State of Tax Policy Report: May 2022
Published:
The State of Tax Policy Report: April 2022 (SOTP Report) sets out the status of the key tax and superannuation legislative measures, following the dissolution of the 46th Parliament ahead of the Federal election to be held on 21 May 2022.
The Tax Institute’s Tax Policy and Advocacy (TPA) team prepare this Report periodically to assist our members in keeping track of the extensive list of enacted, and announced but unenacted, measures.
Each edition of the SOTP Report is updated to reflect the most current developments, and a number of measures reported in previous SOTP Reports are removed to contain the length of the Report. These previously reported measures can be found in earlier editions of this Report, which are available in your member portal.
Notes |
1 This Report includes only those measures which we consider are most relevant to our members. The full content of each Bill or Act (i.e. other schedules to the relevant Bill or Act not listed in this Report) is available by clicking on the relevant hyperlink containing the title of the Bill or Act |
2 The selected enacted Acts listed are those that received Royal Assent during the 46th (recently ended term of) Parliament, that commenced on 2 July 2019. The House of Representatives adjourned on Wednesday 30 March 2022 and was dissolved on 11 April 2022, along with half of the Senate and will resume after the outcome of the election. |
3 Page cross-references throughout the Report refer to the relevant page in this Report. |
4 A list of acronyms and abbreviations is set out on page 3 of this Report. |
5 For guidance, insights and resources on many of these measures, visit our member portal. |
Legislative references | |
Income Tax Assessment Act 1936 | ITAA 1936 |
Income Tax Assessment Act 1997 | ITAA 1997 |
Income Tax Rates Act 1986 | ITRA |
Income Tax (Transitional Provisions) Act 1997 | IT(TP)A |
Fringe Benefits Tax Assessment Act 1986 | FBTAA |
Superannuation Guarantee (Administration) Act 1992 | SGAA |
Superannuation Industry (Supervision) Act 1993 | SISA |
Taxation Administration Act 1953 | TAA |
Acronyms and other abbreviations | |
AAT | Administrative Appeals Tribunal |
ABN | Australian Business Number |
AEDT | Australian Eastern Daylight Time |
AMIT | Attribution managed investment trust |
ANAO | Australian National Audit Office |
APRA | Australian Prudential Regulation Authority |
ATO | Australian Taxation Office |
Board | Board of Taxation |
CCIV | Corporate collective investment vehicle |
CGT | Capital gains tax |
Commissioner | Commissioner of Taxation |
CPI | Consumer price index |
Director ID | Director identification number |
DGR | Deductible gift recipient |
DGTO | Digital games tax offset |
Div | Subdiv | Division | Subdivision |
ECPI | Exempt current pension income |
ESS | Employee share scheme |
FBT | Fringe benefits tax |
FHSSS | First Home Super Saver Scheme |
GDP | Gross domestic product |
GST | Goods and Services Tax |
IAWO | Instant asset write-off |
IGTO | Inspector-General of Taxation and Taxation Ombudsman |
LITO | Low Income tax offset |
LMITO | Low and Middle Income tax offset |
MYEFO | Mid-Year Economic and Fiscal Outlook |
NALI | Non-arm’s length income |
NANE | Non-assessable non-exempt (income) |
OBU | Offshore banking unit |
PAYG | Pay as you go |
PDV tax offset | Post, digital and visual effects tax offset |
PSI | Personal services income |
R&D | Research and development |
R&DTI | Research and Development Tax Incentive |
s | ss | Section | Sections |
SAPTO | Seniors and pensioners tax offset |
SMSF | Self-managed superannuation fund |
SG | Superannuation Guarantee |
STP | Single Touch Payroll |
TFE | Temporary full expensing |
TPAR | Taxable Payments Annual Report |
TPRS | Taxable Payments Reporting System |
UPE | Unpaid present entitlement |
WHM | Working holiday maker |
Legislation
Key Acts enacted prior to issue of previous State of
Tax Policy Report: December 2021
Measure | Details of enacted Act | Start date |
Personal income tax relief | Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019 Enacted on 5 July 2019 as Act No. 52 of 2019 Increases the base and maximum amounts of the Low and Middle Income tax offset (LMITO) for the 2018–19 to 2021–22 income years to $255 (from $200) and $1,080 (from $530), respectively.
(See further personal income tax relief in the following two items below) | Changes to LMITO: 2018–19 to 2021–22 income years Changes to income tax thresholds and LITO: 2022–23 and later income years Changes to income tax rates: 2024–25 and later income years |
Accelerating the Personal Income | Schedule 1 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 Enacted on 14 October 2020 as Act No. 92 of 2020 Reduces the tax payable by individuals in the
Replaces the existing LITO with a new increased LITO for the 2020–21 and later income years of up to $700 (instead of up to $445). Retains the LMITO for an additional year (being the 2020–21 income year). Base amount is $255 up to a maximum of $1,080. (See extension of LMITO to 2021–22 and the increase to the offset for 2021–22 on page 17) | Changes to income tax rates: 2020–21 and later income years Change to LITO: 2020–21 and later income years Change to LMITO: 2020–21 income year |
(continued ...) | No changes have been made to the already legislated third and final stage of the Personal Income Tax Plan that will provide further personal income tax cuts from 1 July 2024. Under the third and final stage, the tax payable by individuals in the 2024–25 and later income years will be reduced by:
| 2024–25 and later income years |
Director identification number regime | Schedule 2 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2019 Enacted on 22 June 2020 as Act No. 69 of 2020 Amends the Corporations Act 2001 to introduce a director identification number (director ID) requirement which requires all directors to confirm their identity. The director ID is a unique identifier for each person who consents to being a director.1 | 1 November 2021 |
STP reporting — child support information | Schedule 2 to the Treasury Laws Amendment (2020 Measures No. 2) Act 2020 Enacted on 3 September 2020 as Act No. 79 of 2020 Broadens the amounts that employers can voluntarily report under the STP rules to include employer withholding of child support deductions from salary or wages and child support garnishee amounts from salary or wages that are paid to the Child Support Registrar.2 On 3 February 2021, the ATO registered a legislative instrument which outlines the Commissioner’s intention for voluntary reporting to commence from 4 January 2021, with employers required to have commenced reporting via the new Phase 2 pay event by 1 January 2022.3 On 9 October 2021, the ATO published guidance on its website to assist employers to understand and comply with the requirements under STP Phase 2 reporting. | 1 January 2022 |
Tax-free treatment of certain small business grants relating to COVID-19 recovery | Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 5) Act 2020 Enacted on 11 December 2020 as Act No. 118 of 2020 Inserts new s 59-97 into the ITAA 1997 that makes payments received by eligible businesses in the 2020–21 income year under certain grant programs administered by a State or Territory Government or authority non-assessable non-exempt (NANE) income so that these payments are not subject to income tax by the Commonwealth.4 Schedule 1 to the Treasury Laws Amendment Enacted on 30 June 2021 as Act No. 71 of 2021 Extends the concessional tax treatment in s 59-97 of the ITAA 1997 to payments received by eligible businesses in 2021–22 under eligible COVID-19 recovery grant programs administered by a State or Territory Government (or a State or Territory authority).5 Refer to page 21 for associated legislative instruments. | Assessments for the 2020–21 and later income years
Exempts payments made in the 2021–22 financial year |
Tax-free treatment of payments from COVID-19 business support programs | Schedule 3 to the Treasury Laws Amendment Enacted on 10 August 2021 as Act No. 79 of 2021 Inserts new s 59-98 into the ITAA 1997 that treats payments received by eligible businesses in the 2021–22 income year under certain Commonwealth COVID-19 business support programs administered by the Commonwealth as NANE income so that the payments are not subject to income tax by the Commonwealth.6 | Assessments for the 2021–22 and later income years |
