Omnibus tax integrity bill passes both Houses with amendments

There is a bill that has just been passed by both houses pf Parliament, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019, that could be described as an omnibus bill — a quick look at its table of contents can confirm this.

The bill met with amendments in the Senate, and has just been passed by the House of Reps.

Compulsory SG not to include salary sacrifice
One of the amendments was to bring forward the part of the bill that relates to the Superannuation Guarantee, from July next year to January.

Changes there seek to ensure that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee contributions. In other words, it aims to make sure salary sacrificed amounts cannot be used to reduce an employer’s minimum SG contributions.

The start date of the original proposal was to be 1 July 2020, but the approved amendment brings that date forward to 1 January 2020.

Deductions denied on vacant land
Also on the amendments list were proposed exceptions to the proposal to limit tax deductions for losses or outgoings incurred that relate to holding vacant land.

The problem the bill seeks to address is that income tax law allows taxpayers to claim the costs of holding vacant land if it is held for the purpose of gaining or producing assessable income or carrying on a business for the purpose of gaining such income.

However as the land is vacant, there is often limited evidence about the taxpayer’s intent other than statements by the taxpayer. The reliance on a taxpayer’s assertion about their current intention had led to compliance and administrative difficulties.

The proposed amendments are three-fold, and relate to:

  • structures affected by natural disasters or other exceptional circumstances
  • land held by primary producers, and
  • land in use or available for use in carrying on a business.

The first exception was raised over concerns that some investors may be affected by unusual circumstances out of their control, which could interrupt their ability to negatively gear their property — contemporary examples being the problems being experienced with the Mascot or Opal towers in Sydney.

For other amendments, see here.

Not only but also…
The omnibus bill also addresses concerns regarding income tax and tax administration, such as removing a tax deduction that arises upon repayment of principal under a concessional loan by certain privatised entities, and introducing a new additional basic condition in relation to partnerships for the small business capital gains tax concessions.

It also seeks to:

  • extend to family trusts the anti-avoidance rules that apply to other closely held trusts that undertake circular trust distributions
  • to allow taxation officers to disclose the business tax debt information of a taxpayer to credit reporting bureaus in certain circumstances, and
  • to enable the ATO to develop and/or administer a framework or system for electronic invoicing.
[], [], []

Post a comment