2020 COVID-19 JobKeeper JobMaker Superannuation Members-only

State of Tax Policy Report: July 2021

Written by Robyn Jacobson, CTA, Senior Advocate at The Tax Institute

   

Dr Julianne Jacques accepts the Tax Adviser of the Year Award, 2020

The last 18 months has been an incredibly busy time for everyone in the tax and accounting professions. Keeping up to date with changing legislation can be a challenge all of its own.

This Report sets out the status of the key tax and superannuation legislative measures you need to know about. 

If you need to keep up to date with what's happening in the world of tax, this report is an essential reference tool that saves you time and effort. It's a comprehensive breakdown of where different pieces of legislation currently are in the Parliamentary process — key reading for tax practitioners everywhere.

Status of proposed and enacted tax measures

  1. This Report includes only those measures which we consider are most relevant to our members. The full content of each Bill or Act (i.e. other schedules to the relevant Bill or Act not listed in this Report) is available by clicking on the relevant hyperlink containing the title of the Bill or Act.
  2. The selected enacted Acts listed are those that received Royal Assent during the 46th (current term of) Parliament which commenced on 2 July 2019. Parliament adjourned on Thursday, 24 June 2021, and will resume on Tuesday, 3 August 2021.
  3. Page cross-references throughout refer to the relevant page in this Report.
  4. For guidance, insights and resources on many of these measures, visit our member portal.

Income Tax Assessment Act 1936 ITAA 1936
Income Tax Assessment Act 1997  ITAA 1997
Income Tax (Transitional Provisions) Act 1997  IT(TP)A
Superannuation Guarantee (Administration) Act 1992  SGAA
Superannuation Industry (Supervision) Act 1993  SISA
Taxation Administration Act 1953 TAA

AAT  Administrative Appeals Tribunal
ABN  Australian Business Number
ALP  Australian Labor Party
AMIT  Attribution managed investment trust
APRA  Australian Prudential Regulation Authority
ATO  Australian Taxation Office
Board  Board of Taxation
CFB  Cash flow boost
CGT  Capital gains tax
CLP  Corporate limited partnership
Commissioner  Commissioner of Taxation
DGR Deductible gift recipient
DGTO Digital games tax offset
Div | Subdiv Division | Subdivision
ECPI Exempt current pension income
ESS  Employee share scheme
FBT Fringe benefits tax
FHSSS  First Home Super Saver Scheme
GDP  Gross domestic product
IAWO  Instant asset write-off
IGTO  Inspector-General of Taxation and Taxation Ombudsman
LMITO  Low and Middle Income tax offset
MIT  Managed investment trust
OBU  Offshore banking unit
PAYG 
Pay As You Go
PDV offset Post, digital and visual effects offset
PSI  Personal services income
R&D Research and development
R&DTI Research and Development Tax Incentive
s | ss
Section | Sections
SMSF  Self-managed superannuation fund
STP  Single Touch Payroll
TPB  Tax Practitioners Board

 

Key Acts enacted prior to issue of last State of Tax Policy Report: December 2020

Measure

Details of enacted Act

Start date

Personal income tax relief

Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019

  • Increases the base and maximum amounts of the low and middle income tax offset for the 2018–19 to 2021–22 income years to $255 (from $200) and $1,080 (from $530), respectively.
  • Increases the amount of the low income tax offset from the 2022–23 income year ensuring all taxpayers remain better off following the cessation of the low and middle income tax offset in 2022–23.
  • Reduces the tax payable by individuals in the 2022–23 and later income years by increasing the amount of taxable income subject to the first personal rate of income tax of 19% to include an individual’s taxable income between $18,201 and $45,000 (rather than $41,000).
  • Reduces the tax payable by individuals in the 2024–25 and later income years by lowering the second personal rate of income tax to 30% (from 32.5%).

Enacted on 5 July 2019 as Act No. 52 of 2019

(See further personal income tax relief on page 7 and page 13)

Changes to the low and middle income tax offset: 2018–19 to 2021–22 income years

Changes to income tax thresholds and the low income tax offset: 2022–23 and later income years

Changes to income tax rates: 2024–25 and later income years

CGT changes for foreign residents

Schedule 1 to the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Act 2019

Removes the entitlement to the CGT main residence exemption for foreign residents other than where certain life events occur during the period that a person is a foreign resident where that period is no more than six years.

A transitional rule ensures the amendments do not apply to a capital gain or loss from a CGT event that occurs to a dwelling if the CGT event occurs on or before 30 June 2020 and the individual held an ownership interest in the dwelling to which the CGT event relates, at all times from immediately before 7:30pm (AEST) until immediately before the CGT event happens.

Special rules apply to deceased estates.

Enacted on 12 December 2019 as Act No. 129 of 2019

CGT events that happen after 7:30pm (AEST) on 9 May 2017

Superannuation minimum drawdown rates

Schedule 10 to the Coronavirus Economic Response Package Omnibus Act 2020

Halves the minimum payment amounts for account-based pensions.

Enacted on 24 March 2020 as Act No. 22 of 2020

(See recent announcement on page 29)

2019–20 and 2020–21 financial years

Early release of superannuation

Schedule 13 to the Coronavirus Economic Response Package Omnibus Act 2020 

Allow individuals affected by the COVID-19 crisis to have up to $20,000 released from their superannuation or retirement savings account on compassionate grounds.

Each person was permitted to have up to two releases of $10,000 — one for an application made during the 2019–20 financial year and another for an application made during the 2020–21 financial year.

Applications had to be made via myGov by 11:59pm (AEDT) on 31 December 2020.

Enacted on 24 March 2020 as Act No. 22 of 2020

2019–20 and 2020–21 financial years

Cash flow boost 

Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020

Provides for the Commissioner to make CFB payments based on PAYG withholding payable under Subdivs 12-B, 12-C and 12-D of Schedule 1 to the TAA.1

Enacted on 24 March 2020 as Act No. 23 of 2020

See also Schedule 3 to the Coronavirus Economic Response Package Omnibus Act 2020 

Enacted on 24 March 2020 as Act No. 22 of 2020

Periods from March 2020 and the quarter ended March 2020 until September 2020 and the quarter ended September 2020

Improving flexibility of superannuation for older Australians

Superannuation Legislation Amendment (2020 Measures No. 1) Regulations 2020

  • Increases, from 65 to 67, the age at which the work test starts to apply for voluntary concessional and non-concessional superannuation contributions.
  • Increases the age limit for spouse contributions from 69 to 74.2

Registered on 28 May 2020 as Legislative Instrument F2020L00645.

1 July 2020

Reduction in 2020–21 PAYG instalments

Schedule 5 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020

Reduces the GDP adjustment factor (which is used to work out the amount of PAYG instalments) for the 2020–21 income year to nil in response to the economic and business conditions caused by the Coronavirus. 

Enacted on 19 June 2020 as Act No. 61 of 2020

Instalment quarters that commence on or after 1 July 2020

Cash flow boost — PSI

Schedule 6 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020

Clarifies that the CFB includes PAYG withholding payable on amounts of PSI under Div 13 in Schedule 1 to the TAA.

The measure ‘clarifies’ that PAYG withholding on PSI is eligible for the CFB rather than ‘extending’ the CFB to PSI, meaning this is not a policy change.

Enacted on 19 June 2020 as Act No. 61 of 2020 

Amendments apply to all payments of the CFB, including those for periods before the commencement of the amendments

Director identification number regime

Schedule 2 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2019

Amends the Corporations Act 2001 to introduce a director identification number requirement which will require all directors to confirm their identity. It will be a unique identifier for each person who consents to being a director.