Tax-free treatment of COVID-19 disaster payments | Schedule 5 to the Treasury Laws Amendment Enacted on 10 August 2021 as Act No. 79 of 2021 Inserts new s 59-96 into the ITAA 1997 that treats Commonwealth COVID-19 disaster payments to individuals as NANE income so that the payments are not subject to income tax by the Commonwealth. | Assessments for the 2020–21 and later income years |
Requirement for actuarial certificates for certain superannuation funds | Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 6) Act 2021 Enacted on 13 September 2021 as Act No. 111 of 2021 Amends s 295-387 of the ITAA 1997 to remove the requirement for superannuation trustees to provide an actuarial certificate when calculating exempt current pension income (ECPI) using the proportionate method, where all members of the fund are fully in retirement phase for all of the income year. | 1 October 2021 |
Australian Screen Production Incentive Reforms | Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 5) Act 2021 Enacted on 7 December 2021 as Act No. 127 of 2021 Amends Div 376 of the ITAA 1997 to: | Location offset and producer offset: films commencing principal photography on or after 1 July 2021 PDV tax offset: films commencing post, digital and visual effects production on or after 1 July 2021 |
Key Acts enacted since issue of previous State of Tax Policy Report: December 2021
Measure | Details of enacted Act | Start date |
Corporate collective investment vehicles (CCIV): tax framework | Schedule 5 to the Corporate Collective Investment Vehicle Framework and Other Measures Act 2021 Enacted on 22 February 2022 as Act No. 8 of 2022 Inserts new Subdiv 195-C into the ITAA 1997 to specify the tax treatment for the newly established CCIV. The amendments give effect to the core CCIV tax framework to ensure that the CCIV is taxed on a Draft regulations and rules were released on 21 December 2021 that implement key elements of the CCIV regulatory framework. | 1 July 2022 |
Temporary loss carry back | Schedule 2 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 Enacted on 14 October 2020 as Act No. 92 of 2020 Allows corporate tax entities with an aggregated turnover of less than $5 billion to carry back a tax loss for any or all of the 2019–20, 2020–21 and 2021–22 income years and apply it against the tax paid in a previous income year as far back as the 2018–19 income year. Part 1 of Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 Enacted on 7 December 2021 as Act No. 127 of 2021 Inserts s 160-16 into Div 160 of the ITAA 1997 to clarify the mechanism through which an entity may change its loss carry back choice. A changed loss carry back choice applies as if it was always the entity’s choice. That is, it takes effect from the day the original choice was made. Schedule 6 to the Corporate Collective Investment Vehicle Framework and Other Measures Act 2021 Enacted on 22 February 2022 as Act No. 8 of 2022 Extends the loss carry back rules by 12 months, allowing eligible corporate tax entities to also claim a loss carry back tax offset in the 2022–23 income year. The extension will allow eligible companies to carry back (utilise) tax losses from the 2022–23 income year to offset previously taxed profits as far back as the 2018–19 income year when they lodge their 2023 income tax return. Companies with aggregated turnover of less than $5 billion are eligible for temporary loss carry-back.9 Companies that do not elect to carry back losses under this measure can still carry losses forward as normal. | Losses from 2019–20 to 2022–23 can be carried back against taxed profits from 2018–19 to 2021–22 A loss carry back tax offset can be claimed in the 2021, 2022 or 2023 company income tax return |
Retirement income covenant | Schedule 9 to the Corporate Collective Investment Vehicle Framework and Other Measures Act 2021 Enacted on 22 February 2022 as Act No. 8 of 2022 Amends the SISA to insert a new covenant (new s 52(8A)) that aims to ensure trustees maximise the expected retirement income of beneficiaries. This covenant does not apply to trustees of self-managed superannuation funds (SMSFs). | 1 July 2022 |
ESS: removing cessation of employment as a taxing point | Schedule 10 to the Corporate Collective Investment Vehicle Framework and Other Measures Act 2021 Enacted on 22 February 2022 as Act No. 8 of 2022 Amends the ITAA 1997 to remove cessation of employment as a taxing point for employee share scheme (ESS) interests that are subject to deferred taxation. | 1 July 2022 |
Removing the monthly minimum income threshold to count towards the SG
| Schedule 1 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends s 27 of the SGAA to remove the $450 per month income threshold before an employee’s salary or wages count towards the Superannuation Guarantee (SG). This will expand the SG to cover employees who earn less than $450 of salary or wages in a calendar month from a single employer. | 1 July 2022 |
FHSSS maximum releasable amount | Schedule 2 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends s 138-35 to Schedule 1 of the TAA to increase the total limit on the maximum amount of voluntary concessional and non-concessional contributions made from 1 July 2017 that are eligible to be released and used under the First Home Super Saver Scheme (FHSSS) from $30,000 to $50,000. | 1 July 2022 |
Downsizer contributions | Schedule 3 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends s 292-102 of the ITAA 1997 to allow individuals aged 60 and older to make downsizer contributions to their superannuation plan from the proceeds of selling their home. | 1 July 2022 |
Work test reforms for superannuation contributions | Schedule 4 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends ss 290-165 and 292-85 of the ITAA 1997 to apply the work test to individuals aged between 67 to 75 years who claim a deduction for personal superannuation contributions. This change facilitates the repeal of the existing work test that applies to non-concessional and salary sacrifice contributions. Schedule 4 to the Act also amends the ITAA 1997 to allow such individuals to make or receive | 1 July 2022 |
Segregated current pension assets | Schedule 5 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amend the ITAA 1997 to allow superannuation trustees to choose their preferred method of calculating ECPI when they have member interests in both accumulation and retirement phases for part, but not all, of the income year. | 2021–22 and later income years
|
Extension of temporary full expensing of depreciating assets | Schedule 6 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends Subdiv 40-BB and ss 328-180 and 328-181 of the IT(TP)A to extend the temporary full expensing regime by 12 months, until 30 June 2023, to provide eligible businesses with additional time to access this measure. | Eligible assets acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023 |
Medicare Levy Surcharge income thresholds | Schedule 1 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Amends the Medicare Levy Act 1986 and the A New Tax System (Medicare Levy Surcharge — Fringe Benefits) Act 1999 to increase:
| 2021–22 and later income years
|
Deductibility of COVID-19 tests | Schedule 2 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Inserts new s 25-125 into the ITAA 1997 by allowing an income tax deduction for taxpayers who incur relevant COVID-19 testing expenses in gaining or producing their assessable income. The deduction applies to relevant expenses incurred on or after 1 July 2021. Broadly, the legislation provides a specific deduction for a taxpayer’s loss or outgoing incurred in gaining or producing assessable income. The loss or outgoing must be incurred in respect of a COVID-19 test with the purpose of determining whether the taxpayer should attend or remain at a place of work. The exemption from FBT for tests provided by employers to their employees for work purposes is given effect through the operation of the ‘otherwise deductible rule’. | Losses and outgoings on or after 1 July 2021 |
Employee share schemes | Schedule 4 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Provides regulatory relief to ESSs that meet particular requirements in order to make it easier for businesses to create ESS. The Act implements:
| 30 September 2022 |
