Coronavirus: Government announces new tax measures
The Government has announced a number of economic responses to the Coronavirus (or ‘COVID-19’) pandemic, including economic stimulus packages worth billions of dollars.
Some of the key tax measures include:
Eligible employers will be able to claim a subsidy of $1,500 per fortnight, per eligible employee, from 30 March 2020 (with payments commencing from the first week of May 2020), for a maximum period of six months.
ATO’s support measures to assist those affected by COVID-19
The ATO will also implement a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak.
Options available to assist businesses impacted by COVID-19 include:
However, note that employers will still need to meet their ongoing super guarantee obligations for their employees.
Editor: Please contact our office if you need any advice or assistance during this difficult time.
New laws can make directors personally liable for GST
The government recently passed new legislation designed to strengthen laws to “crack down on illegal phoenixing activity by dodgy business operators who try to avoid their obligations to their customers, employees and creditors.”
In particular, the changes allow the ATO to collect estimates of anticipated GST liabilities, and make company directors personally liable for their company’s GST liabilities in certain circumstances (basically by including these liabilities in the director penalty notice regime).
Importantly, the expansion of the director penalty notice regime to include GST liabilities will commence from 1 April 2020.
New super guarantee amnesty
On 6 March 2020, the government introduced a superannuation guarantee (‘SG’) amnesty.
This amnesty allows employers to disclose and pay previously unpaid super guarantee charge (‘SGC’), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 (double SGC) penalty.
In addition, payments of SGC made to the ATO after 24 May 2018 and before 7 September 2020 will be tax deductible.
Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again.
Employers who come forward from 6 March 2020 need to apply for the amnesty.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG.
New vacant land tax measures
A new ‘vacant land’ measure limits the deductibility of costs incurred on or after 1 July 2019 (i.e., from the 2020 income year) that relate to holding vacant land, even if the land in question was first held before that date.
Importantly, however, the new provisions include (amongst other exceptions) a ‘carrying on a business’ exception. This exception means that the limitations will not apply to the extent that the ‘vacant land’ is used, or available for use in carrying on a business, including a business carried on by either the taxpayer (i.e., the owner of the land) or by a specified related entity.
Further, an additional business exception also applies where ‘vacant land’ is leased at arm’s length for use in any business (i.e., not just a business of the taxpayer or of a related entity).
In addition, land is considered to be “available for use” if it is held for future use in a business currently carried on by the taxpayer or is made available to a specified related entity for future use in a business that entity currently carries on.
ATO on property investments
The ATO has reminded taxpayers in a property business or thinking about investing in property that there are things they should know, such as:
The ATO says taxpayers with property should keep accurate and complete records where they:
In addition, when it’s time to lodge, taxpayers should remember:
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
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