Forthcoming tax law changes
The government has introduced a number of legislative changes, some related to previously prorogued measures when the election was called, and others to implement various election promises. Business related measures introduced include a reporting regime for electronic platform operators in the sharing economy, giving the ATO power to direct an entity to complete an approved record-keeping course in lieu of penalties, and enabling small businesses to apply to the AAT for an order staying the operation or implementation of certain ATO decisions.
The new Labor government has wasted no time in introducing a raft of legislative changes in relation to previously abandoned measures and to implement its various election promises covering businesses, individuals and superannuation.
Businesses
The reporting regime for electronic platform operators in the sharing economy has made a return appearance. This measure would require any electronic platform operators that facilitates a supply that is connected to Australia for a consideration between the entities (other than when ownership of goods is permanently changed) to report information about the transaction to the ATO. This was originally a recommendation of the Black Economy Taskforce to reduce tax compliance risks and was introduced again but not passed during the previous government’s term. When passed, it is expected to apply to the supply of taxi travel and short-term accommodation from 1 July 2023, and to all other transactions from 1 July 2024.
Within the same Bill, the government also revived a lapsed measure to enable small business entities to apply to the Small Business Taxation Division of the AAT for an order staying the operation or implementation of certain decisions of the Commissioner that are being reviewed by the AAT (including debt recovery action). This measure seeks to reduce the cost to small businesses of having to apply for a stay and will apply to applications for review made on or after the day the Bill receives Royal Assent.
Another lapsed measure which has been brought back is to give the ATO power to direct a business entity to complete an approved record-keeping course in lieu of imposing penalties for failing to comply with record-keeping obligations in some circumstances. The Commissioner will be able to issue a tax-records education direction to an entity 3 months after the day the measure receives Royal Assent.
Individuals
For individuals, the removal of the $250 threshold to claim self-education expenses is back on the cards. While self-education expenses are generally deductible if there is a sufficient connection with the taxpayer’s income producing activities, the amount of the deduction is currently limited so that only the excess over $250 is deductible. When passed by Parliament, this measure will apply from the 2022-23 income year. This measure was previously introduced during the last government but the Bill was put on hold when the Senate was prorogued due to the election.
Superannuation
The measure to give effect to the government’s election promise of reducing the age of eligibility to make downsizer contributions into superannuation from 60 to 55, has been introduced. Note that all other eligibility requirements to make the downsizer contribution will remain the same. According to the government, this will allow greater flexibility for older Australians to contribute to their superannuation and may encourage individuals to downsize sooner to a home that better suits their needs, thereby freeing up the stock of larger homes for families. It will apply to contributions made from the first quarter after Royal Assent to the Bill.
The government has also reintroduced the measure to make amendments associated with the transition of superannuation-related complaints from the Superannuation Complaints Tribunal (SCT) to the Australian Financial Complaints Authority (AFCA), including the transfer of records and documents. It will apply the day after the measure receives Royal Assent.
Stay in the loop
These measures are just the beginning for this newly elected government. With an October Budget on the horizon, there are sure to be many legislative and other changes imminent.
Follow us on LinkedIn to stay informed of new developments.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.