MONDAY
Unregistered tax-agent imprisoned and fined for contempt
The Federal Court has fined an unregistered tax-agent $80,000 and sentenced him to 10 days imprisonment for contempt of court. The contempt related to the preparation and lodgment of tax returns for over 50 taxpayers for a fee in circumstances where his tax-agent’s registration had been cancelled, and where some of the returns had been lodged after an injunction had been issue that prevented him from preparing and lodging tax returns. These matters also amounted to breaches of s 50-5(1) of the Tax Agent Services Act 2009. The Court also noted that a term of imprisonment can be suspended but that this case did not warrant a suspension – albeit, the court exercised its discretion to defer the date upon which the term of imprisonment should commence so as to reduce the impact it may have on family members. (Tax Practitioners Board v Williams [2023] FCA 63, 8 February 2023.)
ATO: Planned consultation: debt recovery; FBT and EVs
The ATO has advised as part of its planned consultation process for the year, it is also seeking formal comment on the following items in 2023: Collection and recovery of disputed debts; and Fringe benefits tax and electric vehicles. The ATO also said that If you are concerned about the delay in the delivery of particular pieces of public advice and guidance, you can email the ATO at publicguidance@ato.gov.au.
TUESDAY
Review of Australian philanthropy
The Government has announced that the Productivity Commission will undertake a review of Australian philanthropy with the aim of boosting donations to charities and meeting the Australian Government’s goal of doubling philanthropic giving by 2030. The Government said that “philanthropic giving” underpins the crucial efforts of charities, not for profit organisations and community groups to support vulnerable Australians and build social capital and connectedness in Australian communities. It also noted that while deductible donations have increased as a share of total income, the percentage of taxpayers making donations has fallen. The Productivity Commission will consult broadly, including with Commonwealth, state and territory governments, the philanthropic, not‑for‑profit and business sectors and the general public. It will also hold public hearings, invite public submissions and release a draft report for public review.
ATO reminder: Electronic sales suppression tools illegal
The ATO has issued a reminder that it is committed to tackling “electronic sales suppression tools” (ESSTs) are used to manipulate sales records so a business can under-report its income and avoid paying the right amount of tax. The ATO emphasised that producing, supplying, using or even just possessing an ESST is illegal and harsh penalties can apply. It also said that it has recently conducted a series of raids across Australia with the support of the Australian Federal Police as part of a coordinated global crackdown on businesses suspected of supplying and using ESSTs. The ATO also noted that ESSTs come in a variety of forms, including: an external device connected to a point of sale (POS) system; software installed into a POS system; a feature or modification built into a POS system; and a service provided by a third party.
WEDNESDAY
SMSF trustee disqualifications for December quarter
The ATO has advised that it disqualified 130 individuals from being a trustee, or director of a corporate trustee, of a SMSF during the December 2022 quarter, and that this brings the total number of disqualified individuals for the 2023 financial year to 389. The ATO also emphasised that as the regulator of SMSFs, it can disqualify an individual from being a trustee (or director of a corporate trustee) of a SMSF if they don’t comply with the super law, or if the ATO is concerned about their suitability to be a trustee.
ATO: Updated information on applying for a private ruling
The ATO has released updated information on “what to expect when you lodge a private ruling application”. The information includes: timeframes and communicating with you; requesting further information from you; ruling on matters not raised in the application; making assumptions and using information from third parties; if you’ve been given an earlier ruling; private rulings relating to assessments; withdrawing your application; valuations; delayed rulings; if you don’t agree with our decision; and, publishing an edited version of your ruling on our website.
ATO: Systems for businesses and tax practitioners
The ATO has released updated information on the availability of ATO systems for businesses and tax practitioners. The updated information relates to the following ATO systems: Practitioner lodgment service (PLS) and Standard business reporting (SBR); MyGovID; Online services for business; and STP.