Varying the GDP uplift factor for PAYG and GST instalments | Schedule 5 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Amends the TAA 1953 to reduce the GDP adjustment factor for the 2022–23 income year to 2%. The GDP adjustment factor is applied by the Commissioner to work out the amount of PAYG and GST instalments payable by a taxpayer in certain circumstances. | PAYG and GST instalments for instalment quarters that fall due for the 2022–23 income year |
Low and Middle Income tax offset | Schedule 6 to the Treasury Laws Amendment (2021 Measures No. 4) Act 2021 Enacted on 30 June 2021 as Act No. 72 of 2021 Amends the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 to make the LMITO available in the 2021–22 income year, with the offset now ceasing to be available in the 2022–23 income year and later income years. Schedule 6 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Amends the ITAA 1997 to increase the LMITO for the 2021–22 income year by $420 for all taxpayers who are able to receive the LMITO. | 2021–22 income year |
2022 cost of living payment ($250) | Schedule 8 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 Provides for the payment of a 2022 cost of living payment of $250 to Social Security and Veterans’ income support and compensation recipients, Farm Household Allowance recipients, and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Veteran Gold Card. To qualify for the 2022 cost of living payment, a person must be residing in Australia and be receiving one of the qualifying payments or hold or have claimed and qualified for one of the qualifying concession cards on 29 March 2022. | 1 April 2022 |
Fuel duty consequential amendments | Schedule 9 to the Treasury Laws Amendment (Cost of Living Support and Other Measures) Act 2022 in conjunction with Excise Tariff Amendment (Cost of Living Support) Act 2022 (the Excise Act) and the Customs Tariff Amendment (Cost of Living Support) Act 2022 Enacted on 31 March 2022 as Act No. 14 of 2022 The Excise Act and Customs Act amend the Excise Tariff Act and the Customs Tariff Act respectively to temporarily reduce the excise duty rates and excise equivalent customs duty rates for fuels, including petrol and diesel and similar petroleum-based products, including oils and grease. | From 12:01am on 30 March 2022 until 28 September 2022 |
Tax depreciation incentive Acts
Measure | Details of enacted Act | Start date |
Instant asset | Schedule 1 to the Coronavirus Economic Response Package Omnibus Act 2020 Enacted on 24 March 2020 as Act No. 22 of 2020
| 12 March 2020 to 30 June 202010
|
Backing business investment incentive | Schedule 2 to the Coronavirus Economic Response Package Omnibus Act 2020 Enacted on 24 March 2020 as Act No. 22 of 2020 Allows businesses with aggregated turnovers of less than $500 million to deduct capital allowances for depreciating assets at an accelerated rate (50% in the first year). | 12 March 2020 to 30 June 2021
|
Extending the instant asset write-off | Schedule 4 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020 Enacted on 19 June 2020 as Act No. 61 of 2020 Allows businesses with an aggregated turnover of less than $500 million to immediately deduct the cost of a depreciating asset where the asset is purchased for less than $150,000 and is first used or installed ready for use for a taxable purpose by 31 December 2020. This extends the $150,000 IAWO by six months that would otherwise have ended on 30 June 2020. | 1 July 2020 to 31 December 2020 |
Temporary full expensing (TFE) of depreciating assets | Schedule 7 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 Enacted on 14 October 2020 as Act No. 92 of 2020 Allows businesses with an aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciating assets (including improvements to these assets). (See further amendment below to extend the measure by 12 months to 30 June 2023.)
| Depreciating assets first held, and first used or installed ready for use, for a taxable purpose at or after 7:30pm AEDT on 6 October 2020 to 30 June 2022 |
Temporary full expensing of depreciating assets — amendments | Schedule 1 to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020 Enacted on 17 December 2020 as Act No. 141 of 2020 Amends the TFE and backing business investment provisions in the income tax law to provide greater flexibility for entities to access the concessions by:
Schedule 1 to the Act also clarifies the intended operation of TFE by ensuring a balancing adjustment event occurs if a depreciating asset has its decline in value worked out under the TFE provisions and, in a later income year, the asset no longer meets the test regarding its use or its location in Australia. | 1 January 202112 |
Extension of temporary full expensing of depreciating assets | Schedule 6 to the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 Enacted on 22 February 2022 as Act No. 10 of 2022 Amends Subdiv 40-BB and ss 328-180 and 328-181 of the IT(TP)A to extend the TFE regime by 12 months, until 30 June 2023, to provide eligible businesses with additional time to access this measure. | Eligible assets acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023 |
Registered legislative instruments
Measure | Details of registered instrument | Start date |
Superannuation — minimum pension draw down rates | Schedule 10 to the Coronavirus Economic Response Package Omnibus Act 2020 Enacted on 24 March 2020 as Act No. 22 of 2020 Halves the minimum payment amounts for account-based pensions for the 2019–20 and 2020–21 financial years. The current rates for minimum annual payments for superannuation income streams can be found on the ATO website. Superannuation Legislation Amendment (Superannuation Drawdown) Regulations 2022 Legislative instrument registered on 1 April 2022 Extends the temporary reduction in superannuation account-based pension minimum draw down rates for a further year to 30 June 2023. This builds on the previous announcement and legislative instrument that extended the superannuation minimum draw down until 30 June 2022. | 2019–20 to 2022–23 financial years |
Eligible COVID-19 business grants and support programs | Section 59-97 of the ITAA 1997 treats monies from eligible grants provided by State and Territory Governments to be treated as NANE income. The following legislative instruments list the eligible grants: Legislative instrument registered on 24 December 2020 Legislative instrument registered on 20 July 2021 | Eligible payments received by eligible businesses in the 2020-21 and 2021-22 income years |
(continued ...) |
Legislative instrument registered on 23 August 2021 Legislative instrument registered on 4 April 2022 | Eligible payments received by eligible businesses in the 2020-21 and 2021-22 income years |
Alternative method for calculating tax free and taxable components of certain superannuation benefits for veterans | ATO legislative instrument MS 2022/1 Instrument registered on 4 January 2022 Provides that certain superannuation benefits paid to veterans from particular schemes may be taxed as superannuation lump sums as rather than superannuation income streams. The alternative method specified in this instrument requires each superannuation benefit paid under the pension to be taken to have the same tax free component and taxable component proportions to the superannuation interest that supports the pension. In effect, the alternative method will result in a tax free component proportion for a superannuation benefit (that is a superannuation lump sum payment following the Douglas13 decision) that is the same as it would have been if it was a superannuation income stream benefit payment (as it was treated prior to the Douglas decision). | Applies to certain superannuation benefits that are superannuation lump sums paid during the |
Lapsed bills
On 10 April 2022, the Prime Minister, the Hon Scott Morrison, called a Federal election for 21 May 2022, resulting in the current term of Parliament (46th Parliament) to end and the dissolution of the House of Representatives and half of the Senate.
As a result of the writs for the general election being issued by the Governor-General on 11 April 2022, all Bills before the Parliament lapse as there is no provision for proceedings to be carried over from one Parliament to the next. New Bills must be introduced into the new Parliament in order for the proposed measures to be enacted as law.
Those Bills that:
- were before the House or Representatives when the writs were issued lapsed on 11 April 2022 (described as ‘lapsed at dissolution’);
- are before the Senate will lapse on the start of the 47th Parliament (described as ‘lapsed at end of Parliament’).