Enacted on 22 June 2020 as Act No. 69 of 2020 

Date set by proclamation and no later than 23 June 2022

STP reporting — child support information

Schedule 2 to the Treasury Laws Amendment (2020 Measures No. 2) Act 2020

Broadens the amounts that employers can voluntarily report under the STP rules to include employer withholding of child support deductions from salary or wages and child support garnishee amounts from salary or wages that are paid to the Child Support Registrar. If employers choose to report under STP to the ATO, they do not also have to report the amounts to the Child Support Registrar.

Enacted on 3 September 2020 as Act No. 79 of 2020

On 3 February 2021, the ATO registered a legislative instrument which outlines the Commissioner’s intention for voluntary reporting to commence from 4 January 2021, with employers required to have commenced reporting via the new Phase 2 pay event by 1 January 2022.

1 July 2021

Accelerating the Personal Income Tax Plan

Schedule 1 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Reduces the tax payable by individuals in the

2020–21 and later income years by increasing the amount of taxable income subject to the:

  • first personal rate of income tax of 19% to include an individual’s taxable income between $18,201 and $45,000 (rather than from 1 July 2022); and
  • second personal rate of income tax of 32.5% to include an individual’s taxable income between $45,001 and $120,000 (rather than from 1 July 2022).

Replaces the existing low income tax offset with a new increased low income tax offset for the 2020–21 and later income years of up to $700 (instead of up to $445).

Retains the LMITO for an additional year (being the 2020–21 income year). Base amount is $255 up to a maximum of $1,080.

Enacted on 14 October 2020 as Act No. 92 of 2020

(See further extension to the LMITO on page 13)

No changes were made to the already legislated third and final stage of the Personal Income Tax Plan which will provide further personal income tax cuts from 1 July 2024.

Under the third and final stage, the tax payable by individuals in the 2024–25 and later income years will be reduced by:

  • lowering the second personal rate of income tax to 30% (from 32.5%); and
  • increasing the amount of taxable income subject to the second personal rate of income tax of 30% to include an individual’s taxable income between $45,001 and $200,000, thereby eliminating an entire tax bracket.

2020–21 and later income years

2024–25 and later income years

Temporary loss carry back

Schedule 2 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Allows corporate tax entities with an aggregated turnover of less than $5 billion to carry back a tax loss for the 2019–20, 2020–21 and 2021–22 income year and apply it against tax paid in a previous income year as far back as the 2018–19 income year.

Enacted on 14 October 2020 as Act No. 92 of 2020

(See proposed technical amendment to the loss carry back choice on page 19)

(See announcement in relation to the proposed extension of this measure on page 27)

Assessments made in the 2020–21 and 2021–22 income years3

Expanded access to small business tax concessions

Schedule 3 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Enables eligible entities with an aggregated turnover of $10 million or more but less than $50 million to access a range of small business entity tax concessions.

Enacted on 14 October 2020 as Act No. 92 of 2020

In 3 phases, from 1 July 2020, 1 April 2021 and 1 July 2021

Reforms to R&D Tax Incentive

Schedules 4–6 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 20204

Makes changes to the R&DTI, including:

 linking the R&D tax offset for refundable R&D tax offset claimants (aggregated turnover less than $20 million) to claimants’ corporate tax rate plus an 18.5 percentage point premium;

 increasing the R&D tax offset for non-refundable R&D tax offset claimants (aggregated turnover $20 million or more) with high levels of R&D intensity (attracting a premium of either 8.5 or 16.5 percentage points); and

 increasing the R&D expenditure threshold from $100 million to $150 million and making the threshold a permanent feature.

Enacted on 14 October 2020 as Act No. 92 of 2020 

1 July 20215

Making tax free certain small business grants relating to COVID-19 recovery

Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 5) Act 2020

Amends the income tax law to make payments received by eligible businesses under certain grant programs administered by a State or Territory Government or authority non-assessable non-exempt income so that these payments are not subject to income tax by the Commonwealth.

Enacted on 11 December 2020 as Act No. 118 of 2020 

2020–21 and later income years

1 Schedule 6 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020 clarifies that PAYG withholding payable under Div 13 of Schedule 1 to the TAA (about PSI) is also eligible for the CFB (see page 6).

2 The amendments made by the Superannuation Legislation Amendment (2020 Measures No. 1) Regulations 2020 do not expressly mention age 69 or age 74; however, the effect of the changes is that the age limit on spouse contributions is lifted from 69 to 74 (see the Explanatory Statement).

3 This measure is currently legislated to end on 30 June 2022, however the Government announced on 11 May 2021 as part of the Federal Budget 2021–22 that the measure will be extended by 12 months to 30 June 2023. Under the proposed amendment, an eligible entity will be able to carry back a tax loss for the 2019–20, 2020–21, 2021–22 and 2022–23 income year and apply it against tax paid in the 2018–19, 2019–20, 2020–21 or 2021–22 income year, claiming the loss carry back tax offset in the 2021, 2022 or 2023 company income tax return. Amending legislation has not yet been introduced into Parliament.

4 This Bill replaces the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 which was discharged on 9 November 2020. The measure was originally proposed to commence on 1 July 2019.

5 The Tax Institute made two joint submissions on 7 April 2020 and again on 9 June 2020 requesting the Government defer the start date of the proposed R&DTI reforms to 1 July 2021.

 

Key Acts enacted since issue of last State of Tax Policy Report: December 2020

Measure

Details of enacted Act 

Start date

Reuniting more superannuation 

Treasury Laws Amendment (Reuniting More Superannuation) Act 2021

Amends the SISA and other laws to facilitate the closure of eligible rollover funds by 30 June 2021 and allow the Commissioner to reunite amounts the ATO receives from eligible rollover funds with a member’s active account.

Enacted on 22 March 2021 as Act No. 24 of 2021 

23 March 2021

Bring forward non-concessional contributions cap for those aged 65 and 66 

Treasury Laws Amendment (More Flexible Superannuation) Act 2021

Extends the bring forward rule by enabling individuals aged 65 and 66 to make up to three years of non-concessional contributions under the bring forward rule.

Enacted on 22 June 2021 as Act No. 45 of 2021

1 July 2020

Your Future, Your Super 

Treasury Laws Amendment (Your Future, Your Super) Act 2021

  • Schedule 1 to the Act amends the SGAA to limit the creation of multiple superannuation accounts for employees who do not choose a superannuation fund when they start a new job.
  • Schedule 2 to the Act amends the SISA to require APRA to conduct an annual performance test for MySuper products and other products to be specified in regulations.
  • Schedule 3 to the Act amends the SISA to require each trustee, or each director of a corporate trustee, of a registrable superannuation entity and each trustee of a SMSF to perform the trustee’s duties and exercise the trustee’s powers in the best financial interests of the beneficiaries.

Enacted on 22 June 2021 as Act No. 46 of 2021

Schedule 1: Employment that starts on or after 1 July 2021

Schedule 2: MySuper: on and after 1 July 2021 

Other products specified in the regulations: on and after 1 July 2022.

Schedule 3: 1 July 2021

SMSF membership limit 

Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021

Increases the maximum number of allowable members in SMSFs and small APRA funds from four to six.6

Enacted on 22 June 2021 as Act No. 47 of 2021 (Bill introduced in the Senate) 

1 July 2021

Medicare levy and Medicare levy surcharge income thresholds 

Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 3) Act 2021

Implements the Federal Budget 2021–22 measure to increase the Medicare levy low-income thresholds.

In particular, amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge — Fringe Benefits) Act 1999 to increase:

  • the Medicare levy low-income thresholds for individuals and families (along with the dependent child/student component of the family threshold) in line with movements in the CPI;
  • the Medicare levy low-income thresholds for individuals and families eligible for the seniors and pensioners tax offset (along with the dependent child/student component of the family threshold), in line with movements in the CPI; and
  • the Medicare levy surcharge.

