We provide the recent updates in legislation along with tax developments in the areas of corporate tax, individual tax and international tax. We also include the ATO’s recent activities, including its publications, class rulings issued in the past month, latest Australian tax cases and other news in this edition.
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Inside you will find
Federal Budget 2021/22 |
Legislation Update |
COVID-19 Stimulus Packages Updates |
OECD Updates |
ATO Rulings and Activity |
Latest Australian Tax Cases |
In the Federal Budget 2021/2022 handed down on 11 May 2021, the Government has outlined a few key economic forecast indicators and a few key measures were announced. A&A has published a special edition of Federal Budget Tax Update and provided our insight and commentary on what these changes may mean for you, your employees and your business. Some of the key highlights included in the Budget publication are:
You can read the A&A Federal Budget 2021/22 tax update here. |
Since our last update, the following new Commonwealth tax and superannuation legislation has been introduced into Federal Parliament: Treasury laws 2021 No 3 Bill passes House The Treasury Laws Amendment (2021 Measures No 3) Bill 2021 (the Bill) has passed the House of Representatives. The Bill proposes to:
For more details, please refer here. Treasury laws 2021 No 4 Bill introduced Treasury Laws Amendment (2021 Measures No 4) Bill 2021 (the Bill) was introduced into the House of Representatives on 26 May 2021. The Bill proposes amendments to tax law to give effect to a number of 2020-21 and 2021-22 Federal Budget announcements including measures to:
For more details, please refer here. Technical amendments to tax laws Exposure draft legislation and regulations have been released covering proposed minor and technical amendments to taxation laws. The exposure draft materials contain a number of amendments, including the following taxation measures:
Comments on the exposure draft materials were due on 25 May 2021 and the consultation process has now been completed. For more details, please refer here. |
COVID-19 Stimulus Packages Update COVID-19: penalty remission for SGEs The ATO acknowledges the challenges faced by and impacts to significant global entity (SGE) as a result of COVID-19 conditions globally. The ATO will remit failure to lodge on time penalties to nil for some significant global entities (SGEs) lodging their 2021 income tax returns late due to the impacts of COVID-19 until 30 August 2021. The automatic remission is available for SGEs having difficulty meeting their income tax return or General Purpose Financial Statements (GPFS) lodgment obligations if they:
The ATO will not apply blanket extensions to lodgment due dates for any SGE lodgment obligations and will not be able to provide bulk deferrals to registered tax agents with SGE clients. For more details, please refer here. COVID-19: temporary support for lockdown affected workers In a media released on 3 June 2021, the Government has announced a temporary COVID-19 disaster payment for workers who have had their work hours and income significantly affected due to state lockdowns. Eligible recipients with liquid assets of $10,000 or less will receive up to $500 per week for losing 20 hours or more of work and $325 per week for losing under 20 hours. Eligible recipients must be:
The weekly support payment will be made for the second and any subsequent weeks of restrictions. Individuals who are already receiving income support payments, business support payments or the Pandemic Leave Disaster Payment will not be eligible. |
OECD supports developing countries in the time of COVID-19 On 19 May 2021, the OECD released a new report “Tax Co-operation for Development: Progress report in the COVID-19 era”. This report sets out the range of the OECD’s work with developing countries in 2020.These include participating in the development and implementation of inclusive international standards; country-level capacity building programmes delivered through a variety of platforms and modalities; guidance and data developed and analysed by world-class experts on tax policy and administration; and through partnerships with international organisations, regional tax organisations and other stakeholders. For more details, please refer here. |
R&D Tax Incentive customer portal launched A new customer portal has been launched to make it easier for companies to manage their applications for the Research and Development (R&D) tax incentive. Users can now log in to the portal and start drafting their application. Applications can be submitted via the portal from 5 July 2021. The portal includes:
For more details, please refer here. |
FBT car parking threshold for 2021-22 FBT year The ATO has advised that the car parking threshold for the FBT year commencing 1 April 2021 is AUD 9.25 (up from AUD 9.15). For this and other key FBT thresholds for the year commencing 1 April 2021, refer to ATO listing here. Car limit for 2021–22 The car limit for capital allowance purposes for 2021–22 has increased to $60,733 (up from $59,136 for 2020–21). The car limit is used, among other things, in s 40-230 of ITAA 1997 to work out the first element of the cost of certain cars to which the car limit applies. For more details, please refer here. ATO updates – Tax time 2021 forms and temporary full expensing schedule The ATO has released the various forms, schedules and instructions for the 2021 tax return lodgment season, including:
The full list can be accessed under “Tax Time 2021” on the ATO's Forms and instructions page here. Permanent establishments
The ATO has updated its guidance on whether the presence of employees in Australia, due to the impacts of COVID-19, may create a permanent establishment. The ATO will not apply compliance resources to determine if a taxpayer has a permanent establishment in Australia if:
The above approach applies until 31 December 2021. From 1 January 2022, taxpayers will be required to consider whether ongoing arrangements give rise to a permanent establishment in Australia. For more details, please refer here.
The ATO has updated its ruling on permanent establishment on 12 May 2021. Taxation Ruling TR 2002/5 considers the phrase “a place at or through which [a] person carries on any business” in the definition of permanent establishment in s 6(1) of ITAA 1936. The addendum inserts an example of when a period of 6 months or more might not constitute temporal permanence. It applies from 1 March 2020. For more details, please refer here. Class rulings issued:
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For more information, contact us:
Managing Director Cameron Allen +61 3 9939 4488 cameron.allen@aa.tax |