5 minute tax updates: October 7 – 11

Testamentary trust change proposed
Expansion of estimates regime to GST, LCT and WET
Extra time for new clients
Super guarantee opt out form
No more spreadsheet TBAR lodgments
WTO looks to Australia for effective cross-border VAT model
Jail after stealing identities and lodging 62 fraudulent returns
Are your clients using STP? The ATO will tell you
GST on financial supplies: Two important updates
GST at settlement: Guides available

Testamentary trust change proposed
Treasury has released exposure draft legislation that targets an “unintended consequence” involving testamentary trusts that allows some taxpayers to inappropriately obtain a concessional tax treatment.

The measure spells out that minors will be taxed at adult marginal tax rates (not the higher rates for minors) only in respect of income a testamentary trust generates from assets of the deceased estate, or the proceeds of the disposal or investment of these assets.

If passed without amendments, the change will apply from 1 July 2019. Interested parties can submit their opinion by 30 October at testamentarytrusts@treasury.gov.au

Expansion of estimates regime to GST, LCT and WET
The estimates regime allows the Commissioner to make estimates of certain overdue and unpaid tax-related amounts. The ATO is preparing guidance on a new measure proposing to bring GST, LCT and WET within the existing estimate regime. This new measure is contained in Schedule 3 of Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019. Draft Practical Compliance Guideline PCG 2019/D4 has more details.

Extra time for new clients
If you take on new or re-engage previous clients with overdue tax returns, you can request additional time to lodge if their 2019 tax return is due by 31 October 2019. Complete the Deferral application for new or re-engaged clients with overdue tax returns form and send it to the ATO through Online services for agents or the Tax Agent Portal. This application form cannot be used for any other obligations.

Super guarantee opt out form
The Super guarantee opt out for high income earners with multiple employers form (NAT 75067) is for your eligible individual clients to apply for a SG employer shortfall exemption certificate to release some of their employers from their SG obligation. The form will be available on ato.gov.au from 21 October 2019. If you require a form before this date, the ATO may be able to help. Call 13 10 20.

No more spreadsheet TBAR lodgments
The ATO introduced the spreadsheet version of the transfer balance account report (TBAR) form as an interim solution for tax agents. Now it says that since the functionality of “Online services for agents” has allowed for online TBAR lodgment since March 2019, it is decommissioning the spreadsheet form on 31 October 2019.

World Trade Organisation looks to Australia for effective cross-border VAT model
The International Chamber of Commerce (ICC) has released an issues brief that is intended to contribute towards international reform talks being led by the World Trade Organisation. The brief highlights a growing concern for micro-, small- and medium-sized enterprises accompanying the impressive growth in the cross-border sale of physical goods purchased online. Commenting on Australia’s non-resident GST model, ICC Secretary-General John Denton said: “Early experience with the Australian model suggests that compliance is high, and it could be an efficient and effective way of taxing physical goods sold via digital platforms. I invite WTO members … to study the Australian model.”

Jail after stealing identities and lodging 62 fraudulent returns
A man charged with 106 offences has been sentenced to five years jail at the Brisbane District Court after it was found that he lodged 62 fraudulent income tax returns, attempting to obtain more than $500,000 in refunds.

Are your clients using STP? The ATO will tell you
The ATO says that in the coming weeks it will provide practitioners with a list of their clients’ STP status. The list will include your employer clients who are yet to transition, have applied for or have been granted a deferral or exemption, or have opted for a concessional reporting option. The ATO notes that if you’ve lodged an application on behalf of your clients’ for additional time to start reporting, it can take up to 28 days, and sometimes more, to process.

GST on financial supplies: Two important updates
A draft amendment (GSTR 2006/3DC1) has been released regarding GST and determining the extent of creditable purpose for providers of financial supplies. It provides guidance on methods that can be used for calculating input tax credits and adjustments for change in use. Also released has been a draft practical compliance guideline (PCG 2019/D7) dealing with the ATO compliance approach to GST apportionment of acquisitions that relate to certain financial supplies. It is due to take effect from 1 January 2020.

GST at settlement: Guides available
The ATO has updated a GST at settlement guide for purchasers and their representatives as well as a guide or suppliers and their representatives. Purchasers of new residential premises need to withhold an amount for payment to the ATO, and suppliers have certain tax obligations to complete so that they can apply for GST credits.

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