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2017
FEDERAL BUDGET - SUMMARY AND FULL COMMENTARY UPDATES
The 2017 Federal Budget was handed down by Scott Morrison on the evening Tuesday 9th May.

Lowe Lippmann is pleased to provide the following commentaries, explaining the key issues released in the budget.

For further clarification, contact your Relationship Partner at Lowe Lippmann.
MAY 2017
TAX ALERT - SMALL BUSINESS ENTITIES REDUCED TAX RATES & IMPUTATION RULES
The Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 was introduced into Parliament on 1 September 2016 and contains a number of changes to progressively reduce the corporate tax rate for small business entities and the franking of dividends which apply from 1 July 2016.

It is important to note that these changes apply to "small business entities" (or SBEs), which are corporate tax entities which satisfy two requirements: (a) carrying on a 'business'; and (b) having aggregated turnover below the 'aggregated turnover threshold'.

While a reduction in the tax rate will clearly benefit companies, be aware that consider the profits earned by the company will eventually be paid to shareholders in the form of dividends, and it is necessary to consider the taxation of these dividends when determining the total tax paid on company profits.
JUN 2017
TAX ALERT - SUPERANNUATION CONTRIBUTION LIMITS FOR THE YEAR ENDING THE YEAR ENDED 30TH JUNE 2017
The superannuation contributions caps for concessional (before tax) and non-concessional (after tax) contributions have not increased for the 2016/2017 year.

Concessional contributions include your employer's compulsory Superannuation Guarantee (SG) contributions, your salary-sacrificed contributions, or any contributions claimed as a tax deduction.

Non-concessional (after-tax) contributions are super contributions made from after-tax dollars or non-taxed savings.
JUL 2017
TAX ALERT - ATO ANNOUNCEMENT "SIMPLER BAS" REPORTING
ATO Announcement

The ATO has recently announced changes to the GST reporting requirements for small businesses, called the "Simpler BAS". This is a proposed partnership between the ATO, software developers, tax professionals and small business associations.
JUL 2017
TAX ALERT - SBE REDUCED TAX RATES FOR PASSIVE INVESTMENTS?
ATO Releases Draft Tax Ruling

Yesterday, some of the major news outlets published articles claiming that the ATO may have opened the floodgates for family investment companies to claim back millions of dollars in company tax, after issuing the (draft) ruling.

Until the draft ruling was issued in March, it had been understood that Australia's many passive investment vehicles, used mainly by families and investors to take advantage of a corporate tax rate lower than marginal income tax rates, would not be entitled to the recent rule changes to reduce corporate tax rates for SBEs.

Revenue Minister Kelly O'Dwyer responded to the news reports that "...the policy decision made by the Government to reduce the tax rate for small companies was not meant to apply to passive investment companies."

The ATO has indicated it is working on more detailed guidance on the issue, which should be published "very soon".
2017
INSOLVENCY WARNING SIGNS
Directors need to be aware they could be personally liable should their company trade whilst insolvent. Being aware of the indicators of insolvency may avoid any insolvent trading claim and assist directors in assessing the business trading position.
2017
IS YOUR CUSTOMER GOING BROKE?
How can you avoid losing money when a customer goes broke?
2017
HAVE YOU RECEIVED A CREDITOR'S STATUTORY DEMAND?
When you (the Company) have an outstanding amount that you owe to a supplier (creditor), the creditor could serve a Statutory Demand.
2017
ARE YOU LIABLE FOR THE COMPANY'S TAX DEBTS?
Directors are not normally liable for the debts of a Company, however in certain circumstances the Directors can be liable for the tax debts.
JUL 2017
TAX ALERT - TRAVEL EXPENSES BEING TARGETED BY THE AUSTRALIAN TAXATION OFFICE
The Government has recently made various announcements in relation to denying or restricting tax deductions in relation to travel expenses incurred by taxpayers.

Firstly, the Treasury has released draft legislation in relation to denying tax deductions for travel expensesn relating to inspecting, maintaining or collecting rent for a residential rental property.

The draft legislation is effective from 1 July 2017 and designed to apply to certain taxpayers only. the guidance released from the Treasury includes various examples to explain which travel expenses may be denied a tax deduction, however, some consider the examples do not cover all components of travel expenses and create uncertainty for taxpayers.

Secondly, the Australian Taxation Office (ATO) recently released Draft TR 2017/D6: Income tax and fringe benefits tax: when are deductions allowed for employees travel expenses?

