TAX BULLETIN – FEBRUARY 2019
Division 293 Assessments
The ATO has been issuing ‘Additional tax on concessional contributions (Division 293) assessments’ with respect to liabilities relating to the 2018 income year. Division 293 imposes an additional 15% tax on certain concessional (i.e., taxable) superannuation contributions.
It applies to individuals with income and concessional superannuation contributions exceeding the relevant annual threshold. This means that impacted individuals may ultimately pay 30% tax (when the Division 293 tax is combined with the existing 15% contributions tax) with respect to:
superannuation contributions made on their behalf as a result of employer super guarantee obligations or effective salary packaging arrangements; or
personal deductible contributions.
The ATO reportedly expects to issue about 90,000 assessments during the first two months of 2019.
Payment needs to be made by the due date to avoid any additional interest charges, although alternative payment methods are available (including the ability to release money from any existing super balances).
Claims for home office expenses increased
The ATO has updated the hourly rate taxpayers can use to determine deductions for home office expenses from 45 cents to 52 cents per hour for individual taxpayers, effective 1 July 2018 (i.e., from the 2019 income year).
According to the ATO’s recently updated PS LA 2001/6, individual taxpayers who claim deductions for either work or business-related home office running expenses may either:
claim a deduction for the actual expenses incurred; or
calculate the running expenses at the rate of 52 cents per hour.
Taxpayers who use the rate per hour method to claim a deduction for home office running expenses only need to keep a record to show how many hours they work from home.
This reduced substantiation requirement can be recorded either:
during the course of the income year; or alternatively
they can keep a representative four-week diary (where their work from home hours are regular and constant)
Taxation of Income for an Individual’s fame or image
The Government has released a consultation paper with respect to the implementation of the 2018/19 Federal Budget announcement relating to the direct taxation of an individual’s fame or image at their marginal tax rates. The proposed reform aims to ensure that all remuneration (including both cash and non-cash benefits) provided for the commercial exploitation of a person’s fame or image will be included in their assessable income
CORPORATE AND INTERNATIONAL
Change to reportable tax position lodgment requirements
The ATO have advised that they no longer issue notifications to every taxpayer who has to lodge a Reportable Tax Position (RTP) schedule. In most instances, you and your clients must assess if they are required to submit the RTP schedule.
If a taxpayer satisfies all the following criteria, they will need to lodge an RTP schedule for years ending
on or after 30 June 2019:
they are a public company or a foreign owned company
their total business income is $25 million or more in the current tax return (for the 2017-18 year the 'total income' is reported at label 6S)
they are part of a public or foreign owned economic group with total business income of $250 million or more in the current or immediately prior year.
The definition of an economic group includes all entities (companies, trusts and partnerships etc.) that lodge an Australian tax return under a direct or indirect Australian or foreign ultimate holding company or other majority controlling interest.
How the ACNC approaches concerns about charities
The Australian Charities and Not-for-profits Commission (ACNC) receives over 150 concerns per month relating to the actions, activities and eligibility of Australia’s registered charities. The most common concerns received by the ACNC relate to allegations of financial mismanagement, potential harm to beneficiaries, private benefit or fraudulent activity. The ACNC takes all concerns about registered charities seriously. We review the concerns raised with us, investigate where appropriate, and refer concerns to other agencies if needed.