KBH Articles & News

AUGUST 2018 Report

  • Government launches new service to simplify business registrations – The new stand-alone service provides a simpler and clearer way to register a business.
  • Illegal early access to super: ATO warning about scammers – Taxpayers are urged to be aware of scammers who promise to organise access to retirement savings for a fee.
  • ATO gives small businesses the chance to seek independent review of ATO audit position – The ATO is running a 12-month pilot to extend its independent review service to certain small business taxpayers.
  • Transacting with cryptocurrency: updated ATO info – The ATO has updated the information on its website dealing with capital gains tax and cryptocurrency.
  • Tax gap for individuals is $8.8 billion, says ATO – The ATO has estimated the size of the “tax gap” between the tax the ATO collects and the amount it would collect if all taxpayers fully complied with the law.
  • ATO warns about scammers at tax time – Taxpayers should be on “high alert” for tax-related scams at tax time.
  • Income tax residency rules for individuals: Board of Taxation recommends reform measures– The Board of Taxation’s recently published report makes recommendations to modernise and simplify the rules.
  • Retirement income covenant needs more flexibility: KPMG – KPMG has released a submission in response to the Treasury position paper on the proposed retirement income covenant announced as part of the 2018–2019 Budget.
  • Illegal phoenix activity costs billions; new Phoenix Hotline – The ATO estimates the annual direct impact of illegal phoenix activity and establishes a hotline for reporting phoenix behaviour.
  • Super funds deliver healthy returns for 2017–2018 – Funds in the “growth” category continue to provide strong positive returns.
  • GST exemption for offshore sellers of hotel bookings to be removed: draft legislation released – The proposed new rules will ensure offshore sellers of hotel accommodation in Australia calculate their GST turnover in the same way as local sellers.

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KBH PartnersAUGUST 2018 Report

JULY 2018 Report

  • Business lending practices in spotlight at Royal Commission – The Financial Services Royal Commission’s third round of hearings focused on the conduct of financial services entities when providing credit to small and medium enterprises.
  • Personal tax cuts now law – The legislation to enact the Government’s seven-year personal income tax reform plan passed Parliament on 21 June 2018.
  • GST property settlement online forms – From 1 July 2018, purchasers of newly constructed residential properties or new subdivisions are required to remit GST directly to the ATO as part of settlement.
  • Major ATO focus on work-related clothing and laundry this tax time –In 2017 around six million people made claims for work-related clothing and laundry expenses, totalling nearly $1.8 billion. The ATO believes many taxpayers are making mistakes or deliberately over-claiming.
  • Advisory Board to help clamp down on the black economy – The new Government-established Board will include members of the private and public sectors who will provide strategic advice on trends and risks in the black economy.
  • Superannuation system: Productivity Commission draft report – The draft report recommends a range of changes to improve Australia’s superannuation system.
  • SMSF compliance: don’t slip up – The 2016-2017 financial year includes a few twists and turns which trustees should factor in to avoid late lodgment.

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KBH PartnersJULY 2018 Report

JUNE 2018 Report

  • Deferring derivation of income – tips to defer the recognition of income.
  • Bringing forward tax-deductible expenses – tips to bring deduction claims forward into 2018.
  • Issues for businesses – a look at company tax rates, imputation, small business deductions and concessions.
  • Issues for individuals – the end of the Budget repair levy, tips for claiming work-related expenses, and a reminder about recent superannuation changes.
  • Issues for property owners – changes for owners of residential rental properties, CGT and GST withholding on property sales, and a proposal to abolish the main residence CGT exemption for non-residents.
  • Tax compliance and developments – Single Touch Payroll, GST on low value imported goods and contractor payments in building and construction.

