When are digital products ‘connected with Australia’ for GST purposes?
With the purchase of digital products such as the streaming or downloading of movies, apps, and e-books and so on becoming exponentially more popular, it is timely to examine the recently-introduced law that applies GST to digital products and services imported by Australian consumers.
Effective 1 July 2017, GST now applies to digital products and other services imported by Australian consumers. Affected supplies that are caught by the new law include not only the streaming or downloading of movies, music, apps, games, e-books, online supplies of software, digital trade journal/magazine subscriptions and other digital products, but also offshore services such as website design, publishing services, consultancy and professional services (such as legal advice, architectural services and so on). […]
The Treasurer Josh Frydenberg’s first budget has lots of goodies with few “baddies”. This was to be expected with the next federal election only weeks away and the Coalition Government trying to make up ground in the polls.
The Treasurer’s “wow” factor was a return to a budget surplus of $7.1 billion for the 2019-20 fiscal year.
Without increasing taxes, the Coalition Government, if re-elected, promises to deliver on a mix of benefits for a majority of taxpayers in Australia. These include:
Personal income tax cuts through adjusting upwards the thresholds at which the current tax rates apply (from 1 July 2022 to 30 June 2024) and then, finally, in the income year ending 30 June 2025, having only three rates of tax, with the highest marginal rate (45%) commencing at $200,000.
Increasing the Low and middle income tax offset to a maximum offset of $1,080 for the years ending 30 June 2019, 2020, 2021 and 2022.
Increasing the instant asset write-off threshold from $25,000 to $30,000 and extending this so that businesses with a turnover of between $50 million and $10 million can also access the concession. This will apply from Budget night until 30 June 2020.
Apart from the above, the budget was quite “light” on tax and superannuation changes. The government, no doubt, is trying to make itself a small target in relation to the coming election.
Also note that proposed changes to Division 7A will be deferred from 1 July 2019 to 1 July 2020, and that there are some useful changes to superannuation that will benefit older pre-retirees.
Remember that a fuel tax credit increase has just gone through
Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). Also these rates change regularly, so it’s important to check when you are preparing for us to complete an activity statement for you.
See this ATO webpage for the rates that apply from 4 February to 30 June 2019. (Past rates are also displayed there, just scroll down.)
If you claim less than $10,000 in fuel tax credits each year, you can use any of the following simplified methods that best suits your needs. […]
From 1 July this year employers with 20 or more employees will report to the ATO in real time from their payroll software. The changeover to Single touch payroll (STP) is a gradual change, and some employers may start reporting later.
Employers will be able to see STP information they report through the ATO’s business portal, and this is expected to give them a better picture of their tax position. The ATO will be able to offer help and support earlier to those businesses that may be struggling to meet their tax obligations, such as offering payment plans. […]
SG on leave loading? Yes, and no — so it pays to check
An issue has surfaced in recent times that in some cases may require a change in the approach taken by some employers with regard to them being fully compliant with superannuation guarantee obligations. The problem for some may not be so much ducking the rules, but rather being in sore need of clarification on how the existing rules apply.
The accepted convention with regard to superannuation guarantee payments is that it is an amount calculated as a percentage of an employee’s salary or wages (9.5% at this stage, but increasing over coming years). […]
One of the major concerns for taxpayers in taking on the role of a legal personal representative is that the Tax Commissioner may treat legal personal representatives (LPRs) as having a personal liability for a tax debt where assets of a deceased estate have been distributed and there is still outstanding amounts owed to the ATO.
In a recently released practical compliance guideline (PCG 2018/4), the ATO spells out when an LPR of smaller and less complex estates can be personally liable for tax debts. The PCG also provides a safe harbour arrangement to ensure the Tax Commissioner does not seek to recover the deceased’s outstanding tax liabilities from the LPR’s own assets. (Note however that there are some limitations on the PCG’s application, see below). […]
The legislation Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018 has just recently passed both houses in Canberra, which among other measures also makes changes to the long-established small business CGT concessions.
The legislation’s explanatory memorandum (scroll down to page 13 of this PDF of the EM) spells out the incumbent basic conditions for the concessions to apply, but adds additional conditions that apply only where the CGT assets concerned are shares in a company or interests in a trust. (See schedule 2.6 of the EM, page 14.)
“We finally have some long-feared changes to the small business CGT concessions,” says tax policy specialist Ken Mansell, but adds that it is limited to certain assets only. “If it is not a share or a unit, there are no changes.” […]
The shake up that’s coming to Division 7A
Discussion about reforms to Division 7A has been bouncing back and forth between Treasury and the ATO for many years — since the end of 2012 in fact, giving the impression they may have been stonewalling any moves on Division 7A. But a definite crack appeared in that wall with the May 2016 Federal Budget. It was announced that “targeted amendments” were planned for two years hence from that date — in other words, 1 July 2018.
Well, as we know this time has come and gone. But just prior to that deadline (in May 2018, that is, the last budget), the timing of Div 7A reforms was pushed out once again, this time to July 2019.
But now, a paper has been released which spells out the intended Div 7A reforms, noting that the start date of 1 July 2019 remains unchanged. […]