The draft ruling consolidates and updates a number of former ATO guidance documents. It sets out the ATO's interpretations on the general principles for determining whether an employee's travel and accommodation would otherwise be deductible for income tax and FBT purposes.
2017
IS YOUR BUSINESS PERFORMING AS IT SHOULD?
In this series we will provide benchmark statistics to help you compare the performance of your business to your competitors.

In comparing your business, these benchmarks should be considered the minimum acceptable performance. Don't settle for average. Seek to outperform.

We have data on various industries, and this list is growing.
SEP 2017
TAX ALERT - CAPITAL GAIN WITHHOLDING REGIME IS RELEVANT FOR ANY TAXPAYER SELLING CERTAIN PROPERTY ASSETS!
From 1 July 2017, there is now a very quick simple rule - if you are a purchaser of property for more than $750,000 then you must withhold unless the vendor shows you a clearance certificate or a variation certificate.

Introduction: The Foreign Resident Capital Gains Withholding ("FRCGW") regime commenced on 1 July 2016, and we are now one year on, it is necessary to give an update of these rules.

The terminology "foreign resident" is slightly misleading. We must stress that this obligation arises regardless of whether the vendor is a foreign resident or not.

On 1 July 2017, the following important changes to the FRCGW regime took effect:

1. The withholding rate increased from 10% to 12.5% and,
2. The market value threshold reduced from the current $2 million to $750,000.
OCT 2017
TAX ALERT - NEW PASSIVE INCOME TEST TO ACCESS THE REDUCED CORPORATE TAX RATE
On 18 October 2017, the Government introduced the Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017. This Bill proposes that corporate entities with no more than 80% passive income will be eligible for the lower corporate tax rate.

Provided the Bill passes both houses of Parliament, it will apply prospectively from the 2017-18 income year, commencing on 1 July 2017.
NOV 2017
TAX ALERT - SINGLE TOUCH PAYROLL REPORTING STARTS 1ST JULY 2018
What is STP ? Single Touch Payroll (STP) is a new reporting regime being introduced by the Australian Taxation Office (ATO) to provide real time visibility over the accuracy and timeliness of organisations' payroll processes. STP will enable employers to report salary or wages, pay as you go (PAYG) withholding and super information directly to the ATO at the same time they pay their employees.

When does STP start ? The new STP reporting regime will commence on 1st July 2018. Organisations with 20 or more employees will be required to start transmitting from 1st July 2018.
NOV 2017
TAX ALERT - Residential Property Purchasers to pay GST directly to ATO after 1 July 2018
Introduction: The Government has recently released Exposure Draft legislation in relation to new GST rules that will require Purchasers of new residential premises or new residential subdivisions, to remit the GST on the purchase price directly to the Australian Taxation Office (ATO).

These new rules are proposed to be effective from 1 July 2018 with some transitional concessions.

It is important to note that the proposed rules explained below are at exposure draft stage until 20 November 2017 and are subject to change.
JAN 2018
TAX ALERT - New Vacant Residential Land Tax applies to homes in the Melbourne metropolitan area from 1 January 2018.
Introduction: From 1 January 2018 a new vacant residential land tax (VRLT) applies to homes in inner and middle Melbourne that were vacant for more than six months in the preceding calendar year. This is a new Victorian tax and is different to land tax, the absentee owner surcharge and the federal annual vacancy charge.

If you own a property that was unoccupied for more than six months during 2017, you must notify the State Revenue Office (SR) about the property through the SRO online portal by 15 January 2018.
MAR 2018
TAX ALERT
Introduction The end of the Fringe Benefits Tax (FBT) year is fast approaching on 31 March 2018, so we take this opportunity to revisit some hot FBT issues for both employers and employees, including:

Motor Vehicles - using the company car outside of work
Utes and commercial vehicles - the new safe harbour to avoid FBT
Car parking
Living away from home allowances
FBT rate change
Should you be registered for FBT?
2018
FEDERAL BUDGET - SUMMARY AND FULL COMMENTARY UPDATES
The 2018 Federal Budget was handed down by Scott Morrison on the evening Tuesday 8th May.

Lowe Lippmann is pleased to provide the following commentaries, explaining the key issues released in the budget.

For further clarification, contact your Relationship Partner at Lowe Lippmann.
JUN 2018
TAX ALERT - SUPERANNUATION CONTRIBUTION LIMITS FOR THE YEAR ENDING 30TH JUNE 2018
Introduction

The superannuation contributions caps for concessional (before tax) and non-concessional (after tax) contributions have changed significantly for the 2017/2018 year.