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KBH PartnersJUNE 2018 Report

MAY 2018 Report

  • ATO closely examines work-related car expenses – The ATO is concerned about taxpayers making mistakes or deliberately lodging false claims for work-related car expenses, and will closely examine claims in 2018 tax returns.
  • Data matching finds taxpayers with unnamed Swiss bank accounts – More than 100 Australians have been identified as “high risk” and will be subject to ATO investigation.
  • CGT main residence exemption to disappear for non-residents – A Bill that is currently before Parliament proposes to change who can qualify for the CGT main resident exemption.
  • Residential rental property travel expense deduction changes – Individuals, SMSFs and “private” trusts and partnerships can longer claim tax deductions for non-business travel costs related to their residential rental properties.
  • Government to increase civil penalties for white-collar crime – the Federal Government has agreed to increase the civil penalties for corporate and financial misconduct, for both individuals and bodies corporate.
  • Businesses, get ready: GST on low value goods – From 1 July 2018, GST will be imposed on the supply low value goods from outside of Australia to Australian consumers.
  • Financial Complaints Authority takes shape – The Federal Minister for Revenue and Financial Services has announced the authorisation of the new financial dispute resolution scheme, the Australian Financial Complaints Authority (AFCA).
  • Banking Royal Commission wraps up evidence on financial advice – The Royal Commission has adjourned until 21 May 2018.
  • ATO assessments issued for excess super pension balances – The ATO warns that SMSF members may receive an ETB assessment even if they didn’t receive an ETB determination.

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KBH PartnersMAY 2018 Report

APRIL 2018 Report

  • ATO embarking on e-Audits – The ATO has published information about the “e-Audit” technology it uses as part of its tax compliance activities.
  • Court finds pay-as-you-go amounts “withheld” from salary payments – A court has ruled that pay-as-you-go amounts were “withheld” from a taxpayer’s salary, despite the amounts never being remitted to the ATO by her employers.
  • “Transition to retirement” pensions to become simpler – The government will simplify the transfer of transition to retirement income streams (TRISs) on the death of a pensioner.
  • ATO releases latest small business benchmarks – The ATO has released its latest small business benchmarks, providing over 100 different industries with average cost of sales and average total expenses.
  • Capital gains tax withholding: updated information for trustees – The ATO has released guidance for trusts and superannuation funds about applying to the ATO for a clearance certificate for the purposes of the foreign resident capital gains tax withholding regime.
  • Goods and services tax on low-value imported goods – From 1 July 2018, goods and services tax will apply to some offshore supplies of goods valued at $1,000 or less that are purchased by consumers and brought into Australia.
  • Superannuation rates and thresholds for 2018–2019 – We summarise some of the key superannuation rates and thresholds for the upcoming financial year.
  • Super guarantee: ATO compliance approach to non-payment – The ATO has released a fact sheet explaining its compliance approach to employers who fail to meet their superannuation guarantee obligations.
  • Single Touch Payroll reporting: ATO urges employers to get ready – The ATO is urging employers with 20 or more employees to start preparing now for the Single Touch Payroll (STP) reporting regime.

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KBH PartnersAPRIL 2018 Report

MARCH 2018 Report

  • Bill to implement housing affordability CGT changes – As part of the 2017–2018 Budget, the Federal Government announced a range of CGT reforms to reduce pressure on housing affordability.
  • Changes to small business CGT concessions – Treasury has released draft legislation to make sure that only small business taxpayers can access the small business CGT concessions.
  • Bill to change residential property GST arrangements – A Bill has been introduced to require buyers of new residential premises and new residential subdivisions to pay the related GST directly to the ATO.
  • Moving to combat the black economy – The Government has accepted a number of the Black Economy Taskforce’s recommendations, and has introduced a Bill into Parliament to implement them.
  • Corporate tax avoidance: latest ATO targets – The ATO has provided an update on its latest focus areas and the compliance projects it is undertaking to reduce corporate tax avoidance.
  • Social security means testing of lifetime retirement income streams – The Department of Social Services has released its proposed means testing rules for pooled lifetime retirement income streams.
  • ATO now issuing excess transfer balance determinations – The ATO is now sending out excess transfer balance determinations to individuals who have exceeded the superannuation transfer balance cap.
  • Windfarm grant was an assessable recoupment – The Full Federal Court has held that a Commonwealth grant for establishing a windfarm was an assessable recoupment.

