Monday
Reminder: Domainname.com.au change!
Members are reminded that, from 24 March 2022, anyone with a local connection to Australia (including businesses, associations and individuals) has been able to register a new category of domain name. These shorter simpler domain names end in .au rather than .com.au, .net.au, .org.au, .gov.au or .edu.au. Existing domain name licence holders have been provided priority to register the .au direct equivalent of their domain names until 20 September 2022, after which domain names that have not been allocated will become available to the general public. This new option for domain names creates opportunities for businesses, organisations and individuals, however, could also provide another opportunity for cybercriminals, such as by facilitating fraudulent activity like business email compromise. For example, by registering yourbusiness.au where you have already registered yourbusiness.com.au, in order to impersonate your business. Members are urged to consider their particular circumstances and take the appropriate action.
Join us in Tax & Super Australia’s exclusive webinar with auDA.au as we discuss this new development to domain names and what it means for your and your clients business. auDA is the not-for-profit organisation that was established by the Australian Internet community that works with a range of stakeholders including industry, government and the Australian and international community to administer a trusted .au for the benefit of all Australians, to learn more about this important development.
Super: Meeting disclosure requirements amended
Treasury has made the Superannuation Industry (Supervision) Amendment (Annual Members’ Meetings Notices) Regulations 2022. It will amend certain aspects of the relevant disclosure requirements for such meetings. Among other things, the amendments will: remove itemised disclosure of certain expenditure; remove the double-counting of certain expenditure; and align the definition of “related party” to the definition in the Australian Accounting Standards. It will also permit RSE licensees to include “contextual” expenditure information in a short-form summary. The Regulations apply in relation to a notice of an annual members’ meeting for a year of income for a registrable superannuation entity if the notice is given on or after the commencement of the Regulations, and the year of income ends on or after 30 June 2022.
WET: Price of wine is invoiced price
The AAT has rejected a taxpayer’s argument that the price of wine for wine tax purpose should exclude amounts attributable to containers, delivery and the “goodwill, reputation and romance” of ultra-premium wine. Instead, the AAT confirmed that where wine is sold for single undissected amount, the taxable value of the wine for the purposes of the A New Tax System (Wine Equalisation Tax) Act 1999 was its invoiced price. (Trustee for The Lubiana Family Trust and FCT [2022] AATA 2826, 30 August 2022.)
Court confirms decision to terminate registration of tax agent
The Federal Court has dismissed a Tasmanian tax agent’s appeal and confirmed the decision of the Tax Practitioners Board (TPB) to terminate her registration. The tax-agent had been convicted and sentenced for falsifying documents and had lied to cover up her actions and deceive authorities. The TPB welcomed the decision saying it confirmed that tax practitioners must act with honesty and integrity. The TPB had originally determined that the tax agent was no longer a fit and proper person to be registered due to her criminal convictions for providing 2 false bank cheques to the NSW Office of State Revenue. She had also failed to disclose this conviction to the TPB.
ATO reminder: Directors of NFPs need a director ID
The ATO has issued a reminder that all directors of NFP organisations and clubs registered with the Australian Securities and Investments Commission (ASIC) need a director ID. Directors who were appointed as a new first-time director on or after 5 April 2022 must apply for a director ID before their appointment. The ATO also emphasised that such directors will need to apply for a director ID as soon as possible if they attend an Annual General Meeting (AGM) and are unexpectedly appointed or they are aware they may be elected a director at an upcoming AGM.
Draft Leg: Crypto not taxed as foreign currency
Treasury has released Exposure draft legislation, Treasury Laws Amendment (Measures for Consultation) Bill 2022: Taxation treatment of digital currency, and associated draft explanatory material. Interested parties are invited to provide comments by 30 September 2022. It follows the Government announcement in June 2022 that it would introduce legislation to exclude crypto assets such as Bitcoin from being treated as a foreign currency for Australian income tax purposes. The proposed legislation maintains the current tax treatment of crypto assets and removes uncertainty following the decision of the Government of El Salvador to adopt Bitcoin as a legal tender.
Super: Meeting disclosure requirements – disallowance motion
On Monday 7 September 2022, Tax and Super Australia reported that the Treasury made the Super/annuation Industry (Supervision) Amendment (Annual Members’ Meetings Notices) Regulations 2022. The Regulations would amend certain aspects of the relevant disclosure requirements for such meetings, including removing the requirement for “itemised disclosure” of certain expenditure. Senator David Pocock has now issued a Notice of Motion that he will move for disallowance of the Regulations to improve the transparency of superannuation fund expenditure, particularly to political or semi-political organisations.
STP Instruments repealed
The Taxation Administration – Single Touch Payroll – Spent Instruments Repeal Determination 2022 has been made. It repeals six legislative instruments (as listed) relating to Single Touch Payroll (STP) reporting that are no longer required as they have no ongoing operation.
