As a result, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No.1) Bill was introduced into Parliament on July 24.
To keep you informed, here is a summary of the tax exploiting activities the Bill tackles, by applicable implementation dates.
As of 7.30pm on May 8, 2018:
• Any tax-exempt entities (e.g., government-owned) that are issued a loan on concessional terms and subsequently become privatised will be denied tax deductions based on the concessional terms of the loan.
• Partners in partnerships cannot access small business capital gains tax concessions when they alienate future incomes from the partnership.
As of July 1, 2019:
• An anti-avoidance rule that applies to other closely held trusts that engage in circular trust distributions will extend to family trusts. This will enable the ATO to pursue family trusts that engage in this arrangement.
• Certain taxpayers will be denied a deduction for expenses associated with holding vacant land. Exceptions include expenses associated with vacant land being used for business, e.g., property development, corporate tax entities, managed investment trusts, and unit trusts.
In addition to the above, the Bill also introduces the following:
Increased ATO tax debt discretion
To reduce the unfair advantage gained by businesses who do not pay their tax debts, the ATO has been given the discretion to disclose the tax debt information of businesses not engaging with them to manage their debts to credit reporting bureaus.
This information can only be disclosed when certain conditions and safeguards are met, e.g., at least $100,000 of debt is overdue for more than 90 days.
It is also hoped this will encourage businesses to engage with the ATO to manage their tax debts.
New legislative power to implement e-invoicing
To help businesses save time and money, the Bill also provides legislative powers and functions to the ATO that allow it to implement an electronic invoicing (e-invoicing) framework in Australia.
Deloitte Access Economics estimates that this could result in economy-wide benefits of up to $28 billion over ten years.
Superannuation loopholes closures
Finally, the Bill contains an important measure to protect workers by closing loopholes that have been used by employers to short-change employees who make salary sacrificed contributions to their super.
The introduction of these new measures demonstrates the Government’s commitment to its tax integrity promise.
To stay informed on the latest legislative changes and other industry news and insights, take a look at the other resources on our blog.