Measure | Details of lapsed Bill | Start date |
Ending JobKeeper profiteering | This Private Member’s Bill14 the Coronavirus Economic Response Package Amendment (Ending JobKeeper Profiteering) Bill 2021, Before the Senate15 Proposes to amend the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to:
| The day after the enabling legislation receives Royal Assent |
(continued ...) | On 24 June 2021, the Bill was referred to the Senate Economics Legislation Committee for inquiry and report by 15 October 2021. |
|
Sharing economy reporting regime | Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 7) Bill 2021 Before the Senate16 Proposes to amend s 396-55 of Schedule 1 to the TAA to require electronic platform operators to provide information on transactions made through the platform to the ATO. Implements a recommendation of the report of the Black Economy Taskforce. | Transactions in relation to the supply of taxi travel and short-term accommodation: from 1 July 2022 For all other transactions: from 1 July 2023 |
Removing the self-education expenses threshold | Schedule 3 to the Treasury Laws Amendment (2021 Measures No. 7) Bill 2021 Before the Senate16 Proposes to repeal s 82A of the ITAA 1936 and makes consequential amendments to remove the $250 | 2022–23 and later income years Consequential amendments to the FBTAA will apply to the FBT year starting on 1 April 2023 and to later FBT years |
Australian patent box regime for medical innovations | Treasury Laws Amendment (Tax Concession for Australian Medical Innovations) Bill 2022 Before the House of Representatives Proposes to amend the ITAA 1997 to introduce concessional tax treatment for ordinary and statutory income derived by a corporate taxpayer from exploiting a medical or biotechnology patent for income years commencing on or after 1 July 2022. (See related announcement on page 38) | Applies to patents granted or issued after 11 May 2021 in respect of income years starting on or after 1 July 2022 |
Increased Tribunal powers for small business tax decisions | Schedule 3 to the Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022 Before the House of Representatives Proposes to amend the TAA 1953 to enable small business entities to apply to the Small Business Taxation Division of the AAT for an order staying, or otherwise affecting, the operation or implementation of decisions of the Commissioner that are being reviewed by the AAT. | Applications for review made to the AAT on or after the day after Royal Assent
|
Assisting businesses to meet their record-keeping obligations | Schedule 1 to the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 Before the House of Representatives Proposes to amend Schedule 1 to the TAA 1953 to empower the Commissioner to direct an entity to complete an approved record-keeping course where the Commissioner reasonably believes the entity has failed to comply with its tax-related record-keeping obligations as an alternative to existing financial penalties. | 3 months after the day of Royal Assent |
Intangible asset depreciation | Schedule 3 to the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 Before the House of Representatives Proposes to amend the ITAA 1997 to provide taxpayers to choose whether to self-assess the effective life of eligible depreciating intangible assets (such as patents, registered designs, copyrights and in-house software), held on or after 1 July 2023, or to continue to use the tax effective life currently specified in the law.17 | Applies to certain intangible depreciating assets that start to be held on or after 1 July 2023
|
Recovery grants for Cyclone Seroja | Schedule 5 to the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 Before the House of Representatives Proposes to amend the ITAA 1997 to provide further support for small businesses and primary producers impacted by Cyclone Seroja in April 2021. This Schedule proposes to treat grants received in relation to Cyclone Seroja under Category C of the Disaster Recovery Funding Arrangements 2018 as NANE income for income tax purposes. | Applies to grants paid in the 2021–22 and later income years
|
Minor and technical amendments | Schedule 6 to the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 and the Income Tax Amendment (Labour Mobility Program) Bill 2022 Before the House of Representatives Proposes to reduce the effective tax rate on certain income earned by foreign resident workers participating in the Australian Agriculture Worker Program or the Pacific Australia Labour Mobility scheme from 32.5% to 15%. | Apply in relation to salary, wages, commission, bonuses or allowances paid to an employee under a relevant program on or after 1 March 2022 |
Tax treatment for new or revised visa programs | Schedule 7 to the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 Before the House of Representatives Proposes to make various miscellaneous and technical amendments, including:
|
The day after Royal Assent The first day of the quarter after Royal Assent The day after Royal Assent
|
Exposure draft legislation
At the time of publication, exposure draft legislation and regulations had been released for comment for the measures set out in the table below. The Bills had not been introduced into Parliament.
Measure | Details of exposure draft Bill/Regulation | Start date |
Reforms to reporting and transparency of the charity sector | An exposure draft of the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 3) Regulations 2021 was released on 20 September 2021. The draft Bill proposes to implement two reforms to reduce red tape for, and increase transparency of, the charity sector. The reforms arise from the Government’s agreement to recommendations in the Australian Charities and Not-for-profits Commission Legislation Review 2018. The draft Bill proposes to make the following amendments:
| Regulations increasing the annual revenue thresholds apply from the 2021–22 financial year19 Changes to related party disclosures apply from the
|
(continued ...) | Provide an exemption for medium registered charities and large registered charities with only one remunerated key management person from the requirement to disclose, as part of their related party transactions, aggregate remuneration paid to responsible persons and senior executives. |
|
Working Holiday Makers and Seasonal Labour Mobility Program | An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Miscellaneous and Technical Amendments No. 2 and associated draft regulations, the Treasury Laws Amendment (Measures for Consultation) Regulations 2021: Miscellaneous and Technical Amendments No. 2, were released on 24 September 2021. The draft Bill and draft regulations seek to ensure the law operates as intended by correcting technical or drafting defects, removing anomalies and addressing unintended outcomes in laws under the Treasury’s portfolio. The draft Bill and draft regulations include the following proposed changes to tax laws:
| Changes impacting WHMs will apply to:
Changes to the Seasonal Labour Mobility Program will apply from 1 July 2019 |
FBT exemption for income tax exempt not-for-profit private health insurers | An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Minor and technical amendments Autumn 2022 was released on 2 December 2021. Schedule 1 to the draft Bill proposes to amend s 57A of the FBTAA to fix an unintended outcome affecting income tax exempt not-for-profit private health insurers operating hospitals that inadvertently excluded them from accessing the exemption in respect of their hospital employees. | Retrospectively to the 2017–18 and later FBT years |
Minor superannuation amendments | An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Regulations 2021: Miscellaneous and Technical Amendments Autumn 2022 was released on 2 December 2021. The draft regulations seek to ensure the law operates as intended by correcting technical or drafting defects, removing anomalies and addressing unintended outcomes in laws under the Treasury’s portfolio. Further, the draft regulations propose to amend the Income Tax Assessment (1997 Act) Regulations 2021, the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Regulations 1997 to address unintended outcomes arising from the inability of recipients of certain non-capped defined benefit income streams (that were commenced on or after 1 July 2017) to address excess transfer balance amounts through commutations. | Schedule 1 of the Regulations commences the day after the regulations are registered |
Self-assessment of intangible asset depreciation | An exposure draft of the Treasury Laws Amendment (Measures For Consultation) Bill 2021: Intangible Asset Depreciation was released on 3 December 2021. The draft Bill proposes to amend the tax law to allow taxpayers to choose whether to self-assess the effective life of eligible depreciating intangible assets or to continue to use the tax effective life set by the statute.21 The measure will allow taxpayers to self-assess the tax effective lives of eligible intangible depreciating assets, such as patents, registered designs, copyrights and in-house software. | Assets acquired from 1 July 2023, after the temporary expensing measure has concluded |
Digital Games Tax Offset (DGTO) | An exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2022: Digital games tax offset was released on 21 March 2022. The draft Bill proposes to insert new Div 378 into the ITAA 1997 to introduce a 30% refundable DGTO, for eligible businesses that spend a minimum of $500,000 on qualifying Australian games expenditure. The maximum DGTO that a developer will be able to claim in each year will be $20 million. | 1 July 2022 |
Policy developments and announcements
Discussion papers
Measure | Details of discussion paper | Start date |
Early access to superannuation for crime victims | Consultation Paper released on 27 May 2018 that sets out a proposal to allow victims of certain crimes, such as serious violent crimes, with unpaid or partially paid compensation orders to access money held in their perpetrator’s superannuation to pay the outstanding compensation. Announced on 17 December 2018 as part of the | 12 months after the date the enabling legislation receives Royal Assent |
3-year audit cycle for some SMSFs | Consultation Paper released on 6 July 2018 that sets out a proposal to change the annual audit requirement for SMSFs to a 3-yearly requirement for SMSFs with a good compliance history and no prescribed ‘events’. | 1 July 2019 |
ABN reforms | Consultation Paper released on 20 July 2018 that sets out a proposal to strengthen and modernise the ABN system. | To be advised |
Early release of superannuation | Treasury review of current rules governing early release of superannuation on compassionate grounds and in cases of severe financial hardship. Consultation Paper released on 19 December 2017 Consultation Paper released on 20 November 2018 | To be advised |
Licensing an individual’s fame or image | Consultation paper released on 13 December 2018 that sets out a proposal to amend the tax law to include all remuneration, including payments and non-cash benefits, provided for the commercial exploitation of a person’s fame or image in that individual’s assessable income. (See also ATO advice under development on page 50) | 1 July 2019 |
Division 7A | Proposed reforms to improve the integrity and operation of Division 7A of Part III of the ITAA 1936. Relevant dates: l 18 May 2012 Assistant Treasurer (Labor) commissioned a review by the Board of Taxation (the Board) l 12 Nov 2014 Final report provided by the Board to the Government l 4 Jun 2015 Board’s final report released by Treasury — 15 recommendations to reform Div 7A l 3 May 2016 Budget announcement — proposed reforms to commence from 1 July 2018 l 8 May 2018 Budget announcement — defer reforms to 1 July 2019 l 22 Oct 2018 Release of Treasury Consultation paper l 2 Apr 2019 Budget announcement — defer reforms to 1 July 2020 l 30 Jun 2020 Announcement — proposed reforms to apply to income years commencing on or after the date the enabling legislation receives Royal Assent | Income years commencing on or after the date the enabling legislation receives Royal Assent |
Education and training expense deductions for individuals | Discussion Paper released on 11 December 2020 that sets out a proposal to allow individuals to deduct education and training expenses they incur, where the expense is not related to their current employment. Announced on 2 October 2020. | 2 October 2020 |
Reform of Australia’s electronic surveillance framework | Discussion Paper released on 6 December 2021 by the Department of Home Affairs to provide an overview of how the Government plans to reform Australia’s electronic surveillance legislative framework. Relevantly, these reforms include expanding the ATO’s power to access telecommunications data in order to protect public revenue against serious financial crime. | 2023 |
DGR category for pastoral care services | Consultation Paper released on 2 March 2022 that seeks input on the implementation and design of a new DGR category to enable funds to access DGR status where the fund supports pastoral care services delivered to students in Australian primary and secondary schools. The proposed new category will be implemented through amendments to the ITAA 1997. | TBA |
Distribution guidelines for ancillary funds | Consultation Paper released on 22 March 2022 that sets out a proposal to provide greater flexibility to ancillary funds22 while preserving their philanthropic nature. | TBA |
Announcements
Measure | Details of announcement | Start date |
Removing the capital gains discount at the trust level for MITs and AMITs | Announced on 8 May 2018 as part of the Federal Budget 2018–19. Proposes to prevent MITs and AMITs from applying the 50% capital gains discount at the trust level.