Concessional contributions include your employer's compulsory Superannuation Guarantee contributions, your salary-sacrificed contributions, or any contributions claimed as a tax deduction.

Non-concessional (after-tax) contributions are super contributions made from after-tax dollars or non-taxed savings.

Concessional Contributions Cap

From 1 July 2017, the general concessional contributions cap dropped to $25,000 for all ages.

Non-Concessional Contributions Cap

The non-concessional (after tax) contributions cap for the 2017/2018 year is $1000,000.
OCT 2018
TAX ALERT - REVISIT R&D INCENTIVE PROPOSED CHANGES FOR 2019 YEAR
Introduction

During the delivery of the May 2018 Federal Budget, a number of changes to the Research & Development ("R&D") Tax Incentive scheme were announced.

These changes were made to encourage additional investment in R&D Projects, and will affect companies accessing the R&D Tax Incentive with income years commencing on or after 1 July 2018.

While the legislation to enact the changes is yet to be introduced to Parliament, given the 2019 tax year is well underway, we thought it may be useful to revisit the details of the announce changes.
NOV 2018
TAX ALERT - EXPANDING THE TAXABLE PAYMENTS REPORTING SYSTEM FOR I.T. CONSULTANTS
Introduction

Businesses involved with building and construction were the only industry segment required to lodge a Taxable Payments Reporting System (TPRS) disclosure, for the year ended 30 June 2018, with the Australian Taxation Office (ATO) by 28 August 2018.

The Government announced in the 2018 Budget that it would extend the TPRS regime to a comprehensive list of information technology (IT) service businesses, starting from 1 July 2019.

The new measures classify the IT industry as high risk in terms of likelihood of tax avoidance, placing it alongside cash-in-hand heavy sectors like cleaning, building and construction and the security industry.
FEB 2019
TAX ALERT - LABOR'S PROPOSED CHANGES TO NEGATIVE GEARING & THE CAPITAL GAINS DISCOUNT
Introduction

Federal Labor leader Bill Shorten has announced the Labor Party's (ALP) plan to introduce changes to both negative gearing and the Capital Gains Tax (CGT) discount to all investment assets. If introduced, these changes will have potentially far reaching implications for the Australian property market. The proposed changes are summarised below:

1. Negative gearing - Labor has proposed to limit negative gearing to newly constructed property investments from a yet-to-be-determined date following the next election. All investments made before this date will be fully 'grandfathered', ensuring that taxpayers will continue to be able to deduct the full net rental losses against their taxable income.

Losses from new investments in existing properties can still be used to offset other investment income tax liabilities. These losses can also continue to be carried forward to offset future investment income and any capital gains on the investments.

2. Capital gains tax - Labor has also proposed to halve the capital gains discount for all assets purchased after a yet-to-be-determined date following the next election. This will reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50% to 25%.

All investments made before this date will not be affected by this change and will be fully 'grandfathered'. This policy change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets.

We must note that this Tax Alert has been prepared based on the information which has been released by the ALP to date, however, it will be critical to see the final detail of any legislation (if Labor was to win the next election) before any investment decisions are made.
FEB 2019
TAX ALERT - Single Touch Payroll Reporting Rules Extended to Small Business
Introduction

The extension of Single Touch Payroll (STP) to small business entities, which are employers with 19 or fewer employees, has finally passed both houses this week, after amendments were tabled late last year.

This means that employers with 19 or fewer employees will have to report under STP rules from 1 July 2019. Business with 20 or more employees began reporting from 1 July 2018.

The ATO has published a list of 24 companies intending to provide STP solutions, with the list to be updated over time to include information about the products these companies will offer. Suppliers such as MYOB, Xero and Reckon have each put forward STP product proposals.
2019
TAX ALERT - Proposed budget changes to the instant asset write-off were passed by both Houses of Parliament today
The Treasury Laws Amendment (increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 was passed by the Senate and the House of Representatives this morning, to increase the threshold to $30,000 and expand the eligibility to medium sized businesses with a turnover of less than $50 million.

However, the Bill does not become law until it receives Royal Assent.
2019
TAX ALERT - ATO'S Discretion to Extend the Two-Year Period to Dispose of Dwellings Acquired from a Deceased Estate
Introduction

As a general rule, the trustees and beneficiaries of a deceased estate are able to disregard any CGT implications from the sale of a deceased person's principal residence, provided the sale of that property settles within two years of the deceased's death.

