Further company tax cuts deferred (for now . . .)
The Government has decided not to put the
Treasury Laws Amendment (Enterprise Tax Plan
No. 2) Bill 2017 to a vote in the Senate ... for the
present point in time (it had already passed the
House of Representatives without amendment).
The Bill aims to progressively extend the lower 27.5% corporate tax rate to all corporate tax entities by the 2023/24 financial year, and further reduce the corporate tax rate in stages so that, by the 2026/27 financial year, the corporate tax rate for all entities would be 25%.
Editor: Parliament resumes on 13 August 2018, coincidentally after some by-elections have taken place on 28 July . . .
Opposition confirms it won't repeal already legislated company tax cuts
Editor: Just in case the tax cut situation wasn't confusing enough, the leader of the Opposition, Bill Shorten, announced at a doorstop interview that, if elected, Labor would repeal the existing company tax cuts for companies with turnover between $10 and $50 million.
However, a few days later, after a Shadow Cabinet meeting, Mr Shorten confirmed that a Labor government would not touch business tax cuts that have already been legislated, due to the uncertainty that would generate.
However, he reiterated that Labor does not support the further tax cuts for larger companies that may be legislated in the future.
Single Touch Payroll Update
Editor: Single Touch Payroll (STP) officially
commenced for larger employers on 1 July 2018,
and the ATO has provided some further guidance
for affected entities.
The ATO is writing to employers who started reporting through STP before 1 July 2018, providing them with information about how their employees' payment summary for 2017/18 may change with STP, including the following:
- They are not required to provide their employees with payment summaries for the information they report through STP (although they may choose to provide payment summaries for the first year of STP reporting).
- 'Income statements' will replace payment summaries.
- Employees' income statements are available through pre-filling and myGov.
- The income statement has three categories: 'Tax ready', 'Not tax ready' and 'Year-to-date'. Only 'tax ready' income statements are complete and will be available through pre-filling.
- Income statements may not be tax ready until 14 August this year. Employers have until this date to finalise their STP data.
Editor: The ATO has also recognised that some
employers may not have been ready to start STP
reporting from 1 July 2018, and these employers (or
their tax agent) may be able to apply for a deferral.
For example, employers that live in an area where there is no internet connection, or where the connection or service is intermittent or unstable, can apply for a deferral or even (in very limited circumstances) an exemption.
Please contact our office if you would like our assistance in this regard.
Cents per Km Deduction Rate for Car Expenses from 1 July 2018
The Commissioner of Taxation has determined
that the rate at which work-related car expense
deductions may be calculated using the cents per
kilometre method is 68 cents per kilometre for the
income year commencing 1 July 2018 (up from 66
cents per kilometre).
Suburban scammers pushing illegal early access to super
The ATO has become aware of people in some
suburban areas of major cities attempting to
encourage others to illegally access their super
early (generally for a fee) to help them to purchase
a car, to pay debts, to take a holiday, or to provide
money to family overseas in need.
The ATO advises that anyone approached by someone telling them that they can access their super early, or anyone hearing about it from family, friends or work colleagues:
- should not sign any documents nor
- provide them with any personal details;
- stop any involvement with the scheme, organisation or the person who approached them; and
- seek advice from a professional advisor or the ATO.
Transacting with cryptocurrency
Editor: With interest in cryptocurrencies (such as
Bitcoin) increasing, the ATO has issued guidance
regarding various tax consequences of transactions
Any capital gains made on the disposal of a cryptocurrency (including using the cryptocurrency or converting it to Australian dollars) may be taxed, although certain capital gains or losses from disposing of a cryptocurrency that is a 'personal use asset' are disregarded.
Cryptocurrency may be a personal use asset if it is kept or used mainly to purchase items for personal use or consumption (but the longer the period of time that a cryptocurrency is held, the less likely it is that it will be a personal use asset).
Note: If the cryptocurrency is held as an investment, the taxpayer will not be entitled to the personal use asset exemption but, if they hold the cryptocurrency as an investment for 12 months or more, they may be entitled to the CGT discount.
If the disposal is part of a business the taxpayer carries on, the profits made on disposal will be assessable as ordinary income and not as a capital gain.
Editor: The ATO has also provided guidance regarding the tax consequences of the loss or theft of cryptocurrency, as well as of 'chain splits'.
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.