Enacted on 29 June 2021 as Act No. 61 of 2021 

2020–21 income year and later income years

Family Home Guarantee 

Schedule 2 to the Treasury Laws Amendment (2021 Measures No. 3) Act 2021

Implements the Family Home Guarantee measure from the Federal Budget 2021–22.

In particular, amends the National Housing Finance and Investment Corporation Act 2018 to improve housing outcomes for Australians by assisting earlier access to the housing market by single parents with dependants.

Enacted on 29 June 2021 as Act No. 61 of 2021 

1 July 2021

Payments to Thalidomide survivors

Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 3) Act 2021

Amends the ITAA 1997 and other laws to ensure that annual and lump sum payments made by the Commonwealth to thalidomide survivors are exempt from income tax and do not count as income for the purposes of any income support payments.

Enacted on 29 June 2021 as Act No. 61 of 2021 

1 July 2021

Recovery grants for 2021 floods and storms

Schedule 4 to the Treasury Laws Amendment (2021 Measures No. 3) Act 2021

Amends the ITAA 1997 to make disaster recovery grant payments in relation to the storms and floods that occurred in February and March 2021

non-assessable non-exempt income.

Enacted on 29 June 2021 as Act No. 61 of 2021 

Payments made in the 2020–21 and later income years

FBT exemption to support retraining and reskilling

Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021

Amends the Fringe Benefits Tax Assessment Act 1986 to provide employers with an exemption from FBT if they provide training or education to a redundant, or soon to be redundant, employee for the purpose of assisting that employee to gain new employment.

Enacted on 30 June 2021 as Act No. 72 of 2021 

Benefits provided on or after 2 October 2020

Junior minerals exploration incentive extension 

Schedule 2 to the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021

  • Extends the operation of the junior minerals exploration incentive in Div 418 of the ITAA 1997 for a further four years to continue to encourage mineral exploration companies to undertake greenfields minerals exploration in Australia.
  • Includes a reporting requirement for mineral exploration companies where no exploration investment has occurred to enable unused exploration credits to be identified earlier and reallocated.

Enacted on 30 June 2021 as Act No. 72 of 2021 

2021–22 to 2024–25 income years (inclusive) 

Exempting granny flat arrangements from CGT 

Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021

Amends the CGT provisions in the ITAA 1997 to provide a targeted CGT exemption for CGT events that occur on entering into, varying or terminating formal written arrangements under which an older person or person with a disability acquires, varies or disposes of a granny flat interest.

The exemption will operate by providing that no CGT event arises on entering into, varying or terminating a granny flat arrangement if the arrangement satisfies the requirements of the provisions.

The amendments ensure that CGT consequences are not an impediment to formalising granny flat arrangements and seek to reduce the risk of financial abuse and exploitation of older Australians and other vulnerable people.

Enacted on 30 June 2021 as Act No. 72 of 2021 

1 July 2021

New Zealand sports teams members and support staff 

Schedule 5 to the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021

Amends the International Tax Agreements Act 1953 to disregard days spent in Australia due to COVID-19 by NZ sportspersons on teams participating in cross-border competitions and their support staff in determining whether income derived from such competitions is taxable in Australia.

These amendments preserve the uniquely targeted outcome ordinarily achieved by Article 17(3) of the NZ Convention for NZ sporting professionals and their support staff, in circumstances affected by COVID-19.

Enacted on 30 June 2021 as Act No. 72 of 2021 

From the start of the 2020–21 income year

Low and Middle Income tax offset 

Schedule 6 to the Treasury Laws Amendment (2021 Measures No. 4) Bill 2021

Amends the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 to make the Low And Middle Income tax offset available in the 2021–22 income year, with the offset now ceasing to be available in the 2022–23 income year and later income years.

Enacted on 30 June 2021 as Act No. 72 of 2021 

2021–22 income year

Tax-free treatment of certain small business grants relating to the Coronavirus recovery 

Schedule 1 to the Treasury Laws Amendment (COVID-19 Economic Response) Bill 2021

Amends the income tax law to extend the concessional tax treatment of payments received by eligible businesses under eligible COVID-19 recovery grant programs administered by a State or Territory Government (or a State or Territory authority).

Enacted on 30 June 2021 as Act No. 71 of 2021 

1 July 2021

COVID-19 Disaster Payment: disclosure of tax information to Services Australia 

Schedule 2 to the Treasury Laws Amendment (COVID-19 Economic Response) Bill 2021

Amends the tax secrecy provisions in the TAA to allow protected information to be disclosed to Services Australia for the purposes of administering the COVID-19 Disaster Payment.

Enacted on 30 June 2021 as Act No. 71 of 2021 

1 July 2021

6 This measure was previously contained in Schedule 1 of the Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 which proposed to increase the maximum number of allowable members in SMSFs from four to six from 1 July 2019. However, that Bill was amended as it progressed through Parliament, and Schedule 1 was omitted in its entirety from that Bill before it was enacted.

Tax depreciation incentive Acts

Details of enacted Act 

Start date

Instant asset write-off

Schedule 1 to the Coronavirus Economic Response Package Omnibus Act 2020 

  • Increases the cost threshold below which small business entities can access an immediate deduction for depreciating assets and certain related expenditure from $30,000 to $150,000.
  • Allows entities with an aggregated turnover of $10 million or more but less than $500 million (up from the existing cap of $50 million) to access the IAWO.
  • Makes the IAWO available for depreciating assets and certain related expenditure costing less than $150,000.

Enacted on 24 March 2020 as Act No. 22 of 2020 

12 March 2020 to 30 June 20207

Backing Business Investment incentive 

Schedule 2 to the Coronavirus Economic Response Package Omnibus Act 2020

Allows businesses with aggregated turnovers of less than $500 million to deduct capital allowances for depreciating assets at an accelerated rate (50% in the first year).

Enacted on 24 March 2020 as Act No. 22 of 2020 

12 March 2020 to 30 June 2021

Extending the instant asset write-off 

Schedule 4 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020

Allows businesses with an aggregated turnover of less than $500 million to immediately deduct the cost of a depreciating asset where the asset is purchased for less than $150,000 and is first used or installed ready for use for a taxable purpose by 31 December 2020.

This extends the $150,000 IAWO by six months which otherwise would have ended on 30 June 2020.

Enacted on 19 June 2020 as Act No. 61 of 2020

1 July 2020 to 31 December 2020

Temporary full expensing of depreciating assets 

Schedule 7 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Allows businesses with an aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciating assets (including improvements to these assets).

Enacted on 14 October 2020 as Act No. 92 of 2020

(See announcement in relation to the proposed extension of this measure on page 26)

Depreciating assets first held, and first used or installed ready for use, for a taxable purpose at or after 7:30pm on 6 October 2020 to 30 June 20228

Temporary full expensing of depreciating assets — amendments 

Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020

Amends the Temporary full expensing and Backing Business Investment provisions in the income tax law to provide greater flexibility for entities to access the concessions by:

  • providing an alternative mechanism9 to the existing test for working out if the $5 billion threshold applies to qualify for the Temporary full expensing measure (see page 19); and
  • allowing entities to opt out of Temporary full expensing and the Backing Business Investment incentives on an asset-by-asset basis.

Schedule 1 to the Bill also clarifies the intended operation of Temporary full expensing by ensuring a balancing adjustment event occurs if a depreciating asset has its decline in value worked out under the Temporary full expensing provisions and, in a later income year, the asset no longer meets the test regarding its use or its location in Australia.

Enacted on 17 December 2020 as Act No. 141 of 2020

1 January 202110

7 Schedule 4 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020 extended the $150,000 IAWO by six months to 31 December 2020 (see page 15).