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KBH PartnersMARCH 2018 Report

FEBRUARY 2018 Report

  • ATO guidelines: profit allocation within professional firms – The guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements.
  • Housing affordability measures now law – legislation has been passed to implement the First Home Super Saver Scheme and downsizing contribution exemption.
  • Fringe benefits tax: employees’ private use of vehicles – The ATO has issued employer guidance on determining an employee’s private use of a vehicle.
  • Tax consequences of trust vesting – The ATO has issued a ruling on trust vesting, including changing a trust’s vesting date and the CGT and income tax consequences of vesting.
  • Disclosing business tax debt information to credit agencies – Draft legislation and a draft legislative instrument have been released to authorise the ATO to disclose business tax debt information to registered credit reporting bureaus.
  • Taxing employee share scheme dividend equivalent payments – The ATO has determined that dividend equivalent payments under an ESS are assessable as employee income when received for or in connection with services provided as an employee.
  • Superannuation integrity changes – The Government has released a consultation paper and exposure draft legislation to give effect to super taxation integrity measures announced in the 2017–2018 Federal Budget.
  • Guidance for SMSFs on transfer balance reporting – The ATO has released guidance on SMSF reporting of events affecting their members’ transfer balance accounts.

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KBH PartnersFEBRUARY 2018 Report

DECEMBER 2017 REPORT

  • Consultation paper: combating phoenix activities – The Federal Government has released a consultation paper proposing company and tax law reforms to combat phoenix activities.
  • New passive income test for lower corporate tax rate – The Federal Government has introduced a Bill to put a passive income test in place for corporate tax entities.
  • ATO guidance: what is “carrying on a business”? – The ATO has issued a draft taxation ruling to explain the factors it will consider when deciding whether a company “carries on a business”.
  • Total super balances and pension transfer balance account reports – The ATO has agreed to modify the reporting obligation for total super balances, and has set out when super providers and life insurance companies must lodge transfer balance account reports.
  • Fringe benefits tax: should an Uber be treated as a taxi? – The ATO is now examining whether Uber trips should be eligible for the “taxi travel” FBT exemption.
  • Tax treatment of long-term construction contracts – the ATO has explained what accounting methods taxpayers can use for long-term construction projects.
  • Foreign equity distributions to corporate entities – Two recent taxation determinations deal with how the foreign equity distribution rules apply where the recipient is a corporate partner in a partnership or a corporate beneficiary of a trust.

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KBH PartnersDECEMBER 2017 REPORT

NOVEMBER 2017 REPORT

  • Compensation for ATO systems outages – The ATO has advised about how it will assess claims for compensation following its recent systems outages.
  • Small business restructure rollover – The ATO is proposing to modify how the small business restructure rollover operates.
  • Tax cut closed off for passive investment companies – The Government has released exposure draft legislation to deny access to the lower corporate tax rate of 27.5% for companies with predominantly passive income.
  • Identification numbers for directors – The Government has announced a package of reforms to combat phoenix activities, including the introduction of a Director Identification Number.
  • Legislation for First Home Super Saver scheme and downsizer super contributions – A new Bill to enact these measures has been introduced into Parliament.
  • No GST on digital currency – The GST Act is being amended to ensure that supplies of digital currency receive equivalent GST treatment to supplies of money.
  • New financial and superannuation complaints authority – The Australian Financial Complaints Authority will resolve disputes about products and services provided by financial firm.
  • Superannuation guarantee – The Government has announced a crackdown on employer non-compliance and new legislation will prevent employers using an employee’s salary sacrifice contributions to reduce the employer’s minimum contributions.

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KBH PartnersNOVEMBER 2017 REPORT