Black Economy Taskforce interim report released

The Federal Government has released the Black Economy Taskforce’s interim report. The Government has accepted the following recommendations identified for immediate action in the 2017-18 Federal Budget as part of its Tax Integrity package:

·       Extending the Taxable Payment Reporting system (TPRS) to two high-risk industries - cleaning and couriers - to ensure payments made to contractors in these sectors are reported to the ATO from 1 July 2018 with the first annual report required to be lodged by August 2019.

·       Banning the manufacture, distribution, possession, use or sale of sales suppression technology. This technology allows businesses to understate their income, and has been identified as a threat to the integrity of the tax system both in Australia and internationally.

·       Providing funding for the ATO audit and lodgement activities to better target black economy risks.

To help inform the recommendations for the Taskforce's final report (due in October 2017) interested parties can make submissions on the interim report until 30 June 2017.

Senate Committee's Report on Superannuation Guarantee non-payment

The Senate Economics References Committee has released its Report on Superannuation Guarantee (SG) non-payment. Key points made by the Committee include:

·       The current approach of the ATO to identify and address SG non-compliance is inadequate.

·       There is a compelling need for a reliable SG gap figure produced yearly in order to track rates of SG non-payment, analysing which policies are effective, and ultimately minimising the problem.

·       The current SG Charge (SGC) framework, with its reliance on employer self-reporting, should be reviewed in order to ensure that SGC penalties are strong enough to act as a proper deterrent.

·       Moving SG compliance from the 'paper age' to the 'digital age' will enable a greater focus on proactive methods. This will in turn increase the effectiveness of efforts to detect and remedy SG non-compliance.

The Committee has made 32 recommendations intended to address the significant problem of SG non-compliance.

New payroll tax measures in Victoria

The 2017-18 Victorian Budget, released on 2 May 2017, affirmed tax measures announced in its lead up and also housing affordability measures announced earlier this year. New payroll tax measures announced include:

·       A reduction in the payroll tax rate to 3.65 per cent for businesses with payrolls that comprise at least 85 per cent wages associated with regional employees.

·       An increase in the threshold under which businesses can opt to make annual payroll tax payments from $10,000 to $40,000 in annual payroll tax liabilities.

·       The bringing forward of previously announced increases in the payroll tax threshold by one year. The payroll tax threshold will now be increased to $625,000 in 2017-18 and to $650,000 in 2018-19.

The State Taxation Acts Amendment Bill 2017 (Vic) to give effect to these measures has since been introduced into the Victorian Legislative Assembly.

 

Application of payroll tax penalties in respect of failure to register and lodge returns (NSW)

In Advance Pallets Pty Ltd v Chief Commissioner of State Revenue [2017] NSWCATAD 128 the Tribunal confirmed the earlier decision of the Chief Commissioner that it was not appropriate to remit interest or penalty tax in respect of the applicant’s failure to register and lodge payroll tax returns, and to make timely payment of payroll tax.

The Tribunal held that the illness of an executive of the company was not a circumstance beyond the company's control as there were other individuals within the business that should have been able to ensure the applicant’s payroll tax obligations were met. The Tribunal stated that to find otherwise would blur the legal distinction between the company (as a legal person) and its directors and managers.

Car parking FBT threshold for the 2017-18 FBT year

The ATO has released Taxation Determination TD 2017/14 which indicates the car parking threshold for the FBT year commencing on 1 April 2017 is set at $8.66.