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Archive for April, 2018


ATO embarking on e-Audits

18th Apr, 2018

The ATO has recently published information about the “e-Audit” technology it uses as part of its tax compliance activities. These audits involve the ATO performing computer tests on a taxpayer’s own electronic records to verify that the data is accurate and complete and that the taxpayer has complied with relevant tax laws.

If a taxpayer is selected by the ATO for an audit or review, the ATO will take a copy of the relevant records (eg data held in the taxpayer’s accounting or payroll systems) in order to perform the tests. Although the ATO has broad powers to access taxpayers’ records, the ATO takes a cooperative approach and will work with the taxpayer and their advisers.

The ATO may also use an assessment tool to rate a taxpayer’s system risks in relation to correct reporting of tax and super obligations. This can have benefits for the taxpayer because the ATO will provide them with a final report that highlights any particular compliance risks for their business and includes recommendations for addressing these issues.

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Court finds pay-as-you-go amounts “withheld” from salary payments

18th Apr, 2018

The Federal Court has ruled that pay-as-you-go (PAYG) amounts were “withheld” from a taxpayer’s salary payments so that she was entitled to a tax credit, despite the amounts never being remitted or notified to the ATO by her employers.

This case illustrates the importance of records and documentation in tax matters. The Court examined evidence such as the taxpayer’s offer of employment, payslips, bank statements and payment summaries, which suggested that the salary payments she received were “net pay” amounts (and not “gross”).

The Court noted that where an employer has not remitted PAYG withholding amounts to the ATO, this will raise questions about whether amounts were really withheld. However, adequate documentation can – as in this case – be used to prove that PAYG has in fact property to withhold an amount from the purchase price (for remission to the ATO) if the vendor is a foreign resident. This regime is designed to assist the ATO in collecting CGT payable by foreign residents.

If the vendor is an Australian resident, they must provide an ATO-issued clearance certificate to the purchaser on or before the day of settlement to ensure no withholding occurs. The ATO has released some guidance for trusts and superannuation funds about specific information they must provide when applying to the ATO for a clearance certificate. Contact our office for further assistance.

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Transition to retirement” pensions to become simpler

18th Apr, 2018

In welcome news for superannuation members, the government has announced plans to simplify the payment of transition to retirement income streams (TRISs) so that they will always be permitted to automatically revert to a dependent upon the death of the original pensioner. This is designed to address a trap in the current legislation that is causing some administrative difficulties for funds when a TRIS recipient passes away.

TIP: With greater certainty about the payment of TRISs on death, now is a good time for superannuation members to review their estate plans.

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ATO releases latest small business benchmarks

18th Apr, 2018

The ATO has released its latest small business benchmarks, providing over 100 different industries with average cost of sales and average total expenses.

These benchmarks can not only assist businesses with tax compliance (eg by prompting them to double-check their records if their expenses are outside the benchmark range for their industry), but also provide useful information to help businesses judge their performance against others in the industry.

TIP: You can access the benchmarks online or by using the ATO app. Contact our office if you wish to discuss how your business compares against industry benchmarks.

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Capital gains tax withholding: updated information for trustees

18th Apr, 2018

The foreign resident capital gains tax (CGT) withholding regime requires purchasers of Australian

Genuine redundancy and early retirement payments – tax-free amounts:  
· base amount $10,399
· service amount $5,200

Pension cap

General transfer balance cap $1,600,000
Defined benefit income cap $100,000
“Total superannuation balance” threshold $1,600,000

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Goods and services tax on low-value imported goods

18th Apr, 2018

From 1 July 2018, goods and services tax (GST) will apply to some offshore supplies of goods valued at$1,000 or less that are purchased by consumers and brought into Australia. The new rules are designed to create a more “level playing field” for local retailers.

The ATO has released a ruling covering GST registration issues for suppliers and other technical aspects of the new legislation. Notably, the existing rules about GST on imports valued above $1,000 are unchanged.

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