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We are Accountants, Tax Agents and Business Advisors
The ATO has finalised Practical Compliance Guideline PCG 2021/4 Allocation of professional firm profits – ATO compliance approach that sets out the ATO’s compliance approach to the allocation of profits by individual professional practitioners (IPPs) within professional firms. The Guideline also provides a risk assessment framework that assists IPPs to self-assess their risk.
This Guideline replaces the ATO’s Assessing the Risk: Allocation of profits within professional firms guidelines and Everett Assignment web materials, which were suspended in December 2017. Transitional arrangements apply for IPPs whose arrangements were low risk under the suspended guidelines but are moderate or high risk under this Guideline.
External Links:
Practical Compliance Guideline - PCG 2021/4 - Allocation of professional firm profits - ATO compliance approach
The Treasurer delivered Australia’s 2020-21 Mid-Year Economic and Fiscal Outlook (MYEFO) The 2020-21 MYEFO includes $6.3 billion in new policy measures in response to the COVID-19 pandemic, bringing the Government’s direct economic and health support announced this year to $267 billion.
The 2020-21 MYEFO measures build on the substantial commitments announced in the 2020-21 Budget, including:
The underlying cash balance in 2020-21 is expected to be a deficit of $197.7 billion, equivalent to 9.9 per cent of GDP. This is expected to improve over the forward estimates to a deficit of $66.0 billion in 2023-24 and to further improve over the medium term to a projected deficit of $45.7 billion or 1.4 per cent of GDP in 2030-31. The $15.9 billion improvement in the underlying cash balance for 2020-21 since the Budget primarily reflects the faster-than-expected rebound in the economy.
External Links :
2020-21 Mid-Year Economic and Fiscal Outlook
The ATO has finalised PCG 2021/5 Imported hybrid mismatch rule - ATO's compliance approach that contains practical guidance as to the ATO’s assessment of the relative levels of tax compliance risk associated with imported hybrid mismatches addressed by Subdivision 832-H of the Income Tax Assessment Act 1997 . The Guideline sets out the Commissioner’s approach to reviewing whether a taxpayer has undertaken reasonable enquiries in relation to the imported hybrid mismatch rule for non-structured arrangements. It also sets out the Commissioner’s expectation that, where a taxpayer is party to a structured arrangement, the taxpayer will have, or should be in a position to access, the relevant information. This Guideline also contains a risk assessment framework.
External Links:
Practical Compliance Guideline - PCG 2021/5 - Imported hybrid mismatch rule - ATO's compliance approach
The ATO has released a fact sheet for employers on the tax and superannuation consequences of providing incentives or rewards to employees who get vaccinated against COVID-19.
Specifically, the ATO reminds employers that they have PAYG withholding and super obligations in relation to cash payments and paid leave to employees for getting vaccinated. Employers should contact the ATO without delay if they have failed to withhold tax, and the ATO will consider remitting penalties.
Non-cash benefits to employees such as vouchers and competition prizes may attract FBT (unless an exemption or reduction applies). The provision or payment of transport to and from the vaccination centre is exempt from FBT. There are no FBT consequences if benefits are provided to the general public (eg discounts for the vaccinated).
The ATO has published a range of information on COVID-19 and fringe benefits tax for businesses whose fringe benefits tax obligations may have changed for benefits provided to employees due to COVID-19.
External Links :
COVID-19 vaccination incentives and rewards - your tax and super obligations
COVID-19 and fringe benefits tax
DGRs that were endorsed under one of the 11 amended DGR categories prior to 14 December 2021, need to check they meet the changed requirements. From 14 December 2021 all general deductible gift recipient (DGR) categories are required to be registered as a charity including non-government DGRs. The ATO has produced a DGR table of categories able to obtain DGR endorsement.
DGRs not already a registered charity will need to take steps to register with the Australian Charities and Not-for-profits Commission (ACNC) and transitional periods may apply.
External Links:
Deductible Gift Recipient eligibility has changed
DGRs required to be a registered charity
Non-government DGRs required to register as a charity
DGR table
The Inspector-General of Taxation and Taxation Ombudsman (IGTO), Ms Karen Payne, has announced three new review investigations for 2022:
The full terms of reference for all three review investigations can be found on the IGTO’s website.
In addition to a summary of the three new investigations, Edition 18 of the IGTO’s newsletter, “IGoT News”, provides details of completed reports and thought leadership pieces, key survey data and an update on the IGTO’s tax complaint investigation service.
External Links:
IGTO announces three new review investigations
Current Investigations
IGoT News
The Treasurer announced on Monday 13 December 2021 that the SME Loan Guarantee Scheme will be extended by 6 months to 30 June 2022.
This extension keeps the same terms and conditions as currently operate, with the exception that the Government will reduce its loan guarantee from 80% to 50%. the taxpayer will have, or should be in a position to access, the relevant information. This Guideline also contains a risk assessment framework.
External Links:
Extending support for small and medium sized businesses
In a release on 11 December 2021, the Government highlighted its deregulation agenda and its priorities. The Workplan includes:
Send your experiences and suggestions to policy.advocacy@cpaaustralia.com.au.
External Links :
A national approach to reducing overlapping regulations
Workplan to reduce the burden of overlapping regulations
Workplan to reduce the burden of overlapping regulations
The Government has released its response to several reviews undertaken to assess the viability of Australia’s current payment system, entitled Transforming Australia’s payments system.
The reviews included a Treasury report issued on 30 August 2021, as well as two separate Parliamentary reports – the Senate Committee report on Australia as a technology and financial centre, and the Parliamentary Joint Committee Corporations and Financial Services report on Mobile payment and digital wallet financial services.
External Links:
Reforming Australia’s payments system for the digital age
Transforming Australia’s Payments System
Final report
Mobile Payment and Digital Wallet Financial Services