THURSDAY
Measures No 1 Bill 2023 introduced: Various tax and other amendments
The Treasury Laws Amendment (2023 Measures No 1) Bill 2023 was introduced into Parliament this morning [Thursday 16 February 2023]. The measures in the Bill will:
- amend the Corporations Act to allow: (a) ASIC to approve applications from one or more licensees to register on the Financial Advisers Register the same relevant provider; and (b) allow assisted decision-making to be used for any purpose for which ASIC may make decisions in the performance or exercise of ASIC’s functions or powers to register a relevant provider. (Date of effect: from the day after Royal Assent);
- provide the Australian Accounting Standards Board (AASB) with functions to develop and formulate sustainability standards. It also empowers the Financial Reporting Council to provide strategic oversight and governance functions in relation to the AASB’s and the Auditing and Assurance Standards sustainability standards functions. (Date of effect: from the day after Royal Assent);
- implements the following recommendations of the Tax Practitioners Board (TPB) Review: update and modernise the objects clause of the Tax Agent Services Act 2009; create financial independence for the TPB from the ATO; require tax practitioners to not employ or use a disqualified entity without the TPB’s approval, or enter an arrangement with a disqualified entity; convert to an annual registration period; and enable the Minister to supplement the existing Code of Professional Conduct to ensure that emerging or existing behaviours and practices by tax practitioners are properly addressed. (Date of effect: various);
- align the tax treatment of off-market share buy-backs undertaken by listed public companies with the tax treatment of on-market share buy-backs. It also amends the income tax law in respect of selective share cancellations to ensure alignment of tax treatment across capital management activities for listed public companies. (Date of effect: applicable to buy-backs and selective share cancellations undertaken by listed public companies that are first announced to the market after “Budget Time” ie after 25 October 2022); and
- amend the ITAA 1997 to prevent certain distributions that are funded by capital raisings from being frankable. This ensures that arrangements cannot be put in place to release franking credits that would otherwise remain unused where they do not significantly change the financial position of the entity. (Date of effect: applicable to distributions made on or after 15 September 2022).
FRIDAY
ATO: Claiming “working from home” deductions
The ATO has announced that it has “refreshed” the way that taxpayers claim deductions for costs incurred when working from home. The ATO said that under the new arrangements taxpayers can choose one of two methods to claim working from home deductions: either the “actual cost” or “fixed rate” method. However, the ATO emphasised that only the fixed rate method is changing – which applies from 1 July 2022 and can be used when taxpayers are working out deductions for their 2022-23 income tax returns. The ATO further said that these changes provide benefits for those using the revised fixed rate in 2022-23 in relation to items that are difficult and tedious for everyday Aussies to calculate actual work-use, like phone, internet and electricity expenses. Another benefit it says is that taxpayers no longer need a dedicated home office to use the fixed rate method. The ATO also reassured taxpayers who haven’t kept records so far this income year that transitional arrangements are in place for 2022-23 and that from 1 July 2022 to 28 February 2023, the ATO will accept a record which represents the total number of hours worked from home (eg a 4 week diary). However, from 1 March 2023 onwards, taxpayers will need to record the total number of hours they work from home. The details of this new approach is contained in Practical Compliance Guideline PCG 2023/1 (Claiming a deduction for additional running expenses incurred while working from home – ATO compliance approach.)
2022 Measures No 5 Bill 2022 receives assent – deductible gift recipients
On 16 February 2023, the Treasury Laws Amendment (2022 Measures No 5) Bill 2022 received assent as Act No 2 of 2023. Among other things, it contains the new institutions as deductible gift recipients (DGRs): the Melbourne Business School Ltd (from 1 July 2022); St Patrick’s Cathedral Melbourne Restoration Fund (from 1 July 2022 to 30 June 2027); the Leaders Institute of South Australia Incorporated (from 1 July 2022 to 30 June 2027); the Jewish Education Foundation (Vic) Ltd (from 1 July 2021 to 30 June 2026); and the Australians for Indigenous Constitutional Recognition Ltd (from 1 July 2022 to 30 June 2025).
ATO: Varying PAYG instalments
ATO has reminded small businesses that if they think their current PAYG instalments could result in them paying too little or too much tax, they can vary their instalments. Variations must be made on or before the day the instalment payment is due and the varied amount will apply for all of the business’s remaining instalments unless another variation is made before the end of the financial year. The ATO also said that its PAYG instalment calculator is available to help work out new instalment amounts or rates.
Rationalisation of ending ASIC instrument measures – consultation
The government has released exposure draft legislation to move matters in legislative instruments made by ASIC into the primary law and regulations. This will provide greater certainty making it easier for stakeholders to identify their rights and obligations under the financial services law. The draft legislation supports the regulatory stewardship of Treasury portfolio legislation. The government pursues regular improvement and maintenance opportunities to ensure Treasury laws remain current and fit-for-purpose. The government welcomes comments or feedback from stakeholders on the draft legislation and explanatory materials. Comments due by 16 March 2023.
