Retention of refunds on outstanding notifications
A final practice statement, expected to be issued later this month, will conclude the approach outlined in PS LA 2020/D2. This will outline the Commissioner’s discretion to retain refunds on outstanding notifications under taxation law. The final outcome will also be guided by responses taken during public consultation about the discretion to retain tax refunds as stated in Schedule 4 of the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020.
PSI attribution and deduction rethink
The ATO states that a draft ruling had been proposed to provide a consolidation of TR 2003/6 Income tax: attribution of personal services income and TR 2003/10 Income tax: deductions that relate to personal services income. But after completing a review of these issues, it has reconsidered the need for such a ruling and is now exploring whether other products, such as web content, may provide the appropriate guidance on this topic.
ASIC bans sale of specific financial product to retail customers
ASIC has registered an instrument that will ban “binary options” from retail sale. A binary option is a financial product where the parties involved in the transaction are assigned one of two outcomes based on whether the option expires in the money (see a more exacting definition here). The ban follows the results garnered from a consultation paper.
Draft LA PS on administration of penalties in relation to electronic sales suppression tools
The ATO says it is working on a practice statement looking at the administration of penalties for the production, supply, possession, and use of electronic sales suppression tools. This draft law administration practice statement (LA PS) will provide guidance to ATO staff when imposing and/or remitting administrative penalties relating to electronic sales suppression tools. I is expected to be completed by May.
AFSA’s study: The consequences of bankruptcy
The Australian Financial Security Authority (AFSA) says although bankruptcy can provide relief if your client is unable to repay their debts, there are consequences that can still affect them. Being aware of these consequences can help them decide if this is the best option.
In other news
What’s really at stake with vaccine passports
The Centre for International Governance Innovation has produced a paper that looks at the idea of vaccine passports as not just temporary, isolated, public health-related measures, one example of how the pandemic is accelerating the rollout of digital identity infrastructure. The paper considers the broader implications for society, particularly as commercial and economic incentives predominate.
OECD looks at “open data” use in pandemic responses
Based on an open call for evidence, this OECD report assesses how open government data (OGD) was used to react and respond to the COVID-19 pandemic during initial stage of the crisis (March-July 2020). It also seeks to transform lessons learned into considerations for policymakers on how to improve OGD policies to better prepare for future shocks.
Affordable housing sales get extra 10% CGT discount
An additional 10% CGT discount may be available when your client sells an Australian residential rental property they used to provide affordable housing. For a property to qualify as “affordable housing” there are specific parameters to be met, and there are also certain eligibility conditions for the taxpayer involved to access the extra CGT discount.
Key superannuation rates and thresholds 2021-22
The ATO has released the main rates and thresholds needed for superannuation practitioners for the 2021-22 year. Some of these have been indexed after average weekly ordinary time earnings figures were recently released by the Australian Bureau of Statistics.
Not-for-profit self-reviewing guide
NFPs have been provided with guidance on the process of self-reviewing their organisation. The ATO recommends that such a review should ideally be conducted every 12 months or when an NFP organisation makes changes to its governing rules or structure and activities. It has also provided worksheet templates to help with the job.
Draft TD on receiver’s obligation to retain money for post-appointment tax liabilities
TD 2019/D2 is not yet finalised, but the ATO expects it to be completed by May 2021. The final determination will set out the Commissioner’s view on a receiver’s obligation to retain money in respect of post-appointment tax liabilities under section 254 of ITAA36.
STP lodgment obligation due dates and deferrals
The ATO says that PS LA 2011/15 will be updated to capture information about lodgment obligations and deferrals in the context of Single Touch Payroll reporting. These updates will incorporate relevant existing ato.gov.au content and should be completed by May 2021.
Active asset test and CGT concession final determination
Taxation determination TD 2021/2 provides advice that a company that carries on a business in a general sense, but whose only activity is renting out an investment property, cannot claim the CGT small business concessions.
Final JobKeeper payments require declaration by next Wednesday
If you have clients currently receiving the JobKeeper payment, their final payment will be processed this month. However to claim payments made in March 2021, you may need to remind clients that they must complete their final monthly business declaration by 14 April. As a bonus, here is a payments and services finder tool from Services Australia that relevant clients may find handy.
The SME Recovery Loan Scheme is now open
Loans for SMEs are available from 1 April until 31 December 2021, open to recipients of the JobKeeper payment between 4 January and 28 March 2021 as well as businesses that are located or operating in eligible flood affected local government areas in March 2021.