8 This measure is currently legislated to end on 30 June 2022, however the Government announced on 11 May 2021 as part of the Federal Budget 2021–22, that the measure will be extended by 12 months to 30 June 2023. Amending legislation has not yet been introduced into Parliament.

9 Under the investment test, the entity must have a minimum total cost of more than $100 million of depreciating assets for the 2016–17 to 2018–19 income years (combined).

10 While these amendments commence prospectively, they apply for a fixed period in relation to the 2019–20 and 2020–21 income years for the backing business investment provisions, and also for a fixed period for the 2020–21 and 2021–22 income years for the temporary full expensing measure: para 1.41 of the Explanatory Memorandum to the Bill.

Bills before Parliament

*Status of Bill at adjournment of Parliament on 24 June 2021

Measure 

Details of Bill before Parliament

Proposed start date

Deductible gift recipients 

Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021

Amends the ITAA 1997 to require a fund, authority or institution to, as a precondition for DGR endorsement, be:

  • a registered charity; or
  • an Australian government agency; or
  • operated by a registered charity or an Australian government agency.

Introduced into the House of Representatives on 17 March 2021

*Before the House of Representatives

 3 months after the date the enabling legislation receives Royal Assent11

Offshore banking units 

Schedule 2 to the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021

Ends Australia’s OBU regime to:

  • remove the concessional tax treatment for OBUs;
  • remove the interest withholding tax exemption; and
  • close the regime to new entrants by removing the Minister’s ability to declare or determine an entity to be an OBU.

Introduced into the House of Representatives on 17 March 2021

*Before the House of Representatives 

Changes to the concessional tax treatment is removed from the 2023–24 income year

The withholding tax changes apply from 1 January 2024

Ending JobKeeper profiteering 

This Private Member’s Bill12 the Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering) Bill 2021, proposes to amend the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to:

  • delay the ability of certain entities to claim any GST input credits for 10 years, or until they pay the amount of JobKeeper they received equal to the amount of profits made and/or executive bonuses paid during the financial year period in which they received the JobKeeper payment. These entities do not include businesses with an annual turnover of less than $50 million; and
  • require the ATO to publish a list of all entities in receipt of JobKeeper payments, and how much they received, excluding those with an annual turnover of less than $50 million.

On 24 June 2021, the Bill was referred to the Senate Economics Legislation Committee for inquiry and report by 20 August 2021 (see page 32).

Introduced into the Senate on 21 June 2021

*Before the Senate 

The day after the enabling legislation receives Royal Assent

Australian Screen Production Incentive Reforms 

Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021

Amends Div 376 of the ITAA 1997 to increase the producer offset for films that are not feature films released in cinemas to 30%13 of total qualifying Australian production expenditure, and to make various threshold and integrity amendments across the three screen tax offsets14.

Introduced into the House of Representatives on 24 June 2021

*Before the House of Representatives 

Films commencing principal photography on or after 1 July 2021 in respect of the amendments to the location offset and producer offset

Films commencing post, digital and visual effects production on or after 1 July 2021 in respect of the PDV offset

Loss carry back choice: technical amendment 

Part 1 of Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021

Inserts s 160-16 into Div 160 of the ITAA 1997 to clarify the mechanism through which an entity may change its loss carry back choice.

The amendment will ensure there is a clear mechanism through which entities may change their loss carry back choice. This is consistent with the broader intention of the regime which is designed to ensure entities have greater flexibility in utilising tax losses.

A changed loss carry back choice applies as if it was always the entity’s choice. That is, it takes effect from the day the original choice was made. (For further information, see page 8)

Introduced into the House of Representatives on 24 June 2021

*Before the House of Representatives 

The day after the enabling legislation receives Royal Assent

Temporary full expensing: technical amendment 

Part 1 of Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021

Amends s 40-157 of the IT(TP)A to clarify that, in working out the cost of a depreciating asset that is capital works for the purpose of calculating an entity’s total cost of investment for the 2016–17 to 2018–19 income years, ss 40-45 and 40-215 of the ITAA 1997 are disregarded.

This clarification ensures the investment test interacts appropriately with the existing provisions in Div 40 of the ITAA 1997.

The amendment applies to taxpayers who rely on ss 40-160 and 40-170 of the IT(TP)A when working out the decline in value of an asset at or after 2020 budget time (consistent with the temporary full expensing regime). (For further information, see page 16)

Introduced into the House of Representatives on 24 June 2021

*Before the House of Representatives 

The day after the enabling legislation receives Royal Assent

Low pool value

Part 2 of Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021

Amends s 328-180(6) of the IT(TP)A to correct a typographical error and ensure the law refers to ‘low pool value’ (rather than ‘low value pool’). 15

Introduced into the House of Representatives on 24 June 2021

*Before the House of Representatives 

The first day of the next quarter after the enabling legislation receives Royal Assent

11 Existing DGRs and existing DGR applicants will have an additional 12 months (and in some cases, four years) after that time before the amendments apply.

12 A Private Member’s Bill is a Bill introduced into Parliament by a member of the House of Representatives or a senator who is not acting on behalf of the government. This Bill was introduced by Tasmanian Greens Senator Nick McKim.

13 The producer offset is currently 20% across all types of eligible films that are not feature films.

14 The three tax offsets providing tax incentives for film, television and other screen production in Australia are the producer offset, the location offset and the post, digital and visual effects offset.

15 ‘Low pool value’ in s 328-210 of the ITAA 1997 refers to the balance in a general small business pool that must be fully expensed. ‘Low-value pool’ in s 40-425 of the ITAA 1997 refers to a pool to which low cost-assets (costing less than $1,000) can be allocated by entities that do not apply the small business simplified depreciation rules.

This typographical error in the heading in s 328-180(6) of the IT(TP)A — a transitional provision relating to s 328-210 — was made in 2015 when the provision was inserted by Schedule 1 to the Tax Laws Amendment (Small Business Measures No. 2) Act 2015 (Act No. 67 of 2015). This error is being corrected by Part 2 of Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021.

A similar typographical error in s 328-181(5) of the IT(TP)A — also a transitional provision relating to s 328-210 — was made when that provision was inserted by the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 (Act No. 92 of 2020). This latter error was first identified by The Tax Institute and raised with Treasury in 2020. It has been corrected by Part 2 of Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020 (Act No. 141 of 2020).

Measures not proceeding

Measure 

Details of measure not proceeding 

Proposed start date

Early release of superannuation for domestic violence victims

Originally announced on 21 November 2018 to:

  • extend the early release of superannuation for victims of domestic and family violence; and
  • improve the visibility of superannuation assets in family law proceedings.

The Government announced in the Federal Budget 2021–22 that it will not proceed with this measure. 

1 July 2020

Exposure draft legislation

At the time of writing, exposure draft legislation had been released for comment for the measures in the table below. They had not been introduced as Bills before Parliament.

Measure 

Details of exposure draft Bill 

Proposed start date

Streamlining of exempt current pension income calculations 

An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Providing choice for trustees calculating exempt current pension income was released on 21 May 2021.

The draft Bill proposes to amend the ITAA 1997 to allow superannuation trustees to choose their preferred method of calculating ECPI when they have member interests in both accumulation and retirement phases at one time, but only retirement phase interests at another time, during an income year.

1 July 202116

 

 

An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Requirement for actuarial certificates for certain superannuation funds was released on 21 May 2021. 

The draft Bill proposes to amend the ITAA 1997 to remove the requirement for superannuation trustees to obtain an actuarial certificate when calculating ECPI, where all members of the fund are fully in retirement phase for the full income year. This is achieved by permitting such funds to use the segregated method to calculate ECPI. 