| Income years commencing on or after 3 months after the date the enabling legislation receives Royal Assent23 |
ABN system reforms | Announced on 2 April 2019 as part of the Federal Budget 2019–20. Requires ABN holders:
The start date of the measure was deferred by 12 months, as announced in the Federal Budget 2022–23. For more information, refer to The Tax Institute’s Federal Budget 2022–23 Report. Targeted consultation by the ATO to co-design solutions has concluded. Further consultation to |
1 July 2022 1 July 2023 |
Reducing the compliance burden of FBT record keeping | Announced on 6 October 2020 as part of the Federal Budget 2020–21. Will allow employers to rely on existing corporate records, rather than employee declarations and other prescribed records, to finalise their FBT returns. | 1 April of the FBT year after the date the enabling legislation receives Royal Assent |
(continued ...) | Targeted consultation to understand the existing corporate records for FBT that employers hold has concluded. The information provided during consultation will be used to develop guidance to support legislative changes once they have passed. |
|
Corporate tax residency | Announced on 6 October 2020 as part of the Federal Budget 2020–21. Adopted the key recommendation of the Board and will amend the law to provide that a company that is incorporated offshore will be treated as an Australian resident for tax purposes if it has a ‘significant economic connection to Australia’. | First income year after the date the enabling legislation receives Royal Assent (with option to retrospectively apply new law from 15 March 2017) |
Corporate tax residency — trusts and corporate limited partnerships | Announced on 11 May 2021 as part of the Federal Budget 2021–22. Will consult on broadening the amendments to the corporate tax residency rules to include trusts and corporate limited partnerships which are subject to their own separate but similar residency tests. | Part of consultation on corporate tax residency test amendments announced in Federal Budget 2020–21 |
Individual tax residency rules | Announced on 11 May 2021 as part of the Federal Budget 2021–22. Will replace the individual tax residency rules with a new, modernised framework comprising:
| First income year after the enabling legislation receives Royal Assent |
SMSFs — relaxing residency requirements | Announced on 11 May 2021 as part of the Federal Budget 2021–22. Will relax residency requirements for SMSFs and small APRA-regulated funds by:
This measure will allow SMSF and small | Start of the first financial year after the enabling legislation receives Royal Assent24 |
SMSFs — legacy retirement product conversions | Announced on 11 May 2021 as part of the Federal Budget 2021–22. Will allow individuals to exit a specified range of legacy retirement products, together with any associated reserves, for a two-year period. This will enable the conversion of market-linked, life-expectancy and lifetime products into an account-based pension. | First financial year after the enabling legislation receives Royal Assent |
Expanding Australia’s tax treaty network | Announced on 15 September 2021. The Government plans to enter into 10 new and updated tax treaties by 2023, building on Australia’s existing network of 45 bilateral tax treaties. The planned expansion of Australia’s tax treaty network will cover 80% of foreign investment in Australia and about $6.3 trillion of Australia’s two-way trade and investment. Negotiations with India, Luxembourg and Iceland are occurring this year as part of the first phase of the program. Negotiations with Greece, Portugal and Slovenia are scheduled to occur in 2022 as part of the second phase. | Various |
Transforming Australia’s Payments System | Announced on 8 December 2021. The Treasurer, the Hon Josh Frydenberg MP, announced broad reforms to Australia’s regulation of payment system, including regulatory frameworks to govern the licensing of digital currency exchanges and the conduct of business that hold digital currencies on behalf of other entities. The Board has been asked to advise the Government on an appropriate tax treatment of digital currency assets and transactions. The Board’s work will be based on recommendations made by the Senate’s Select Committee on Australia as a Technology and Financial Centre in its Final Report published in October 2021.25 | The consultation process is expected to continue to the end of 2022 |
Non-arm’s length income (NALI) | Announced on 22 March 2022. The Government will make legislative changes to ensure the NALI provisions operate as envisaged. The Government and Treasury will consult with relevant industry stakeholders on the appropriate operation of the NALI provisions. Further details of the consultation process will be provided as soon as practicable. | 1 July 2022 |
New small business skills and training boost | Announced on 29 March 2022 as part of the Federal Budget 2022–23. Will allow eligible small businesses with an aggregated turnover of less than $50 million to claim an extra 20% (allowing them to claim 120%) of the expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia. Some training will be excluded, including in-house and on-the-job training, and expenditure on external training courses for persons other than employees.26 | The temporary increased deduction will be available for eligible expenditure incurred between 7:30pm AEDT on 29 March 2022 and 30 June 2024 |
New small business technology investment boost | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The measure will allow eligible small businesses with an aggregated turnover of less than $50 million to claim an extra 20% (allowing them to claim 120%) of the cost of the expenditure incurred on business expenses and depreciating assets that support the business’ digital adoption. These include portable payment devices, cyber security systems or subscriptions to cloud based services. An annual cap of $100,000 will apply in each qualifying income year.27 | The temporary increased deduction will be available for eligible expenditure incurred between 7:30pm AEDT on 29 March 2022 and 30 June 2023 |
Expansion of patent box regime | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government announced it will expand the regime to cover the agricultural sector and low emissions technology innovations, the latter being foreshadowed as a possibility in last year’s Budget. In the case of agricultural patents, the regime will apply to corporate taxpayers that commercialise their eligible patents linked to certain listed agricultural and veterinary chemical products. It will apply to patents issued after 29 March 2022 for income years starting on or after 1 July 2023. The same dates will apply for patents related to those low emission technologies identified by the Government in 2020 and 2021 statements. The Government also announced that it will now allow patents granted after 11 May 2021 in the medical and biotechnology sectors to also be eligible for the regime, and recognise patents granted under the US and European regimes as well as those granted by IP Australia. The Government proposes to consult with industry on the detailed design of the patent box expansion. |
1 July 2023
|
Modernisation of PAYG instalment system | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government will allow companies to choose to have their PAYG instalments calculated based on current financial performance better aligning PAYG liabilities with business revenue. The calculation of the PAYG instalments will be extracted from business accounting software, with some tax adjustments. The Government will consult with affected stakeholders, tax practitioners and digital service providers to finalise the policy scope, design and specifications of the measure. Software providers are expected to have systems in place by 31 December 2023. | 1 January 2024 |
Smarter reporting of Taxable Payments Reporting System (TPRS) data | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government will enable businesses the option to report TPRS data through accounting software on the same lodgment cycle as their business activity statements. This will allow the Taxable Payments Annual Report (TPAR) to be lodged electronically on a monthly or quarterly basis instead of annually The Government will consult with affected stakeholders, tax practitioners and digital service providers to finalise the policy scope, design and specifications of the measure. Software providers are expected to have systems in place by 31 December 2023. | 1 January 2024 |
Extension of the ATO’s Tax Avoidance Taskforce | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government will provide $325.0 million in 2023–24 and $327.6 million in 2024–25 to the ATO to extend the operation of the Tax Avoidance Taskforce by 2 years to 30 June 2025.28 | 2023–24 and 2025–26 financial years |
Digitalising trust income reporting | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government will digitalise trust and beneficiary income reporting and processing, by allowing trust income tax returns to be lodged electronically.29 The Government will consult with affected stakeholders, tax practitioners and digital service providers to finalise the policy scope, design and specifications. | 1 July 2024 |
