isn’t submitted in time, the annual election will not take effect until the next income year. New PAYG instalments clients must submit the form by the due date on the activity statement for the quarter in which they entered into PAYG instalments.

Backpackers here for more than 183 days, but still were not tax residents
In the decision for the AAT case Dapper Coelho and Commissioner of Taxation, it has been found that four working-visa holiday makers had been rightly taxed as non-residents of Australia (which they had appealed). The tribunal said that the statutory definition of resident recognised that a person might be physically present in Australia continuously or not for more than 183 days and still have a usual place of abode outside of Australia.

Transfer pricing legislation updated
The ATO advises that transfer pricing legislation has been updated to refer to the OECD’s guidance material. It will be applied retrospectively for income years starting on or after 1 July 2017. The transfer pricing guidelines includes revisions made as a result of the Aligning Transfer Pricing with Value Creation, Actions 8-10 Final Reports of the OECD, amongst other things. This guidance material is relevant for determining the arm’s length conditions in respect of multinational enterprises’ cross-border dealings.

Determination eases income support people back to “normal”
A determination has been made that extends qualification for income support payments and linked concessions, where a recipient would have otherwise ceased to qualify due to a change in their or their partner’s employment income. Extending the “nil rate period” ensures that income support recipients can more easily return to income support, if needed, as a result of changes to the JobKeeper payment scheme.

Changes to in-house asset definitions for SMSFs
A draft legislative instrument has been issued, SPR 2020/D2, which aims to operate to exclude certain assets from being deemed to be in-house assets for SMSFs. This will be the case where the fund, during the 2019-20 or 2020-21 financial years:

  • allows a related party tenant a deferral of rental income under a lease (on arm’s length terms) due to the financial impacts of the coronavirus known as COVID-19, or
  • holds an interest in a related party which is exempt from being an In-house asset due to the operation of regulation 13.22B or regulation 13.22C of the Superannuation Industry (Supervision) Regulations 1994, and that related party allows a tenant a deferral of rental income under a lease (on arm’s length terms) due to the financial impacts of the coronavirus known as COVID-19.

Input invited on industry specific rulings
The ATO is seeking taxpayers’ feedback on various occupation and industry specific tax rulings. This is an opportunity for members to have direct input into advice and interpretations relevant to the sectors in which their clients operate, particularly in the COVID-19 environment. The comment period closes on Sunday 20 September 2020.

PAYG withholding registration for temporary overseas workers
The ATO has updated its guidance on employer pay-as-you-go (PAYG) withholding registration, for employees working in Australia temporarily due to COVID-19 effects on travel.

 

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