1 July 2021

A sharing economy reporting regime 

An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Introducing a sharing economy reporting regime was released on 6 July 2021.

The draft Bill proposes to require sharing economy online platforms to report identification and income information regarding participating sellers to the ATO for data matching purposes for:

  • ride-sourcing and short-term accommodation; and
  • asset sharing, food delivery, tasking-based services and other services (except for transactions where only the title or ownership of goods or real property are exchanged, and transactions relating to financial supplies).

Announced on 16 December 2019 as part of the Mid-Year Economic and Fiscal Outlook 2019–20.

Discussion Paper released on 22 January 2019 which sets out a proposal to implement the Black Economy Taskforce recommendation for a sharing economy reporting regime.

The Taskforce recommended that sharing economy websites should be required to report payments made to their users to the ATO and other government agencies as appropriate (see Final Report).

1 July 2022

1 July 2023

16 These measures were announced on 2 April 2019 as part of the Federal Budget 2019–20. On 30 June 2020, the Government announced that the start date is revised from 1 July 2020 to 1 July 2021.

Discussion papers

Measure

Details of discussion paper

Proposed start date

3-year audit cycle for some SMSFs

 Consultation Paper released on 6 July 2018 which sets out a proposal to change the annual audit requirement for SMSFs to a 3-yearly requirement for SMSFs with a good compliance history and no prescribed ‘events’.

 1 July 2019

ABN reforms

Consultation Paper released on 20 July 2018 which sets out a proposal to strengthen and modernise the ABN system. To be advised

To be advised

Early release of superannuation

Treasury review of current rules governing early release of superannuation on compassionate grounds and in cases of severe financial hardship.

Consultation Paper released on 19 December 2017

Consultation Paper released on 20 November 2018

To be advised

Licensing an individual’s fame or image 

Consultation paper released on 13 December 2018 which sets out a proposal to amend the tax law to include all remuneration, including payments and non-cash benefits, provided for the commercial exploitation of a person’s fame or image in that individual’s assessable income. 

1 July 2019

Division 7A 

Proposed reforms to improve the integrity and operation of Div 7A of Part III of the ITAA 1936.

Relevant dates:

  • 18 May 2012 Assistant Treasurer (ALP) commissioned review by the Board of Taxation
  • 12 Nov 2014 Final report provided by the Board to the Government
  • 4 Jun 2015 Board’s final report released by Treasury — 15 recommendations to reform Div 7A
  • 3 May 2016 Budget announcement — proposed reforms to commence from 1 July 2018
  • 8 May 2018 Budget announcement — defer reforms to 1 July 2019
  • 22 Oct 2018 Release of Treasury Consultation paper
  • 2 Apr 2019 Budget announcement — defer reforms to 1 July 2020
  • 30 Jun 2020 Announcement — proposed reforms to apply to income years commencing on or after the date the enabling legislation receives Royal Assent

 

 Income years commencing on or after the date the enabling legislation receives Royal Assent17

Early access to superannuation for crime victims 

Consultation Paper released on 27 May 2018 which sets out a proposal to allow victims of certain crimes, such as serious violent crimes, with unpaid or partially paid compensation orders to access money held in their perpetrator’s superannuation to pay the outstanding compensation.

Announced on 17 December 2018 as part of the Mid-Year Economic and Fiscal Outlook 2018–19.

 12 months after the date the enabling legislation receives Royal Assent

Education and training expense deductions for individuals 

Discussion Paper released on 11 December 2020 which sets out a proposal to allow individuals to deduct education and training expenses they incur, where the expense is not related to their current employment.

Announced on 2 October 2020.

2 October 2020

Patent box tax concession

Discussion Paper released on 5 July 2021 which sets out a proposal to introduce a patent box tax regime to further encourage innovation in Australia by taxing corporate income derived from Australian medical and biotechnology patents at a concessional effective corporate tax rate of 17%.

Only granted patents which were applied for after the Budget announcement will be eligible.

Announced on 11 May 2021 as part of the Federal Budget 2021–22. 

1 July 2022

17 The Tax Institute has made two joint submissions on 7 April 2020 and 26 May 2020 requesting the Government defer the start date of the proposed Div 7A reforms to 1 July 2022.

Announcements

Measure

Details of announcement

Proposed start date

Removing the capital gains discount at the trust level for MITs and AMITs

Announced on 8 May 2018 as part of the Federal Budget 2018–19.

Prevents MITs and AMITs from applying the 50% capital gains discount at the trust level.

Start date was deferred from 1 July 2019 to 1 July 2020, then announcement on 30 June 2020 that the start date is revised from 1 July 2020 to the income years commencing on or after three months after the date the enabling legislation receives Royal Assent.

Income years commencing on or after 3 months after the date the enabling legislation receives Royal Assent

ABN system reforms

Announced on 2 April 2019 as part of the Federal Budget 2019–20

Requires ABN holders:

  • with an income tax return obligation to lodge their income tax return; and
  • to annually re-confirm their details on the Australian Business Register.

 

 

1 July 2021
1 July 2022

Reducing the compliance burden of FBT record keeping

Announced on 6 October 2020 as part of the Federal Budget 2020–21.

Will allow employers to rely on existing corporate records, rather than employee declarations and other prescribed records, to finalise their FBT returns.

1 April of the FBT year after the date the enabling legislation receives Royal Assent

Corporate tax residency

Announced on 6 October 2020 as part of the Federal Budget 2020–21.

Adopted the key recommendation of the Board of Taxation and will amend the law to provide that a company that is incorporated offshore will be treated as an Australian resident for tax purposes if it has a ‘significant economic connection to Australia’.

First income year after the date the enabling legislation receives Royal Assent (with option to retrospectively apply the new law from 15 March 2017)

2021 storms and floods — tax treatment
of qualifying grants

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will provide an income tax exemption for qualifying grants made to primary producers and small businesses affected by the storms and floods in Australia.

The grants will be made non-assessable non-exempt income for income tax purposes.

Qualifying grants that relate to storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021

ATO debt recovery action for small businesses

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will extend the power of the AAT to pause or modify ATO debt recovery action in relation to disputed debts that are being reviewed by the Small Business Taxation Division of the AAT.

Date the enabling legislation receives Royal Assent

Corporate collective investment vehicles

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will finalise the corporate collective investment vehicles component of the measure titled Ten Year Enterprise Tax Plan — implementing a new suite of collective investment vehicles announced in the Federal Budget 2016–17, with a revised commencement date.

1 July 2022

Corporate tax residency — trusts and corporate limited partnerships

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will consult on broadening the amendments to the corporate tax residency rules to include trusts and corporate limited partnerships which are subject to their own separate but similar residency tests.

Part of consultation on corporate tax residency test amendments announced in Federal Budget 2020–21

Digital games tax offset

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will introduce a 30% refundable DGTO, for eligible businesses that spend a minimum of $500,000 on qualifying Australian games expenditure.

The maximum DGTO that a developer will be able to claim in each year is $20 million.

1 July 2022

Employee Share Schemes

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will remove the cessation of employment taxing point for the tax-deferred ESS that is available for all companies.

ESS interests issued from the first income year after the enabling legislation receives Royal Assent

Self-assessing the effective life of intangible depreciating assets

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will allow taxpayers to self-assess the tax effective lives of eligible intangible depreciating assets, such as patents, registered designs, copyrights and
in-house software.18

Assets acquired from 1 July 2023

Temporary full expensing of depreciating assets

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will extend the Federal Budget 2020–21 measure by 12 months until 30 June 2023.

Eligible businesses with an aggregated turnover or a total income of less than $5 billion will be allowed to deduct the full cost of eligible depreciating assets of any value.

From 1 July 2023, normal depreciation arrangements will apply.

