One of the important things we do at The Tax Institute is to advocate for our members and the entire tax profession, by working with lawmakers, the Federal Treasury and the ATO. With the Australian government putting measures in place to address the economic fallout of COVID-19, this has never been more important.
The Tax Institute has recently joined forces with other bodies which represent the tax profession, including Chartered Accountants Australia and New Zealand, Corporate Tax Association, CPA Australia, Institute of Public Accountants, and the Law Council of Australia, to submit several letters to the National COVID-19 Co-ordination Commissioner, the Federal Treasurer, the ATO and all the State and Territory Treasurers regarding the huge number of COVID-19 economic measures.
Here’s what we’re asking on your behalf:
Recognition of tax professional as an essential service
In its first submission on 2 April 2020, the Joint Bodies made the argument that accountants, tax practitioners and professional advisers are critical to maintaining and supporting business and individuals through the COVID-19 crisis. In light of this, we respectfully requested that these professionals should be considered an ‘essential service’ for the purposes of COVID-19 measures.
Read the submission: Tax Profession an ‘essential service’
Lodgement deferrals and penalty waivers
On 2 April 2020, the Joint Bodies requested that the Commissioner consider three deferrals and penalty waivers regarding tax obligations during COVID-19:
- deferrals for company, individual, trust and partnership 2019 income tax returns to 15 June 2020 and SMSF returns to 30 June 2020, without the need for a specific application
- a 90-day waiver for all lodgement penalties
- no negative impacts for those who do not meet the ‘85% on-time lodgement requirement’ for the lodgement program framework during the COVID-19 period
Read the submission: Request for deferrals and penalty waivers in response to COVID-19 Crisis
Concerns with the Instant Asset Write-off and cash flow boost
There has been plenty of confusion around the Instant Asset Write-off and especially the cash flow boost measures released in order to help Australian employers get through the economic upheaval of COVID-19.
On 3 April 2020, the Joint Bodies made a submission outlining concerns about the measure from the tax profession. These included:
- Questions around whether the Instant Asset Write-off works as intended for taxpayers with Substituted Accounting Periods
- Extension of the Start to use or installed ready for use date in regard to the Instant Asset Write-off
- Accommodations for businesses that have started up in December 2019 or January 2020, and so may not be eligible for the Cash Flow Boost
Read the submission: Economic Recovery Package
Concerns with JobKeeper payments
The Federal Government’s third stimulus package included JobKeeper payments available to eligible employers. In a submission made on 3 April 2020, the Joint Bodies made a submission outlining 5 considerations that would need to be addressed in the JobKeeper legislation:
- Suggestions around the definition of turnover and basis for grouping
- A “same job, different employer” test to address mergers and acquisitions issues
- An adjustment to account for business disposals
- A sole trader extension to partnerships with active partners and potentially trusts and companies
- A fair system to address unintentionally inaccurate estimations of turnover decline,
Read the submission: JobKeeper Stimulus Package
Endorsement of STEP Australia submission
On 2 April 2020 STEP Australia made a submission to make a minor amendment to the Taxation Administration Act 1953 (Cth). The submission proposed a minor amendment to the existing legislation, to include a registered tax agent, BAS agent or legal practitioner appointed by the LPR of a deceased estate where the primary entity was a deceased individual. This would overcome the issue of tax agents appointed by an LPR not currently being able to access tax information of the deceased estate.
On 3 April 2020, the Joint Bodies threw their support behind the amendment being made in the current circumstances in the form of a legislative amendment rather than a legislative instrument.
Tax Policy Measures the Treasurer should address
On 7 April 2020, the joint bodies requested the Treasurer urgently address a number of tax policy measures affected by COVID-19, including:
- Division 7A, Income Tax Assessment Act 1936 (Cth);
- Non-resident CGT Main Residence exemption;
- Superannuation Guarantee Amnesty;
- Superannuation Guarantee Charge;
- Division 129 GST Act;
- Fringe Benefits Tax; and
- R&D Bill currently before Parliament
Read the full submission: Urgent Tax Policy Measures affected by COVID-19 Crisis
Other matters Commissioner should address in response to COVID-19 Crisis
In a further submission on 7 April 2020, the Joint Bodies requested that the Commissioner address further issues relating to COVID-19 and suggested some responses. These issues included:
- A 90-day deferral of all non-critical requests for information
- Discretion on the Commissioner’s behalf regarding Division 7A loans and minimum repayments
Read the full submission: Other matters to be addressed in response to COVID-19 crisis
Payroll Tax exemptions for the JobKeeper Subsidy
In a submission on 7 April 2020, the Joint Bodies requested that the JobKeeper subsidy be exempt from State and Territory payroll tax. While some States have already announced other payroll tax relief measures, the submission asks that exempt treatment for the JobKeeper subsidy be uniform nationally.
Read the full submission: State Treasurers Payroll tax
Visit our COVID-19 support and resources page for more information.