Question:
Reportable tax position: Dob yourself in
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
For 2011/12, large companies might be selected by the Tax Office to complete a Reportable Tax Position Schedule where they must disclose their most contestable and material tax circumstances with the lodgement of their tax return.In that year, the schedule will only be required where the Tax Office has given the company a notification.
Alternatively, the company could disclose the relevant information to the Tax Office in an Annual Compliance Arrangement, Advance Pricing Arrangement, a Private Ruling Application or a Reportable Tax Position Early Disclosure Form.
The Early Disclosure Form is another new initiative associated with the Reportable Tax Position Schedule. It allows the company to provide the same information on a particular tax circumstance before lodging their tax return.
The Tax Office has updated the information on its website about reportable tax positions including the definitions of key terms such as “Reportable Tax Position”, “Position” and “Material”; guidance related to administrative practices, transfer pricing, market valuations and the anti-avoidance provisions.A Reportable Tax Position could occur in three circumstances:
(a) The company has taken a material tax position that is as likely to be correct as incorrect;(
b) The company has taken a material tax position which must be disclosed in the company’s financial statements under the accounting standards AASB112 Income Taxes; and
(c) There is a particular reportable transaction that has taken place during the year.
A particular taxation position will be considered material if there is a potential tax adjustment equal to or greater than $30 million or 5% of the company’s tax expense.
The selected company must report a transaction or arrangement where capital proceeds exceed $200 million arising from a CGT event where the net capital gain is less than 50% of the profit recognised in the company accounts. There also requirements about capital losses.You can find more information by typing in “reportable tax position schedule” in the search box on the Tax Office website.
WTB 1577