However, given that unforeseen circumstances (such as complex estate administration or challenges to the estate) may make it difficult to finalise a sale within this two year period, the Commissioner of Taxation has a discretion to extend the period where trustees or beneficiaries meet the conditions to apply for a longer period to complete the sale of the property.

During august 2018, the ATO issued a draft Practical Compliance Guidelines (PCG) in relation to the ATO's discretion to extend the two year period to dispose of dwellings acquired from a deceased estate.
2019
TAX ALERT - Important Decision on Leave Entitlements to be Appealed to the High Court
Introduction

The recent Full Federal Court decision in Mondelez v AMWU [2019] has held that employees are entitled to 10 days of personal/carer's leave irrespective of their pattern of work hours, regardless of whether they are full time or part time employees.
2019
TAX ALERT - Vacant Land Tax Bill Passed with Amendments
Introduction

Following a review by the Senate Economics Legislation Committee in August 2019, the Treasury Laws Amendments (2019 Tax Integrity and Other Measures No 1) Bill 2019 was recently passed into law, denying tax deductions claimed for holding costs incurred when owning vacant land in a number of scenarios from 1 July 2019.

The final version of the legislation passed Parliament only after a number of amendments were made.
2019
TAX ALERT - Double Tax Agreement with Israel now in force
Introduction

On 28 March 2019, Australia and Israel signed the first ever Double Tax Agreement (DTA) between the two countries. The Australian Government stated that the treaty will strengthen friendships and commercial relationships, create further opportunities for bilateral trade and investment between the two countries.

The DTA will also provide a legal basis for the exchange of taxpayer information between tax officials in respect of taxes covered by the treaty.

On 14 November 2019, the Australian Parliament passed legislation to give effect to the new DTA and introduce it into our tax law system.
2019
TAX ALERT - Superannuation Guarantee Amnesty
Introduction

During September 2019, the Government re-introduced the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 into Parliament, which proposes to introduce a one-off superannuation guarantee (SG) amnesty for employers who have not always complied with their SG obligations.

Those employers who voluntarily disclose their non-compliance to the ATO during the amnesty period would be; able to claim income tax deductions for the SG amounts disclosed, will not be charged the administration fee, and will not be subject to any further penalties.
2019
REMINDER: REMOVAL OF THE CGT MAIN RESIDENCE EXEMPTION FOR FOREIGN RESIDENTS FROM 1 JULY 2020
Last December we released a Tax Alert confirming that the Federal Government had revived its plan to remove access to the Capital Gains Tax (CGT) main residence exemption for non-residents, which will directly impact both expat Australians (living overseas for an extended period) and foreign tax residents.

However, it is very important to note that where an Australian resident taxpayer who owns a main residence in Australia, purchased before 9 May 2017 and then becomes a foreign tax resident on (say) 1 March 2020, the taxpayer must dispose of the property by 30 June 2020 in order to utilise the full benefit of the CGT main residence exemption.

In this example, if the taxpayer waits until after 30 June 2020 to dispose of their Australian main residence, no CGT exemption will be available.

While this outcome for tax purposes seems very unfair, and we agree, it is now the law.

The option currently available for taxpayers to utilise the full benefit of the CGT main residence exemption include:

Dispose of the main residence before 30 June 2020;
Wait until you re-establish Australian residence sometime later; or
Do not dispose of the main residence.
6 March 2020
HIGHER STAMP DUTY RATES MAY APPLY TO DISCRETIONARY TRUSTS FROM 1 MARCH 2020
The Victorian State Revenue Office (SRO) has announced that from 1 March 2020, the "practical approach" currently given to discretionary trusts with potential foreign beneficiaries will be withdrawn and no longer applied.

The "practical approach" meant that foreign purchaser additional duty was not charged where it could be shown that no foreign persons have benefitted from the trust and there is no intention that a foreign person would benefit from the trust.

The SRO will continue to apply the "practical approach" to dutiable transactions where contracts of sale are entered into before 1 March 2020.

However, from 1 March 2020, the SRO will now strictly apply the foreign purchaser additional duty provisions to all discretionary trusts (including family discretionary trusts), so that if a discretionary trust has any potential foreign beneficiary, the trust will generally be treated as a foreign trust for duty purposes.
13 March 2020
Federal Government unveils coronavirus stimulus package
The Federal Government has announced today a $17.6 billion economic stimulus package, in a bid to keep Australians in jobs, as the economy will likely be severely impacted by the coronavirus.
19 March 2020
Government released more details in relation to businesses impacted by COVID-19
Since the Federal Government announced the economic stimulus package, some more details have become available in relation to some of the concessions available.