Eligible assets acquired from 7:30pm (AEDT) on 6 October 2020 and first used or installed ready for use by 30 June 2023

Temporary loss carry back

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will extend the Federal Budget 2020–21 measure by 12 months. The extension will allow eligible companies to carry back (utilise) tax losses from the 2022–23 income year to offset previously taxed profits as far back as the 2018-19 income year when they lodge their 2023 tax return.

Companies with aggregated turnover of less than $5 billion are eligible for temporary loss carry-back.19

Companies that do not elect to carry back losses under this measure can still carry losses forward as normal.

Losses from 2019–20 to 2022–23 can be carried back against taxed profits from 2018–19 to 2021–22

A loss carry back tax offset can be claimed in the 2021, 2022 or 2023 company income tax return

Individual tax residency rules

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will replace the individual tax residency rules with a new, modernised framework comprising:

  • a primary test — under this simple ‘bright line’ test, a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident; and
  • a secondary test (i.e. a factor test) — for individuals who do not meet the primary test. A person will be an Australian tax resident if they satisfy any two of the four factors, including physical presence and measurable, objective criteria.

First income year after the enabling legislation receives Royal Assent

Self-education expenses

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will remove the exclusion of the first $25020 of deductions for prescribed courses of self-education.

First income year after the enabling legislation receives Royal Assent

First Home Super Saver Scheme — increasing the maximum releasable amount

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will increase the maximum releasable amount of voluntary concessional and non-concessional contributions under the FHSSS from $30,000 to $50,000.

Start of the first financial year after the enabling legislation receives Royal Assent21

First Home Super Saver Scheme — technical changes

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will make four technical changes to the legislation underpinning the FHSSS to improve its operation as well as the experience of first home buyers using the scheme.

Start of the first financial year after the enabling legislation receives Royal Assent21

Downsizer contributions

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will reduce the eligibility age to make downsizer contributions into superannuation from 65 to 60 years of age.

Start of the first financial year after the enabling legislation receives Royal Assent21

Work test for voluntary superannuation contributions

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will allow individuals aged 67 to 74 years (inclusive) to make or receive non-concessional (including under the bring-forward rule) or salary sacrifice superannuation contributions without meeting the work test, subject to existing contribution caps. Individuals aged 67 to 74 years will still have to meet the work test to make personal deductible contributions.

Start of the first financial year after the enabling legislation receives Royal Assent21

Superannuation guarantee

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer.

Start of the first financial year after the enabling legislation receives Royal Assent21

SMSFs — relaxing residency requirements

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will relax residency requirements for SMSFs and small APRA-regulated funds by:

  • extending the central control and management test safe harbour from two to five years for SMSFs; and
  • removing the active member test for both fund types.

This measure will allow SMSF and small
APRA-regulated fund members to continue to contribute to their superannuation fund while temporarily overseas.

Start of the first financial year after the enabling legislation receives Royal Assent21

SMSFs — legacy retirement product conversions

Announced on 11 May 2021 as part of the Federal Budget 2021–22.

Will allow individuals to exit a specified range of legacy retirement products, together with any associated reserves, for a two-year period.

This will enable the conversion of market-linked, life-expectancy and lifetime products into an account-based pension.

First financial year after the enabling legislation receives Royal Assent

Extension of temporary reduction in superannuation minimum drawdown rates

Announced on 29 May 2021

As part of the response to the COVID-19 pandemic, the Government responded immediately and reduced the superannuation minimum drawdown rates by 50% for the 2019–20 and 2020–21 financial years, ending on 30 June 2021 (see page 5).

Will extend the temporary reduction in superannuation account-based pension minimum drawdown rates for a further year to 30 June 2022.

Extends the reduction to the 2021–22 financial year

18 This measure was previously contained in Schedule 2 to the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 which was introduced into Parliament on 30 March 2017. That Bill proposed to amend the income tax law to provide taxpayers with the choice to self-assess the effective life of certain intangible depreciating assets they start to hold on or after 1 July 2016, rather than using the statutory effective life currently specified in s 40-95(7) of the ITAA 1997. On 5 December 2018, the Government’s amendment in the Senate to remove Schedule 2 from the Bill was agreed to by the Senate, and the Bill was enacted on 1 March 2019 without the measure affecting intangible assets proceeding.

19 The loss carry back tax offset is limited by requiring that the amount carried back is not more than the tax paid on the earlier taxed profits and that the carry-back does not generate a franking account deficit.

20 See s 82A(1) of the ITAA 1936.

21 The Government expects this to have occurred before 1 July 2022.

Board of Taxation reviews

Review

Details of Board of Taxation review

Status of review

Review of low value imported goods

On 5 July 2021, the Minister for Housing and Assistant Treasurer, Michael Sukkar, announced that the Board would undertake a review of the collection of GST on low value imported goods and ensure the system is operating as intended.

Stakeholders are invited to provide early feedback by way of an informal email on key issues to LVIG@taxboard.gov.au.

The Board has been asked to report back to the Government by 17 December 2021.

Terms of Reference

Current

Review of CGT
roll-overs

On 12 December 2019, the Minister for Housing and Assistant Treasurer, Michael Sukkar, announced that the Board would undertake a review of the CGT
roll-over rules.

In February 2020, the Board released a Consultation Guide.22

The Board had been asked to report to Government by 30 November 2020. However, the initial consultation period was extended in response to the COVID-19 pandemic.

The Board released a second Consultation Paper for stakeholder review in December 2020.23

Terms of Reference

Current

R&D Tax Incentive — Review of the dual-agency administration model

On 11 May 2021, as part of the Federal Budget 2021–22, the Government announced that the Board would undertake a review to evaluate the dual-agency24 administration model for the R&DTI.

The Board has been requested to evaluate the R&DTI dual-agency administration model, with a view to identifying opportunities to reduce duplication between the two administrators, simplify administrative processes, or otherwise reduce the compliance costs for applicants.

The Government has asked the Board to review the administrative framework of the R&DTI before the end of 2021.

Terms of Reference

Current

22 The Tax Institute made a submission in response to this consultation paper on 7 July 2020.

23 The Tax Institute made a submission in response to this consultation paper on 12 February 2021.

24 Dual-agency refers to the joint administration of the R&DTI by the ATO and Industry Innovation and Science Australia (IISA) and the Department of Industry, Science, Energy and Resources (DISER), with the ATO being responsible for the administration and processing of R&D tax offset claims, and IISA responsible for registering companies' R&D activities.

Inspector-General of Taxation reviews

Review

Details of IGT review

Status

Effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal

Title of review: An Investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal

The purpose of this IGTO investigation is to confirm how effectively (clearly and completely) the ATO communicates appropriate information to taxpayers and their representatives on the taxpayers’ rights to review, complain and appeal decisions made and actions taken by the ATO.

Terms of Reference

Current

Undisputed
tax debts

Title of review: Investigation and Exploration of Undisputed Tax Debts in Australia

The report is a key piece of research intended to provide Australian taxpayers, tax practitioners, government and business with a detailed understanding of where tax debts are accruing in the tax system and occurring in the economy.

Final Report

ATO Response

Terms of Reference

Completed

JobKeeper and Cash flow boost

Title of review: A Report on aspects of the Australian Taxation Office’s administration of JobKeeper and Boosting Cash Flow Payments for new businesses

The IGTO conducted complaint investigations (commencing in June 2020) in response to concerns raised by or on behalf of new small businesses, both individuals and entities. Most complainants were concerned that the ATO had decided they were ineligible to receive JobKeeper or the CFB.

Final Report

ATO Response

Completed

Other Government reviews

Review

Details of Government review

Status

Retirement Income Review

Independent review of the current state of the retirement income system and how it will perform in the future as Australians live longer and the population ages.

