If it’s the end of the month, then it’s time to catch up on the November 2017 tax news! Let’s find out what the ATO (Australian Taxation Office) has been up to this month.
ASIC penalties “the cost of doing business”
The Australian Securities and Investment Commission (ASIC) will increase penalties for the corporate and financial sector Misconduct. They want to stop the perceived misconception of the fines as the cost of doing business.
What will be the impact of these changes?
To expand the range of civil penalty provisions and increase maximum civil penalty amounts in the Corporations Act 2001 and National Consumer Credit Protection Act 2009 (Credit Act):
- for individuals, 2,500 penalty units ($525,000)
- for corporations, the greater of 12,500 penalty units ($2.625 million), or three times the benefit gained (or loss avoided) or 10% annual turnover
What will this look like?
- increases from $200,000 (individuals) and $1 million (corporations) in the Corporations Act
- 2,000 penalty units ($420,000) for individuals and 10,000 penalty units ($2.1 million) for corporations in the Credit Act
ASIC is also planning to expand their influence to remove benefits illegally obtained or losses avoided. Maximum terms of imprisonment will also be increased for a range of offences to the highest maximum penalty available; 10 years imprisonment and substantial fines.
R&D claims are under increased scrutiny
The Minister for Revenue and Financial Services has issued a media release indicating the recent succession prosecution of a tax agent. He has been sentenced to 29 months of imprisonment for his involvement in a scheme relating to R&D tax incentive claims.
The ATO has already announced they will be focusing on claims made under the R&D tax incentive. The Serious Financial Crime Task Force have also become involved in seeking to identify serious abuse of the R&D system.
Whether you’re a practitioner or a client if you want to access R&D tax offsets, here’s what you need to do:
- ensure the basic eligibility criteria are met
- make sure you have appropriate and relevant documentation to support your R&D claims
You might also be interested in: October Tax And Accounting News: All You Need To Know
Foreign dividends received through a partnership or trust
The ATO completed its procedures on the application of the non-portfolio dividend exemption rules. Specifically, when dividends paid by a foreign company pass through a partnership or trust rather than being paid directly to an Australian company.
Subdivision 768-A makes sure dividends paid by a foreign company to an Australian resident company are non-assessable non-exempt income as long as the Australian company holds participation interests in the foreign company of at least 10%. The rules allow the exemption to apply where the 10% interest is held directly or indirectly through one or more interposed trusts or partnerships.
The ATO confirms that the rules cannot generally apply when the dividends are received by a discretionary trust, even if they are subsequently distributed to a corporate beneficiary.
The updates and improved GST property decision tool
This GST property decision tool helps you determine the GST implications for your property transactions. The tool has been re-designed and improved to make it easier for you to use and access on your mobile devices.
The GST property decision tool can assist you with:
- a series of questions to help you determine the GST classification of real property transactions
- guidance and explanations to work through the tool
- links to additional information
- a decision of how GST applies to your property transaction.
Is it safe and secure to use?
The tool doesn’t record any of your personal information. What’s more, it gives you the option to remain anonymous. It’s as safe and secure as it can be!
Be part of helping to shape the future
The ATO is on the lookout for new members to join their Small Business Stewardship Group!
What is the Small Business Stewardship Group?
An innovative team of small business people and industry representatives who are always ready to identify opportunities and share their insight on how to improve tax and super systems.
Meetings are held three times each year by its leader, the ATO’s Deputy Commissioner.
This can be a great opportunity for you to get involved in a project that can shape your future!
Hurry up, the deadline to submit your application is November 30. Find more details here.
FBT: Eat, drink and be merry! Join this FREE webinar.
If you’re an employer who provides food and drinks to your employees and clients, we advise you to join this free event organised by the ATO.
The speakers will discuss common scenarios involving entertainment with food and drink. They will also share some practical examples to help you understand the FBT implications, such as a staff morning tea, business lunches, or Christmas parties.
The webinar will be held on Thursday, 30 November at 1pm. Register here.
Want to know more about how these updates affect you?
One of our specialists here at Shuriken Consulting is ready to assist you with any questions you might have about the latest tax and accounting updates. Get in touch with us today: