Government proposes new changes to superannuation system.

Positive credit reporting to be mandated by mid-2018.

SMEs preparing for the arrival of Amazon Australia.

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Bryant & Bryant

General Data Protection Regulation is Coming

In May 2018, the European Union’s General Data Protection Regulation will come into effect. The change applies to any business that holds, controls or processes personal data of EU residents, so any Australian company that possess personal data of EU residents – whether they’re customers or employees – is impacted. The new legislation brings direct statutory obligations such as implementing technical & organisational security measures, and indirect obligations such as deploying a due diligence process when onboarding a supplier, ongoing monitoring and exit management. There are significant consequences of non-compliance, including fines of €20 million or up to four percent of global turnover, plus other sanctions including the ability to halt trading in the EU.

 Upcoming Key Dates

1 December
Pay income tax for taxable large/medium taxpayers, companies and super funds. Lodgement of return is due 15 January 2018.
Pay income tax for the taxable head company of a consolidated group with a member deemed to be a large/medium taxpayer in the latest year lodged. Lodgement of return is due 15 January 2018.
Pay income tax for companies and super funds when lodgement of the tax return was due 31 October 2017.
21 December
Lodge and pay November 2017 monthly activity statement.
15 January
Lodge tax return for taxable large/medium entities as per the latest year lodged (all entities other than individuals); unless required earlier, payment for large/medium entities with a 15 January due date is:

  • 1 December 2017 – for companies and super funds
  •  As stated on their notice of assessment - for trusts.
Note: You cannot self-assess a lodgement deferral from this date or assume a later date for lodgement on the basis that the taxpayer will be non-taxable in the current year.
Lodge tax return for the taxable head company of a consolidated group (including a new registrant) that has a member who has been deemed a large/medium entity in the latest year lodged, unless the return was required earlier. Payment was due 1 December 2017.
21 January
Lodge and pay quarter 2, 2017–18 PAYG instalment activity statement for head companies of consolidated groups.
Lodge and pay December 2017 monthly business activity statement except for business clients with up to $10 million turnover who report GST monthly and lodge electronically.
28 January
Make quarter 2, 2017–18 super guarantee contributions to funds by this date.
Employers who do not pay minimum super contributions for quarter 2 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly (NAT 9599) by 28 February 2018.
Note: The super guarantee charge is not tax deductible.
31 January
Lodge TFN report for closely held trusts if any beneficiary quoted their TFN to a trustee in quarter 2, 2017–18.

SMEs Warming Up to Amazon’s Australian Debut

The arrival of Amazon in Australia has seen mixed reactions across small-to-medium-sized businesses and larger corporations, with SMEs starting to prepare for Amazon’s debut. A recent survey from InsideRetail found SMEs are warming up to the idea of selling on Amazon, but larger businesses remain less enthusiastic. 62 percent of micro businesses, 56 percent of small businesses and 53 percent of medium-sized businesses said they saw Amazon's arrival as an opportunity to grow. However, big businesses are not convinced, with only 33 percent expecting Amazon to be helpful for them. Watch this space to see how much the Australian retail landscape is affected.

Lowering the Corporate Tax Rate

On 1 September 2016, the government introduced a bill to progressively reduce the corporate tax rate from 30 to 25 percent. This applied to corporate entities with an aggregated turnover of less than $25 million for the 2017-18 income year, and less than $50 million for the 2018-19 income year. The bill received Royal Assent on 19 May 2017.  On 18 October 2017, the government introduced a new bill, which, if it receives royal assent, will allow corporate entities with no more than 80 percent base rate entity, passive income eligibility for the lower corporate tax rate starting from the 2017–18 income year. If you’re unsure how any of these new bills will affect you, speak with us.

Expanding Tax Incentives For Investments in Affordable Housing

In May 2017 the government announced that from 1 January 2018, an additional 10 percentage point capital gains tax discount will be provided for resident individuals who invest in qualifying affordable housing. This will increase the capital gains tax discount to 60 percent. To qualify for the 60 percent discount, housing must be provided to low-to-moderate income tenants, and rent must be charged at a discount below the private market rental rate. The affordable housing must be managed through a registered community housing provider and the investment held for a minimum of three years.

Contractor or Employee?

The difference between a contractor and an employee is not always clear cut. The courts and tax office take a number of factors into account when determining the actual status, such as hours worked, superannuation, method of payment and leave to name a few. Any written agreement stating the nature of the relationship is certainly relevant, but it’s not conclusive, and should not be relied solely upon. Both employers and contractors need to be fully aware of their situation as serious penalties are involved with sham contracting arrangements. Find out more here.

"Holiday home" included in tax concession test

A taxpayer company has been unsuccessful before the Administrative Appeals Tribunal (AAT) in a claim to secure the capital gains tax (CGT) concessions for small businesses.

In this case, the AAT affirmed the Commissioner's decision that the taxpayer did not satisfy the "maximum net asset value" test for the purposes of qualifying for the concessions. The AAT found that the individual who controlled the company could not exclude from the test his interest in a Queensland property, which he claimed was used for "personal use and enjoyment".

TIP: The small business CGT concessions are intended to offer small business taxpayers a range of unique tax concessions. However, despite being targeted towards taxpayers who typically have less complicated affairs, the rules are riddled with complexities that may not appear obvious at first glance.

Each concession has its own particular rules. However, there are two basic conditions for the relief - either the taxpayer is a small business entity (SBE) or is a partner of a partnership that is an SBE, or the taxpayer satisfies the maximum net asset value test. If you have any questions, please contact our office.

Small business benchmarks catch out florist

The AAT has recently dismissed an appeal by a florist against the Tax Commissioner's decision to issue income tax and GST assessments following an ATO audit of her florist business.

The taxpayer had reported that the cost of goods sold in her business represented 83% of her reported business income. The ATO had selected the taxpayer for audit because this figure was outside what it considered to be the industry benchmark range of between 44% and 54%.

In this case, the taxpayer was unable, due to a lack of evidence, to prove to the AAT that the assessments were excessive.

TIP: The Tax Commissioner has warned that businesses operating outside the relevant benchmarks could be subject to ATO review and/or audit, and where the businesses do not have adequate records to substantiate their performance, the ATO will make a default assessment using the appropriate small business benchmark.

Businesses may want to consider reviewing their record-keeping practices and assess whether they are at risk of an audit. Please contact our office for further information.

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Disclaimer: This is not advice. Information provided in this bulletin may be in the form of summaries and generalisations - it may omit detail that could be significant in a particular context or to your personal circumstances. You should not act solely on the basis of material contained in this bulletin. Before you start any transactions, you should obtain appropriate professional advice relevant to your particular circumstances. Links to third-party websites are inserted for your convenience, but do not constitute endorsement of material at those sites or any associated product or service. Changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of the areas. The information in this bulletin is provided on the basis that all persons accessing the bulletin undertake responsibility for assessing the relevance and accuracy of its content.

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