The review will consider the incentives for people to self-fund their retirement, the fiscal sustainability of the system, the role of the three pillars of the retirement income system, and the level of support provided to different cohorts across time.

Final Report

Completed

Announced: 27 September 2019

Final Report was delivered to the Government in July 2020 and released on 20 November 2020

TPB

Independent review of the effectiveness of the TPB and the Tax Agent Services Act 2009 to ensure that tax agent services are provided to the public in accordance with appropriate professional and ethical standards.

Final Report

Government Response

Terms of Reference

Completed

Announced: 5 March 2019

Final Report was delivered to the Government on 31 October 2019
and released on 27 November 2020

Parliamentary Committee reviews

Review

Details of Parliamentary Committee review

Status

Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering) Bill 2021

On 24 June 2021, the Senate referred the Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering) Bill 2021 to the Senate Economics Legislation Committee.

Review home page

The Private Member’s25 Bill was referred to the Committee to provide an opportunity for consideration of the specifics of the Bill and assess the implications of its passage through the Parliament.

(For further information, see page 18)

Current

For inquiry and report by 20 August 2021

25 A Private Member’s Bill is a Bill introduced into Parliament by a member of the House of Representatives or a senator who is not acting on behalf of the government. This Bill was introduced on 21 June 2021 by Tasmanian Greens Senator Nick McKim.

COVID-19 stimulus measures — end dates

The following table sets out the dates on which the 2020 COVID-19 economic stimulus measures conclude.

Measure

Conclusion of program

Early access to superannuation

31 December 2020

Temporary Coronavirus Supplement for those on income support

$250 per fortnight from 25 September 2020 until 31 December 2020

$150 per fortnight from 1 January 2021 until 31 March 2021

$150,000 instant asset write-off (aggregated turnover less than $500 million)

Must acquire asset by 31 December 2020, and first use or install the asset ready for use by 30 June 2021

JobKeeper

Phase 1 of the Scheme ($1,500 per fortnight) commenced on 30 March 2020 until 27 September 2020

Phase 2 of the Scheme ($1,200/$75026 per fortnight) commenced on 28 September 2020 until 3 January 2021

Phase 3 of the Scheme ($1,000/$65026 per fortnight) commenced on 4 January 2021 until 28 March 2021

Temporary provisions in Fair Work Act relating to JobKeeper (i.e. JobKeeper enabling direction)

29 March 2021

HomeBuilder

For contracts signed between 4 June 2020 and 31 March 2021, construction needs to commence within 18 months (e.g. for a contract signed on 31 March 2021, construction would need to commence by 30 September 202227

Backing Business Investment (accelerated depreciation)

30 June 2021

Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme

Phase 1 of the Scheme commenced on 23 March 2020 and closed for new loans on 30 September 2020

Phase 2 of the Scheme commenced on 1 October 2020 and was available for loans made by participating lenders until 30 June 2021

JobMaker Hiring Credit

6 October 2022

Loss carry back

Losses incurred up until 30 June 202328

Temporary full expensing of depreciating assets

30 June 202329

26 Based on hours worked by the individual in the reference period.

27 On 29 November 2020, the Government announced a six-month extension to the HomeBuilder program (from 31 December 2020) to 31 March 2021. On 17 April 2021, the Government announced that the construction commencement requirement will be extended from six months to 18 months for all existing applicants. This will provide an additional 12 months to commence construction from the date on which the building contract was signed. Applications for HomeBuilder closed at midnight on 14 April 2021.

28 Subject to legislative amendment to give effect to the Government’s announcement on 11 May 2021, as part of the Federal Budget 2021–22, to extend the measure by 12 months. Losses incurred up to 30 June 2023 will be able to be carried back as far to the year ended 30 June 2019 with eligibility being limited to corporate taxpayers with an aggregated turnover of less than $5 billion.

29 This measure is currently legislated to end on 30 June 2022, however the Government announced on 11 May 2021 as part of the Federal Budget 2021–22 that the measure will be extended by 12 months to 30 June 2023. Amending legislation has not yet been introduced into Parliament.

What’s new on 1 July 2021?

The following table sets out the key tax and superannuation measures which will, or are proposed to, take effect on 1 July 2021.

Measure

Details

Corporate tax cuts

Reduction in the corporate tax rate and the corporate tax rate for imputation purposes for base rate entities from 27.5% for 2019–20 to:

  • 26% for 2020–21; and
  • 25% from 2021–22
  • Increase in the discount rate for the small business income tax offset from 10% for 2019–20 to:
  • 13% for 2020–21; and
  • 16% from 2021–22

Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Act 2018

Enacted on 31 August 2018 as Act No. 94 of 2018

Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Act 2018

Enacted on 25 October 2018 as Act No. 134 of 2018

Expanded access to small business tax concessions

Schedule 3 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Enables eligible entities with an aggregated turnover of $10 million or more but less than $50 million to access a range of small business entity tax concessions.

Measures starting on 1 July 2021:

  • simplified trading stock rules;
  • ability to pay PAYG instalments based on GDP-adjusted notional tax;
  • ability to defer excise duty and excise-equivalent customs duty to a monthly reporting cycle (rather than weekly);
  • two-year amendment period in respect of amendments to income tax assessments; and
  • simplified accounting method for GST purposes.

Enacted on 14 October 2020 as Act No. 92 of 2020

STP reporting — closely held payees

The STP exemption for small employers (those with 19 or fewer employees) to report closely held payees ended on 30 June 2021.

From 1 July 2021, employers are required to report payments made to their closely held payees through an STP-enabled digital solution. Three reporting options are available, including reporting based on a quarterly reasonable estimate.

Further information is available in our Single Touch Payroll: Closely held payees blog article.

Superannuation guarantee rate

The charge percentage under s 19 of the SGAA increases from 9.5% to 10% on 1 July 2021.

It is legislated30 to further increase as follows:

  • 10.5% from 1 July 2022
  • 11% from 1 July 2023
  • 11.5% from 1 July 2024
  • 12% from 1 July 2025

R&D Tax Incentive

Schedules 4–6 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020

Makes changes to the R&DTI, including:

  • linking the R&D tax offset for refundable R&D tax offset claimants (aggregated turnover less than $20 million) to claimants’ corporate tax rate plus an 18.5 percentage point premium;
  • increasing the R&D tax offset for non-refundable R&D tax offset claimants (aggregated turnover $20 million or more) with high levels of R&D intensity (attracting a premium of either 8.5 or 16.5 percentage points); and
  • increasing the R&D expenditure threshold from $100 million to $150 million and making the threshold a permanent feature.

Enacted on 14 October 2020 as Act No. 92 of 2020

ABN system reforms

Announced on 2 April 2019 as part of the Federal Budget 2019–20

Requires ABN holders with an income tax return obligation to lodge their income tax return.

STP reporting — child support information

Schedule 2 to the Treasury Laws Amendment (2020 Measures No. 2) Act 2020

Broadens the amounts that employers can voluntarily report under the STP rules to include employer withholding of child support deductions from salary or wages and child support garnishee amounts from salary or wages that are paid to the Child Support Registrar (if employers choose to report under STP to the ATO, they do not also have to report the amounts to the Child Support Registrar).

Enacted on 3 September 2020 as Act No. 79 of 2020

On 3 February 2021, the ATO registered a legislative instrument which outlines the Commissioner’s intention for voluntary reporting to commence from 4 January 2021, with employers required to have commenced reporting via the new Phase 2 pay event by 1 January 2022.

30 Legislative amendments to increase the charge percentage were made by the Minerals Resource Rent Tax Repeal and Other Measures Act 2014 which was enacted on 5 September 2014 as Act No. 96 of 2014.

