5 minute tax updates: 3-7 February

Tax & Super’s 100th anniversary
Bushfire assistance bill passed by Parliament
Tweaks made to definition of “carrying on a business”
Gummy vitamins and fat-buster supplements escape import duty
Early release of super on ATO radar
Tax professionals conversations webcast
SMSF obligations allowance for bushfire delays
Latest foreign exchange rates
Lump sum payments to medical practitioners case appealed to FFC
Tax considerations when income sourced from crowdfunding
FASEA qualification provider standards finalised
Better guidance on apportionment method for GST in relation to transaction accounts

Tax & Super’s 100th anniversary
Tax & Super’s 100th anniversary

Graham Whyte, Assistant Commissioner, Superannuation and Employer Obligations, presented an illuminating and well-researched speech at the Tax & Super Australia 100th anniversary celebration.

Bushfire assistance bill introduced to Parliament
Bushfire assistance bill passed by Parliament

The government has introduced and passed the Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020, which contains two schedules. The first concerns financial support for volunteer firefighters, which will be treated as non-assessable, non-exempt income, and also acts to make sure disaster relief and recovery payments are free from tax. The second amends ITAA97 to include the Australian Volunteers Support Trust and the Community Rebuilding Trust on the list of deductible gift recipients. The bill was passed on 6 February.

Tweaks made to definition of “carrying on a business”
Tweaks made to definition of “carrying on a business”

An addendum to MT 2006/1 has been issued, amending the miscellaneous tax ruling to ensure it is consistent with TR 2019/1. This last is concerned with defining when a company is considered to be carrying on a business for the purpose of being deemed a small business entity in Div 328 of ITAA97. The addendum applies on and after 5 February 2020.

Gummy vitamins and fat-buster supplements escape import duty
Gummy vitamins and fat-buster supplements escape import duty

An appeal has been dismissed by the High Court concerning classification of certain health supplement products under the tariff act. The dismissal of the appeal to the case Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd means vitamins and weight-loss gummies are to be classified as “medicaments” for the purposes of customs tariff, therefore not attracting import duty.

Early release of super on ATO radar
Early release of super on ATO radar

The ATO is again warning taxpayers that withdrawing super savings before a condition of release is met is illegal. It is asking practitioners to warn their clients about promoter activity, and that clients should contact the ATO on 13 10 20 immediately if approached by someone promoting an early release scheme.

Tax professionals conversations webcast
Tax professionals conversations webcast

The ATO’s next live Tax professionals conversations webcast is on Thursday 13 February 2020, covering the ATO’s focus for the year. After the webcast join your fellow practitioners on ATO Community for a live question and answer session about myGovID.

SMSF obligations allowance for bushfire delays
SMSF obligations allowance for bushfire delays

Trustees of SMSFs coping with the affects of the recent and ongoing bushfires have been given ATO support in that lodgement and other compliance obligations are able to be deferred. The ATO says if your clients live in a bushfire affected area, and are preoccupied with more pressing needs, they needn’t be concerned about their SMSF affairs right now, and obligations in this regard can be sorted out later.

Latest foreign exchange rates
Latest foreign exchange rates

Here is a list of daily, monthly and annual foreign exchange rates. Updated to include daily and monthly rates for January 2020.

Lump sum payments to medical practitioners case appealed to FFC
Lump sum payments to medical practitioners case appealed to FFC

The Commissioner has appealed against the decision of the Federal Court in Healius Ltd v Commissioner of TaxationIn this case payments to doctors for the (purported) goodwill of their practices were held not to be of a capital nature and deductible.

Tax considerations when income sourced from crowdfunding
Tax considerations when income sourced from crowdfunding

Crowdfunding is the practice of using internet platforms, mail-order subscriptions, benefit events and other methods to find supporters and raise funds for a project or venture. It is a rapidly evolving industry, so while the ATO information just published represents its present view of the tax implications of crowdfunding arrangements, it has undertaken to review and update this information as the industry expands and new developments arise.

FASEA qualification provider standards finalised
FASEA qualification provider standards finalised

The Financial Adviser Standards and Ethics Authority (FASEA) has finalised the legislative instrument Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2020. This includes a number of additional approved bachelor and higher degrees, and equivalent qualifications, for the purposes of the education and training standard that relevant providers (financial planners and advisers) must meet under legislative requirements. It also includes FASEA approved recognition of prior learning for education undertaken to attain professional designations and the associated credits appropriate for the existing adviser pathways set out in FASEA’s Education Standard.

Better guidance on apportionment method for GST in relation to transaction accounts
Better guidance on apportionment method for GST in relation to transaction accounts

The ATO is working on additional guidance materials to complement PCG 2019/8 (ATO compliance approach to GST apportionment of acquisitions that relate to certain financial supplies) and its compendium PCG 2019/8EC. A draft schedule 2 is expected to be completed in March that will set out the ATO’s proposed framework for how assessing the risk associated with apportionment methods used to determine the extent of creditable purpose of acquisitions to provide transaction accounts. This will complement our other public advice and guidance products by reflecting our expectations for how the Commissioner’s views are to be applied in practice in designing an apportionment method.

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