Enhanced sharing of Single Touch Payroll (STP) data | Announced on 29 March 2022 as part of the Federal Budget 2022–23. The Government will commit funds for the development of the IT infrastructure required to allow the ATO to share STP data with State and Territory Revenue Offices on an ongoing basis. | To be confirmed |
Consultation on car parking fringe benefits | Announced on 29 March 2022. The Minister for Housing and Assistant Treasurer, the Hon Michael Sukkar MP, announced that the Government will undertake a public consultation to identify appropriate modifications to the definition of ‘commercial parking station’ with a view to restoring the previously‑understood interpretation, which better reflects the policy intention of the law. The announcement comes in response to recent court decisions30, that have overturned the understanding that parking car parks charging penalty rates for | Car parking fringe benefits provided from 1 April 2022 |
Reviews
Board of Taxation reviews
Review | Details of Board of Taxation review | Status of review |
Review of low value imported goods | On 5 July 2021, the Minister for Housing and Assistant Treasurer, Michael Sukkar, announced that the Board of Taxation (the Board) would undertake a review of the collection of GST on low value imported goods and ensure the system is operating as intended. The Board was asked to report back to the Government by 17 December 2021. | Completed Final Report delivered to the Government in December 2021 and published on 4 April 2022 |
R&D Tax Incentive — Review of the dual-agency administration model | On 11 May 2021, as part of the Federal Budget 2021–22, the Government announced that the Board would undertake a review to evaluate the dual-agency31 administration model for the R&DTI. The Board has been requested to evaluate the R&DTI dual-agency administration model, with a view to identifying opportunities to reduce duplication between the two administrators, simplify administrative processes, or otherwise reduce the compliance costs for applicants. The Government had asked the Board to review the administrative framework of the R&DTI before the end of 2021. | Completed Final Report delivered to the Government in November 2021 and published on 29 March 2022 |
Review of CGT roll-overs | On 12 December 2019, the Minister for Housing and Assistant Treasurer, Michael Sukkar, announced that the Board would undertake a review of the CGT roll-over rules. In February 2020, the Board released a Consultation Guide.32 The Board had been asked to report to Government by 30 November 2020. However, the initial consultation period was extended in response to the COVID-19 pandemic. The Board released a second Consultation Paper for stakeholder review in December 2020.33 The Board provided interim written advice to the Government on 25 March 2021 and will submit a final report by 22 April 2022. | Current Final Report to be delivered to the Government by 29 March 2022 |
Review of the Tax Treatment of Digital Assets and Transactions in Australia | On 8 December 2021, the Treasurer, the Hon Josh Frydenberg MP, announced as part of a broader response to a review on Australia’s payments system and the regulation of digital assets, that the Government would task the Board with undertaking a review into the appropriate policy framework for the taxation of digital transactions and assets in Australia. On 21 March 2022, the Government released the Terms of Reference for a review to be undertaken by the Board into the appropriate policy framework for the taxation of digital assets and transactions in Australia. | Current Final Report to be delivered to the Government by the end of 2022 |
Inspector-General of Taxation and Taxation Ombudsman reviews
Review | Details of IGTO review | Status of review |
Effectiveness of the ATO’s communications of taxpayers’ rights to complain, review and appeal | Title of review: An Investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal The purpose of this IGTO investigation is to confirm how effectively (clearly and completely) the ATO communicates appropriate information to taxpayers and their representatives on the taxpayers’ rights to review, complain and appeal decisions made and actions taken by the ATO. | Completed Final Report released on 14 October 2021 |
ATO’s administration and management of objections | Title of review: The ATO’s Administration and Management of Objections This IGTO investigation will focus mainly on the timeliness in issuing objection decisions, the independence of objection decision makers and the objection decision making process, as well as the interaction between objections processes and other initiatives in minimising or narrowing disputes. | Current Final Report to be delivered in 2022 |
ATO’s exercise of its general powers of administration | Title of review: The Exercise of the General Powers of Administration This IGTO investigation seeks to evaluate the ATO’s use of its general powers of administration granted by tax laws. The IGTO’s review will draw from case studies in its complaints investigation service as well as stakeholder submissions to identify and investigate particular areas raised as examples of exercise of the ATO’s general power of administration that should be investigated. In particular, the IGTO is interested in understanding how broad-based decisions (i.e. those affecting large groups of taxpayers) are identified and determined. As there are limited avenues for taxpayers and tax practitioners to challenge the exercise of the ATO’s general powers of authority, it is important to ensure that processes and procedures underpinning these decisions are robust and effective. | Current Final Report to be delivered in 2022 |
Exercise of the Commissioner’s remedial power | Title of review: The Exercise of the Commissioner’s Remedial Power This IGTO investigation aims to assess how issues are raised for the use of the Commissioner’s remedial power and whether the processes underlying consideration of these matters are sufficiently robust to take into account consideration of relevant factors and expert stakeholder views. This IGTO investigation was prompted by an apparent lack of clarity in these processes. This is important as decisions of the Commissioner in relation to its remedial power are not subject to external merits or judicial review. | Current Final Report to be delivered in 2022 |
Australian National Audit Office performance audits
Audit | Details of ANAO performance audit | Status |
Administration of the JobKeeper Scheme | Audit conducted by the ANAO to assess the effectiveness of the ATO’s administration of the JobKeeper scheme. The ANAO will examine the following questions:
Has the ATO effectively monitored and reported on the operational performance of the scheme? | Completed Final Report published on 4 April 2022 |
Addressing superannuation guarantee | Audit conducted by the ANAO to assess the effectiveness of the ATO’s activities in addressing superannuation guarantee non-compliance. The ANAO will examine the following questions:
| Current Announced on 26 November 2021 Final Report to |
ATO’s engagement with tax agents | Audit conducted by the ANAO to assess the effectiveness of the ATO’s engagement with tax agents in achieving efficient and effective tax and superannuation systems. The ANAO will examine the following questions:
| Current Final Report to be tabled in August 2022 |
Other government reviews
Review | Details of government review | Status |
Venture Capital Tax Concessions Program | Review of the venture capital tax concessions program to ensure the current measures supports genuine | Current Announced on 7 July 2021 Final Report was expected to be delivered to the Government at the end of 2021 |
Parliamentary Committee reviews
Review | Details of Parliamentary Committee review | Status |
Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 [Provisions] | On 2 December 2021, the Senate referred the provisions of the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 to the Senate Economics Legislation Committee. The Bill was referred so the Committee can consider the economy-wide impacts of Schedules 1–5 to the Bill, multinational tax evasion issues, the retirement income covenant, and tax evasion issues arising from employee share schemes. | Completed Final Report was delivered to the Government on 3 February 2022 and was released in February 2022 |
Performance and integrity of Australia’s administrative review system | On 20 October 2021, the Senate referred an inquiry into the performance and integrity of Australia’s administrative review system to the Legal and Constitutional Affairs References Committee. | Current Final Report due to be delivered to the Government by 30 June 202234 |
ATO guidance and information
Key ATO legislative guidance
The following table sets out notable final, draft and proposed ATO guidance on the operation of some recent legislative amendments and key legislative provisions. The ATO’s advice under development webpage contains further information.