Proposed ATO legislative guidance

The following table sets out some ATO advice under development that, when issued, will provide guidance on the operation of some recent legislative amendments.

Measure

Details

Superannuation funds:
non-arm’s length income

 

This final Law Companion Ruling — which will finalise LCR 2019/D3 — will provide the Commissioner’s view of amendments in Schedule 2 to the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019, concerning the application of the non-arm’s length income provisions where a trustee incurs ‘non-arm’s length expenditure’ under a scheme.

Date of effect of legislative amendments: 1 July 2018

Limiting deductions for expenses for holding vacant land

This draft Ruling will provide preliminary guidance in relation to the application of s 26-102 of the ITAA 1997, which was inserted by Schedule 3 to the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019.

Date of effect of legislative amendments: 1 July 2019

Temporary full expensing

Draft Law Companion Ruling, LCR 2021/D1 Temporary full expensing, provides preliminary guidance in relation to the provisions for Temporary full expensing of depreciating assets introduced by the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 and the Treasury Laws Amendment (2020 Measures No.6) Act 2020.

Date of effect of legislative amendments: 6 October 2020

Useful ATO links

The following table sets out some useful links to ATO webpages which contain resources and useful information on the status of ATO guidance.

Resource

Details

Advice under development program

The ATO develops public advice and guidance to assist taxpayers to understand their obligations and be aware of their rights and entitlements.

Key matters on which the ATO is currently considering providing advice and guidance are grouped by topic. This content is updated regularly.

Forms and instructions

A range of forms and instructions to assist with tax time.

Key super rates and thresholds

Key super rates and thresholds sets out a range of useful rates and thresholds that apply to contributions and benefits, employment termination payments, superannuation guarantee and co-contributions.

Matters under consultation

Key matters on which the ATO is currently consulting are grouped by segment of the market. This content is updated regularly.

Media Centre

The ATO’s Media Centre contains media releases, speeches, articles, videos and other useful content.

Occupation and industry specific guides

A range of guides for specific industries and occupations to help taxpayers to correctly report their income and allowances, and claim deductions for the work-related expenses they are entitled to.

Small business newsroom

The Small business newsroom contains a suite of resources for small businesses to keep up to date with the latest news, keep track of key dates and access quick links to other resources.

Tax professionals newsroom

The Tax professionals newsroom allows tax professionals to keep up to date with the latest news.

Tax Time 2021

A suite of resources including an overview of key changes, how to prepare for tax time and key tax time messages from the Tax Practitioners Stewardship Group.

Downloadable PDF publications are available from the ATO Publication Ordering Service.

Tax Time Toolkit

A suite of downloadable PDF publications is available here.

Appendix — JobKeeper and JobMaker Hiring Credit programs

This Appendix sets out key information relating to the JobKeeper and JobMaker Hiring Credit programs.

Details of enacted Act

Start date

Schedule 2 to the Coronavirus Economic Response Package (Payments and Benefits) Act 2020

Establishes a legislative framework to administer the Coronavirus economic response payments so the Treasurer can make rules to provide for JobKeeper payments administered by the Commissioner (prescribed period ends on 31 December 2020).

JobKeeper payments supported businesses to keep more Australian workers in jobs through the course of the Coronavirus.

Enacted on 9 April 2020 as Act No. 37 of 2020

See also Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020

Enacted on 9 April 2020 as Act No. 38 of 2020

See also Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Act 2020

Amends the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to extend the end date of the JobKeeper scheme to 28 March 2021, and makes consequential amendments to the Fair Work Act 2009.

Enacted on 3 September 2020 as Act No. 81 of 2020

Legislative period allowed:
1 March 2020 to 28 March 2021 (inclusive)

Period prescribed by the Treasurer: 30 March 2020 to 28 March 2021 (inclusive)

Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020

Enables the Treasurer to make rules to provide for a Coronavirus economic response payment in relation to the JobMaker Hiring Credit scheme.

Enacted on 13 November 2020 as Act No. 96 of 2020

Operates from 7 October 2020 to 6 October 2022

Accompanying legislative instruments

Below, ‘Coronavirus Economic Response Package’ is abbreviated to CERP.

Details of registered legislative instrument

CERP (Payments and Benefits) Rules 2020

Treasurer’s original JobKeeper rules

Registered on 9 April 2020 as Legislative Instrument F2020L00419

CERP (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020

Commissioner’s rules about alternative decline in turnover test

Registered on 23 April 2020 as Legislative Instrument F2020L00461

CERP (Payments and Benefits) Amendment Rules (No. 1) 2020

Treasurer’s amended rules about authorised deposit-taking institutions

Registered on 24 April 2020 as Legislative Instrument F2020L00479

CERP (Payments and Benefits) Amendment Rules (No. 2) 2020

Treasurer’s amended rules about individuals aged 16–17 years; “one-in all-in” rule, service entities and religious practitioners

Registered on 1 May 2020 as Legislative Instrument F2020L00546

CERP (Payments and Benefits) Amendment Rules (No. 3) 2020

Treasurer’s amended rules about 6-month turnover test period applying to universities

Registered on 22 May 2020 as Legislative Instrument F2020L00605

CERP (Payments and Benefits) Amendment Rules (No. 4) 2020

Treasurer’s amended rules about authorised deposit-taking institutions

Registered on 22 May 2020 as Legislative Instrument F2020L00603

Superannuation Guarantee (Administration) Amendment (Jobkeeper Payment) Regulations 2020

Treasurer’s rules about superannuation guarantee obligations

Registered on 28 May 2020 as Legislative Instrument F2020L00655

CERP (Payments and Benefits) Amendment Rules (No. 5) 2020

Treasurer’s rules about approved providers of child care services

Registered on 6 July 2020 as Legislative Instrument F2020L00884

CERP (Payments and Benefits) Amendment Rules (No. 6) 2020

Treasurer’s rules about giving of information

Registered on 16 July 2020 as Legislative Instrument F2020L00921

Details of registered legislative instrument

CERP (Payments and Benefits) Amendment Rules (No. 7) 2020

Treasurer’s rules about 1 July 2020 employment date

Registered on 14 August 2020 as Legislative Instrument F2020L01021

CERP (Payments and Benefits) Amendment Rules (No. 8) 2020

Treasurer’s amended rules about extended JobKeeper program, including actual decline in turnover test

Registered on 15 September 2020 as Legislative Instrument F2020L01165

CERP (Payments and Benefits) (Timing of Supplies Made and Decline in Turnover Test) Rules 2020 (No. 1)

Commissioner’s rules about timing of supplies made and actual decline in turnover test

Registered on 16 September 2020 as Legislative Instrument F2020L01171

CERP (Payments and Benefits) Higher Rate Determination 2020

Commissioner’s rules about determining rate where hours not readily ascertainable

Registered on 16 September 2020 as Legislative Instrument F2020L01172

CERP (Payments and Benefits) Alternative Reference Period Determination 2020

Commissioner’s rules about determining alternative period where reference period is not suitable

Registered on 16 September 2020 as Legislative Instrument F2020L01173

CERP (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

Commissioner’s rules about alternative decline in turnover test

Registered on 22 September 2020 as Legislative Instrument F2020L01200

CERP (Payments and Benefits) Alternative Decline in Turnover Test Amendment Rules 2020

Commissioner’s rules about businesses that temporarily ceased trading

Registered on 9 October 2020 as Legislative Instrument F2020L01295

CERP (Payments and Benefits) Amendment Rules (No. 9) 2020

Treasurer’s rules about JobMaker Hiring Credit

Registered on 4 December 2020 as Legislative Instrument F2020L01534

 

DISCLAIMER

The material and opinions in this report should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests. Information is correct as of date of publish, 29 July 2021.