Question:
Government imposes retrospective Director Penalties
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Breaching the convention not to process retrospective legislation changes that are damaging to tax payers, the Government has legislation before parliament (not previously announced) to change the date of issue of Director Penalty Notice for some 17,000 director penalty notices which were issued between December 2007 and June 2010.
This follows a decision in February of the Full Bench of the NSW Court of Appeal in Soong to overturn an earlier decision in December 2007 of the Full Bench of that same Court.
The earlier Full Bench decision was that Director Penalty notices were issued on the date the Tax Office put them in the post. That position was overturned in February where the Court said that the penalty notice was “given” to the director when it was delivered rather than when it is put into the post. The Tax Office sought especially to appeal the Soong matter at the High Court but was refused leave.Accordingly, around 17,000 Director Penalty notices are potentially invalid and now the Government is seeking change to the statute retrospectively to fix up the mess.
Deputy Commissioner of Taxation the Meredith [2007] NSWCA354, Soong vs. Deputy of Commissioner of Taxation [2011] NSWCA26, former s 222AOE of the 36 Tax Act, WTB 1528