Final guidance
Measure | Details of final ATO guidance |
Superannuation funds: NALI
| Final Law Companion Ruling LCR 2021/2 sets out the Commissioner’s view of amendments in Schedule 2 to the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019, concerning the application of the non-arm’s length income (NALI) provisions where a trustee incurs ‘non-arm’s length expenditure’ under a scheme. Date of effect of legislative amendments: 1 July 2018 |
Temporary full expensing | Final Law Companion Ruling, LCR 2021/3 Temporary full expensing, provides guidance in relation to the provisions for temporary full expensing of depreciating assets introduced by the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 and the Treasury Laws Amendment (2020 Measures No. 6) Act 2020. Date of effect of legislative amendments: 6 October 2020 |
Allocation of professional firm profits | Practical Compliance Guideline, PCG 2021/4 Allocation of professional firm profits – ATO compliance approach, sets out the ATO's compliance approach to the allocation of profits or income from professional firms in the assessable income of the practitioner. Date of commencement of ATO approach: 1 July 2022 |
Deductibility of expenses incurred in establishing and administering an employee share scheme (ESS) | Taxation Determination TD 2022/8 sets out the Commissioner’s view on the deductibility of expenses incurred by an employer to establish and administer an ESS. This expense often includes establishing and administering an 'employee share trust'. The Determination applies to arrangements before and after its date of issue. |
Draft guidance
Measure | Details of draft ATO guidance |
Limiting deductions for expenses for holding vacant land | Draft Taxation Ruling TR 2021/D5 provides preliminary guidance in relation to the application of s 26-102 of the ITAA 1997, that was inserted by Schedule 3 to the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019. Date of effect of legislative amendments: 1 July 2019 Expected completion: July 2022 |
Section 100A reimbursement agreements | Draft Taxation Ruling TR 2022/D1 sets out the Commissioner’s preliminary views on the exclusions from a ‘reimbursement agreement’ for:
The Ruling is proposed to apply to arrangements entered into both before and after the Ruling is finalised. This was also accompanied by draft Practical Compliance Guideline PCG 2022/D1 sets out the Commissioner’s compliance approach in relation to s 100A reimbursement agreements, including transitional arrangements. The Commissioner’s compliance approach is proposed to apply to present entitlements conferred both before and after the Guideline is finalised. However, for present entitlements conferred before 1 July 2022, the Commissioner has indicated that it will stand by any administrative position reflected in web guidance published in July 2014, to the extent that it is more favourable to a taxpayer’s circumstances than the draft PCG. See also the Assistant Treasurer’s Media Release on 7 April 2022. The Tax Institute’s two submissions to the ATO on:
Expected completion: To be advised |
UPEs of private company beneficiaries (Division 7A) | Draft Taxation Determination TD 2022/D1 sets out the Commissioner’s proposed view on when the unpaid present entitlement (UPE) of a private company beneficiary will be treated as a loan for which there can be dividend consequences under Division 7A of Part III of the ITAA 1936, as that beneficiary has provided ‘any other form of financial accommodation’ under s 109D(3) of the ITAA 1936 to the trustee. The draft Determination comes as a result of the product of a review of existing guidance in Taxation Ruling TR 2010/3 Income tax: Division 7A loans: trust entitlements and Law Administration Practice Statement PS LA 2010/4 Division 7A: trust entitlements. These ATO products will be withdrawn when TD 2022/D1 is finalised. To the extent that any view in this draft Determination is different to that existing guidance, the view in the draft Determination will be prospective and will apply to present entitlements created on or after 1 July 2022. The existing guidance will continue to apply to current arrangements. The Tax Institute’s submission to the ATO on their draft Taxation Determination, TD 2022/D1, can be found here. Expected completion: To be advised |
PSI — meaning of personal services business | Draft Taxation Ruling TR 2021/D2 provides preliminary guidance on the meaning of personal services income (PSI) and what is a personal services business. The final Ruling will provide a consolidation of TR 2001/7 Income tax: the meaning of personal services income and TR 2001/8 Income tax: what is a personal services business. Expected completion: June 2022 |
Residency tests for individuals | This draft Taxation Ruling will provide the Commissioner’s proposed guidance to individuals to enable them to self-assess their residency status. Expected completion: August 2022 |
Use of an individual’s image | This draft Taxation Determination will set out the Commissioner’s proposed view on how s 6-5 of the ITAA 1997 applies to arrangements where an individual with fame establishes a connected entity and enters into an agreement with that entity granting it non-exclusive use of their name, image, likeness, identity, reputation and signature. This draft Determination will update the view previously expressed in draft Practical Compliance Guideline PCG 2017/D11, that was withdrawn on 24 August 2018. Expected completion: To be advised (See also Treasury Consultation paper released on 13 December 2018 in relation to the proposed legislative amendment on page 31) |
Useful ATO links
The following table sets out some useful links to ATO webpages which contain resources and useful information on the status of ATO guidance.
Resource | Details of useful AO links |
Advice under development program | The ATO develops public advice and guidance to assist taxpayers to understand their obligations and be aware of their rights and entitlements. Key matters on which the ATO is currently considering providing advice and guidance are grouped by topic. This content is updated regularly. |
Forms and instructions | A range of forms and instructions to assist with tax time. |
Key super rates and thresholds | Key super rates and thresholds sets out a range of useful rates and thresholds that apply to contributions and benefits, employment termination payments, superannuation guarantee and co-contributions. |
Matters under consultation | Key matters on which the ATO is currently consulting are grouped by segment of the market. This content is updated regularly. |
Media Centre | The ATO’s Media Centre contains media releases, speeches, articles, videos and other useful content. |
Occupation and industry specific guides | A range of guides for specific industries and occupations to help taxpayers to correctly report their income and allowances, and claim deductions for the work-related expenses they are entitled to. |
Small business newsroom | The Small business newsroom contains a suite of resources for small businesses to keep up to date with the latest news, keep track of key dates and access quick links to other resources. |
Tax professionals newsroom | The Tax professionals newsroom allows tax professionals to keep up to date with the latest news. |
Tax Time 2021 | A suite of resources including an overview of key changes, how to prepare for tax time and key tax time messages from the Tax Practitioners Stewardship Group. Downloadable PDF publications are available from the ATO Publication Ordering Service. |
Tax Time Toolkit | A suite of downloadable PDF publications is available here. |
JobMaker Hiring Credit program
The following table sets out key information relating to the JobMaker Hiring Credit program.
Details of enacted Act/Registered legislative instrument | Start date |
Economic Recovery Package (JobMaker Hiring Credit) Amendment Act 2020 Enacted on 13 November 2020 as Act No. 96 of 2020 Enables the Treasurer to make rules to provide for a Coronavirus economic response payment in relation to the JobMaker Hiring Credit scheme. | Operates from 7 October 2020 to 6 October 2022 |
CERP (Payments and Benefits) Amendment Rules (No. 9) 2020 Registered on 4 December 2020 as Legislative Instrument F2020L01534 Treasurer’s rules about JobMaker Hiring Credit | Operates from 7 October 2020 to 6 October 2022 |
Further guidance and information
Further guidance and information is available from the ATO website.
If you have any specific concerns that have not been outlined above, please email taxpolicy@taxinstitute.com.au.
Footnotes
1 Directors can apply for a director ID using their myGovID through the Australian Business Registry Services website.
2 Employers who choose to report under STP to the ATO do not also have to report the amounts to the Child Support Registrar.