New SMSF auditor independence guidance already updated
In mind-March, Daily Update reported that the ATO had issued new guidance on SMSF auditor independence. The ATO has now provided an update on that guidance, indicating that the section regarding reciprocal auditing arrangements and firms that re-structure has been updated. Simply put, the ATO would not consider a threat to independence from one source of referral resulting in up to 20% of a firm’s fee revenue.
ASIC flags possible pandemic insurance payout issues
ASIC has recommended that your small business clients should contact their broker or insurer and ask whether their policy covers COVID-19 related losses, or could, depending on the outcome of test cases before the courts. If they think they could be covered, guidance is available to help your client prepare their claim and calculate losses.
Alert issued on eligible rollover funds and trustee voluntary payments
CRT Alert 005/2021 spells out the mechanisms to allow super providers to make trustee voluntary payments and for the closure of eligible rollover funds. Note that an interim reporting solution is required while super funds transition to the enduring reporting solution in SuperStream Rollovers version 3. This solution is explained here.
Taxpayer alert on illicit alcohol
TA 2021/1 has been issued, which focuses on arrangements where retailers are knowingly or recklessly purchasing illicit alcohol for the purposes of resale. A feature common to all of these arrangements is that the alcohol can be sold in retail outlets at a much greater profit and/or for a lower price than the same or similar products on which excise duty has been properly paid, which creates an unfair competitive advantage.
Multilateral agreement between Australia and Indonesia
The ATO has provided the synthesised text of the MLI and the agreement between the two countries to avoid double taxation and to prevent fiscal evasion with respect to taxes on income.
Foreign exchange rates updated
The ATO has provided a list of daily, monthly and annual foreign exchange rates. These have been updated to include monthly rates from the Reserve Bank of Australia for March 2021. For tax purposes, if your client requires a foreign exchange rate for a currency not listed in the ATO-supplied schedule, they may use any reasonable externally sourced exchange rate for that currency.
Whacky Tax Fact
Some readers may not even remember the 1 cent coin, but we’re sure many others will recall the “copper” 1s and 2s with either nostalgia or a feeling of “good riddance”. They were actually made of bronze, not copper, and filled Australians’ change pockets before they were withdrawn from circulation in 1992. Once collected, most of the coins were melted down and the metal re-used. All of the bronze medals awarded in the Sydney Olympics of 2000 were made of recycled 1 and 2 cent coins. Also, the 2000 Olympics administrative team included a group of ATO officers who advised visiting athletes of any tax obligations and helped them in reclaiming reimbursements for the newly introduced GST for their expenditure during the games.
One business register to rule them all
Plans are forging ahead for the Federal Government’s Modernising Business Registers (MBR) program, with submissions and responses being taken up to 16 April. The plan is to unify the Australian Business Register (ABR) and 31 separate business registers administered by the Australian Securities and Investments Commission (ASIC) onto a single platform. This platform will be administered by the Commonwealth Registrar under legislation and as a separate statutory function of the ATO. The full plan includes the introduction of a director identification number, and sets a date for this to be fully implemented (30 November 2022).
Imminent plans for the ATO to “re-engage” on outstanding obligations
In the latest Consultative Forum report via the TPB website (the forum consists of the ATO and TPB with 26 professional associations), the ATO has stated its intention to recommence engaging with those who have fallen behind with tax obligations. The revenue agency said it had temporarily paused all outbound campaigns and the majority of firmer or stronger actions taken, and as a result the number of taxpayers with outstanding payments or lodgments has grown. So the ATO “has developed a plan” (see page 5 of this communique).
Super contribution caps to increase
From 1 July 2021, Australians will be able to put more into their super as the concessional and non-concessional contribution caps and the general transfer balance cap are set to increase due to indexation for the first time since July 2017. The concessional cap increases from $25,000 to $27,500, and the non-concessional from $100,000 to $110,000.
NSW land tax relief application date extended
Revenue NSW has announced an extension to COVID-19 land tax relief application due date. This has been extended to 31 May 2021, and applies for both 2020 and 2021 land tax. For more details on each, see this Revenue NSW web page.
Commercial deals and the ATO approach
The ATO says it engages early with privately owned and wealthy groups to offer a pre-lodgment compliance agreement for certainty in commercial deals and restructure events. It defines a commercial deal as any significant business transaction that may affect the structure of your client’s business, and provides several examples.