The AAT has found that a company was entitled to the cash flow boost (CFB) on the basis of accepting that it paid “wages” in the March 2020 quarter in the form of directors’ fees. This was the case notwithstanding that the company had done so by constrictively treating earlier “drawings” made by the controller of company as director’s fees. The AAT also found that neither the company nor an associate had entered into or carried out a scheme or part of a scheme for the sole or dominant purpose of making the company entitled to the CFB for March 2020 (Robis Consulting Pty Ltd and FCT [2022] AATA 2832, 25 August 2022.)Consultation paper on the Your Future, Your Super laws
The Government has released a consultation paper on the Your Future, Your Super laws in keeping with its commitment at the election to review the measures. The paper seeks feedback on any unintended consequences and implementation issues arising from the Your Future, Your Super laws which were introduced in 2021. Submissions are due by 14 October 2022.Court refuses to impose promotor penalties
The Federal Court has rejected an application by the Commissioner and a taxpayer for a declaration agreeing for the imposition of penalties of $100,000 by the ATO against a taxpayer who admitted to being a promotor of alleged “tax exploitation schemes”. The Court refused on the basis that there were 3 other parties before the Court in relation to the alleged schemes and it was yet to be established whether the relevant activities in fact amounted to “tax exploitation schemes”. Therefore, the Court found that it was appropriate to stand the matter over until after the determination of the proceedings against the other parties. (FCT v Bakarich (Penalty) [2022] FCA 1032, 5 September 2022.)“Incentivising Pensioners to Downsize” Bill introduced
The Government has introduced the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 into Parliament. It will amend the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 extend the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 months to 24 months. It will also apply only the lower below threshold deeming rate to these asset test exempt principal home sale proceeds when calculating deemed income. The measures will apply from the later of: 1 January 2023; or, the day after the end of 1 month after this Act receives the Royal Assent.
Friday
No 3 Bill: Tax rates for Pacific workers; disaster data exchange etc
The Treasury Laws Amendment (2022 Measures No. 3) Bill 2022 was introduced into Parliament on 8 September 2022. It will, together with the Income Tax Amendment (Labour Mobility Program) Bill 2022, reduce the tax rate on certain income earned by foreign resident workers participating in the Pacific Australia Labour Mobility scheme from marginal rates starting at 32.5% to a flat 15% (and applies to salary, wages, commission, bonuses etc paid to an employee under the scheme with from 1 July 2022). Other measures contained in the Treasury Laws Amendment (2022 Measures No. 3) Bill 2022 will:
- amend the Foreign Acquisitions and Takeovers Act 1975 (FATA) to double the maximum financial penalties for contraventions of provisions that relate only to residential land (with effect from 1 January 2023);
- amend the TAA 1953 to allow protected information to be disclosed to Australian government agencies for the purpose of administering major disaster support programs approved by the Minister (with effect from the day after Royal Assent and applies in relation to records and disclosures of information made on or after the commencement of the amendments, regardless of when the information was obtained); and
amend the SIS Act to provide for an alternative annual performance test for faith-based products – noting APRA may determine that a product is a faith-based product if a trustee for the product provides APRA with a valid application (with effect from the day the Bill receives Royal Assent).
Financial Services reform Bills introduced
The following financial service reform Bills were introduced into Parliament on 8 September 2022: the Financial Accountability Regime Bill 2022; the Financial Sector Reform Bill 2022; the Financial Services Compensation Scheme of Last Resort Levy Bill 2022, and the Financial Services Compensation Scheme of Last Resort Levy (Collection) Bill 2022. The Bills will introduce a new accountability regime for the banking, insurance and superannuation industries. Among other things, the measures contained in the Bills will:
- Establish the Compensation Scheme of Last Resort (CSLR) which will provide compensation where a determination issued by the Australian Financial Complaints Authority remains unpaid and the determination relates to a financial product or service within the scope of the scheme. (The Commonwealth will fund the establishment of the scheme and its operation in the first year, and a levy will be imposed on the financial services industry to fund the scheme in future years.) The establishment of the scheme and the supporting levy framework commences on the day after Royal Assent to the Bill.
- Amend the National Consumer Credit Protection Act 2009 to enhance the consumer protection framework for consumers of small amount credit contracts and consumer leases, while ensuring these products can continue to fulfil an important role in the economy. These amendments will generally commence on the day after the end of the period of six months beginning on the day the Financial Sector Reform Bill 2022 receives Royal Assent.
At the same time, the Government has released for public consultation accompanying exposure draft regulations. The draft regulations specify matters relating to the CSLR operator’s reporting requirements and identify persons upon whom a levy will be imposed. The draft regulations also outline the methods that underpin the calculation for the amount of levy payable and how they differ based on the type of levy being imposed.