3 On 6 October 2021, the ATO published guidance on its website setting out its approach to employers transitioning to STP Phase 2. It is mandatory from 1 January 2022 if your solution is ready. If your solution is ready and you could start Phase 2 reporting before 1 March 2022, you’ll be considered to be reporting on time and you won’t need to apply for more time. Deferrals are automatically available to clients of digital service providers who obtain deferrals. However, if you need more time to transition, you can apply for your own deferral.
4 The entity must receive the payment in the 2020–21 financial year and have an aggregated turnover of less than $50 million. The Minister must, by legislative instrument, declare payments under the relevant State or Territory program to be treated as NANE income, and the program must have been publicly announced on or after 13 September 2020.
5 For the payment to be NANE income, the entity must receive the payment in the 2020–21 financial year and have an aggregated turnover of less than $50 million. The Minister must, by legislative instrument, declare payments made under the relevant State or Territory program to be treated as NANE income, and the program must have been publicly announced on or after 13 September 2020.
6 The entity must receive the payment in the 2021–22 financial year and have an aggregated turnover of less than $50 million. The Minister must, by legislative instrument, declare payments made under the relevant Commonwealth program to be treated as NANE income.
7 The producer offset is currently 20% across all types of eligible films that are not feature films.
8 The three tax offsets providing tax incentives for film, television and other screen production in Australia are the producer offset, the location offset and the post, digital and visual effects tax (PDV) offset.
9 The loss carry back tax offset is limited by requiring that the amount carried back is not more than the tax paid on the earlier taxed profits and that the loss carry back does not generate a franking account deficit.
10 Schedule 4 to the Treasury Laws Amendment (2020 Measures No. 3) Act 2020 extended the $150,000 IAWO by six months to 31 December 2020 (see page 19).
11 Under the investment test, the entity must have a minimum total cost of more than $100 million of depreciating assets for the 2016–17 to 2018–19 income years (combined).
12 While these amendments commence prospectively, they apply for a fixed period in relation to the
2019–20 and 2020–21 income years for the backing business investment provisions, and also for a fixed period for the 2020–21 and 2021–22 income years for the TFE measure: para 1.41 of the Explanatory Memorandum to the Bill.
13 In response to the Federal Court’s decision in Commissioner of Taxation v Douglas [2020] FCAFC 220, the Government announced on 24 November 2021 that it seeks to ensure that certain kinds of benefits paid to veterans are taxed as superannuation lump sums rather than superannuation income stream benefits. The Government also intends to preserve the preferential outcomes for those veterans benefitting from the Court’s decision by creating a new non-refundable tax offset for veterans receiving benefits under the affected schemes.
14 A Private Member’s Bill is a Bill introduced into Parliament by a member of the House of Representatives or a senator who is not acting on behalf of the government. This Bill was introduced by Tasmanian Greens Senator Nick McKim.
15 Introduced into the Senate on 21 June 2021.
16 Introduced into the House of Representatives on 25 August 2021 and passed by the House on 18 October 2021. Introduced into the Senate on 19 October 2021.
17 This measure was previously contained in Schedule 2 to the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 that was introduced into Parliament on 30 March 2017. That Bill proposed to amend the income tax law to provide taxpayers with the choice to self-assess the effective life of certain intangible depreciating assets they start to hold on or after 1 July 2016, rather than using the statutory effective life currently specified in s 40-95(7) of the ITAA 1997.
On 5 December 2018, the Government’s amendment in the Senate to remove Schedule 2 from the Bill was agreed to by the Senate, and the Bill was enacted on 1 March 2019 without the measure affecting intangible assets proceeding.
18 The threshold for a small registered entity is proposed to be increased from less than $250,000 to less than $500,000; for a medium registered entity from $250,000 to less than $1 million to $500,000 to less than $3 million; and for a large registered entity from $1 million or more to $3 million or more.
19 Or the period substituted for the 2021–22 financial year for those entities with an approved substituted accounting period.
20 The proposed amendments apply to entities required to prepare a special purpose financial report disclosing the remuneration of key management personnel from the 2021–22 financial year (or the period substituted for the 2022–23 financial year for those entities with an approved substituted accounting period).
21 This measure was previously contained in Schedule 2 to the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 which was introduced into Parliament on 30 March 2017. That Bill proposed to amend the income tax law to provide taxpayers with the choice to self-assess the effective life of certain intangible depreciating assets they start to hold on or after 1 July 2016, rather than using the statutory effective life currently specified in s 40-95(7) of the ITAA 1997.
On 5 December 2018, the Government’s amendment in the Senate to remove Schedule 2 from the Bill was agreed to by the Senate, and the Bill was enacted on 1 March 2019 without the measure affecting intangible assets proceeding.
22 By way of background, an ancillary fund is a trust set up and maintained solely for the purpose of providing money, property or benefits to DGRs. Although an ancillary fund is also a DGR, it does not undertake charitable work. Instead, it acts as an intermediary between donors and DGRs that do undertake such work.
23 The start date was deferred from 1 July 2019 to 1 July 2020, then the Government announced on 30 June 2020 that the start date is revised from 1 July 2020 to the 
income years commencing on or after three months after the date the enabling legislation receives Royal Assent.
24 When the measure was announced, the Government expected this to have occurred before 1 July 2022.
25 These recommendations include:
- Ensuring that digital asset transactions only give rise to a CGT event where they genuinely result in a clearly definable capital gain or loss;
- Providing a 10% company tax discount to businesses undertaking digital asset ‘mining’ and related activities in Australia if they source their own renewable energy for these activities; and
- Establishing a ‘Global Markets Incentive’ to replace the Offshore Banking Unit (OBU) regime by the end of 2022. Such a regime may include a 15% tax on eligible activities that the Government wishes to incentivise. The OBU regime has been closed to new entrants from 14 September 2021, with concessional tax treatment removed from 2023–24.
26 The increased deduction for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year (that is, in the 2023 income tax return). The extra deduction for eligible expenditure incurred between 1 July 2022 and 30 June 2024 will be claimed in the income year in which the expenditure is incurred (that is, in the 2023 and/or the 2024 income tax return).
27 The increased deduction for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year (that is, in the 2023 income tax return). The extra deduction for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be claimed in the income year in which the expenditure is incurred (that is, in the 2023 income tax return).
28 The ATO’s total resourcing requirement, including for the delivery of the extension of the Tax Avoidance Taskforce, will be settled as part of the independent review of the ATO’s ongoing resourcing requirement announced as part of the MYEFO 2021–22 measure titled Australian Taxation Office – continuation of compliance programs and independent resourcing review.
As part of the MYEFO 2021–22 measure, the Government committed to provide funding of $111.0 million to continue the ATO’s personal income taxation and shadow economy compliance programs, and $0.6 million for an independent review of the ATO’s ongoing resourcing requirements. The programs are funded to 30 June 2023.
The amounts committed a part of the Federal Budget 2022–23 measure will be factored into the outcome of the commissioned report. At the date of publication, there is no information about the scope or outcomes of the independent review.
29 To date, trust income reporting and assessment calculation processes have not been automated to the same extent as individual or company tax returns. While tax agent lodgment systems have catered for trust tax returns, trustees have not been able to lodge tax returns themselves electronically. This has resulted in longer processing times and limited pre-filling opportunities.
30 For example, Commissioner of Taxation v Virgin Australia Regional Airlines Pty Ltd [2021] FCAFC 209.
31 Dual-agency refers to the joint administration of the R&DTI by the ATO and Industry Innovation and Science Australia (IISA) and the Department of Industry, Science, Energy and Resources (DISER), with the ATO being responsible for the administration and processing of R&D tax offset claims, and IISA responsible for registering companies’ R&D activities.
32 The Tax Institute made a submission in response to this consultation paper on 7 July 2020.
33 The Tax Institute made a submission in response to this consultation paper on 12 February 2021.
34 The Final Report was due to be delivered to the Government by 31 March 2022. On 29 March 2022, the committee’s reporting date was extended to 30 June 2022.