We must note that full details are still unknown, at this time, as the stimulus package will be legislated in four separate parts and Parliament does not sit again until 23 March 2020.
20 March 2020
Response to Impact of COVID-19
The business disruption of COVID-19 is real and moving fast. We understand the social and economic implications this is causing and the importance of implementing management policies and strategies to get through this crisis from a financial and operational perspective.
24 March 2020
Victorian Government announces "concessions" for Payroll tax, Land tax and Liquor licence fees
The Victorian Government has announced a range of concessions to support small and medium sized businesses and help these businesses retain employees in response to impact of COVID-19
24 March 2020
Banks announce "deferral" of loan repayments for up to 6 months
Australia's banks have announced that small businesses who are affected by COVID-19 will be eligible to have their loan repayments (principal & interest and interest only) "deferred" for six months, starting Monday 23 March 2020.

At the end of the deferral period, small businesses are not required to pay any lump sum as a catch-up payment; it is a clear six month deferral.
25 March 2020
Government Stimulus Stage 2 - Early Release of Super
The Federal Government released Stage 2 of its Stimulus Package this week and the measures have now been passed into law.

In particular, two superannuation concessions have been announced, to assist individuals which have been financially impacted by COVID-19, including:

Introducing a new concession to expand the circumstances where an individual can access their superannuation early; and
Temporarily reducing the superannuation minimum drawdown amounts for account-based pensions.
26 March 2020
Government Stimulus Stage 2 - Business Cash Flow Assistance
The Federal Government released Stage 2 of its Stimulus Package this week and the measures have now been passed into law.

In particular, some of the concessions announced as part of Stage 1 of the Stimulus Package have now been expanded and increased, to provide cash flow assistance for eligible businesses (to manage cash flow challenges and to help businesses retain employees), in the form of:

Specific payments that are based on the amount of PAYG withheld from salary and wages paid to employees (and other similar payments such as termination payments, director's fees and payments to contractors that are subject to voluntary withholding arrangements); and

Wage subsidies paid to eligible employers who retain an apprentice or trainee.
27 March 2020
COVID-19 Tax Concessions, Key Dates & Fact Sheets
We understand that since 12 March 2020, when the Federal Government announced Stage 1 of its Stimulus Package, there has been an extraordinary amount of technical information released in relation to the various concessions available to assist individuals and businesses during these unprecedented times.
30 March 2020
Temporary relief for financially distressed businesses in response to COVID-19
The Australian Government has announced temporary amendments to defer financially distressed businesses being bankrupted or wound up.
31 March 2020
Government Announces New JobKeeper Payment
The Federal Government announced yesterday another assistance program to help businesses and employees who have been (or will be) impacted financially by the COVID-19 pandemic.

The JobKeeper Payment will be made available to businesses, in the form of a subsidy from the Government, to assist them to continue paying their employees. For employees, this should mean they can keep their job and earn an income, even if their hours have been cut.

The JobKeeper Payment is a temporary subsidy program (for up to 6 months) open to businesses and the self-employed, and will provide $1,500 per fortnight per employee.

The program will be managed by the Australian Taxation Office (ATO) and details will be verified via the Single Touch Payroll (STP) payroll reporting system.
31 March 2020
Victorian Government Launches $500M Business Support Fund
The Victorian Government has launched the $500 million Business Support Fund to help small businesses survive the economic impacts of the COVID-19 pandemic and keep people in work.

Funding of a one-off grant of $10,000 per business is available and allocation will be made through a grant process.
2 April 2020
Tips to Assist Businesses to Prepare for Impact of COVID-19
As you are aware, our business landscape is rapidly changing as the impacts of COVID-19 expand. Not only are we concerned for the personal health (of business owners and employees), but also the direct commercial impacts of either Government restrictions, supply chain restrictions or the overall economic slowdown.

In short, COVID-19 will impact many businesses, which could place their immediate future in serious jeopardy, and the duration of this impact is currently unknown.

As part of any business risk management plan, there are numerous actions you should consider taking now, to prepare your business for COVID-19
3 April 2020
JobKeeper Payment for Self-Employed and Sole Traders
On Monday, the Federal Government announced details of the new JobKeeper Payments program, and sole traders and self-employed people will need to consider if they are eligible to access the wage subsidy program.

Sole traders and self-employed people are included in the group of eligible employers, and the available $1,500 per fortnight subsidy will start flowing to eligible employers and employees from the first week of May.

We have prepared the following Q&A to help explain the details which are currently available.