Tax Measures
Federal Budget 2013/14

ATO targeting trusts (and everything else)
The ATO has received funding in a number of areas.  Among these is compliance activity in relation to taxpayers who have been involved in "egregious tax avoidance and evasion using trust structures."  This measure is expected to increase net tax revenue by over $217m over the forward estimate period.  The ATO is targeting exploitation of trusts to conceal income, mis-characterised transactions, artificially reduced trust income amounts and underpay tax.

Data matching to be expanded by the ATO
The Tax Office will benefit from $77.8m over four years, as the Government seeks to gain revenue of more than $620m over forward estimates. The intent is to improve compliance  by expanding data matching with third party information. Key features of the data matching effort will include new and strengthen existing systems for :

  • taxable Government grants and other government payments;
  • sales of real property, shares (including options and warrants), and units in managed funds;
  • sales through merchant debit and credit services;
  • managed investment trust and partnership distributions, company dividend and interest payments; and
  • transactions reported to the ATO by the Australian Transaction Reports and Analysis Centre.

All large entities subject to monthly PAYG instalments
The Government will extend the requirement to make monthly PAYG instalments to all large entities (turnover of $20 million or more) in the PAYG instalment system including trusts, superannuation funds, sole traders and large investors.

Other entities will be progressively brought in from the third tranche of the already announced move to monthly PAYG instalments for corporate entities:

Entities, other than head companies or provisional head companies, that have a turnover of less than $100 million and report GST on a quarterly or annual basis will not be required to pay PAYG instalments monthly.

In addition, entities in the taxation of financial arrangements (TOFA) regime will assess their entry to monthly instalments using a modified turnover test, based on their gross TOFA income, rather than their net TOFA income.

Disaster payments exempt from income tax
Disaster Income Recovery Subsidy (DIRS) payments provided between 3 January 2013 and 30 September 2013 will be exempt from income tax. The Government has also exempted ex-gratia payments to New Zealand non-protected Special Category Visa holders affected by natural disasters that occurred in 2012/2013.  

GST – Net refunds and GST installment system
In the 2011/2012 Budget, the Government announced that it would extend the GST installment system to allow access for small businesses that are in a net refund position.   This measure would have allowed small businesses in a net refund position to choose to access the GST installments system, with an instalment amount each quarter of zero. Any refunds or liability due to the taxpayer will be reconciled in their annual GST return.

The Government has now revised this position and will only allow those businesses already using the GST installment system to continue to use it if they move into a net refund position.  

CGT and native title benefits
The Budget confirms that there are no CGT implications resulting from the transfer of native title rights (or the right to a native title benefit) to an Indigenous holding entity or Indigenous person or from the creation of a trust that is an Indigenous holding entity over such rights. Capital gains and losses made from surrendering or cancelling such rights are also disregarded.

More from the Federal Budget 2013
Click through to the pages below for details about how the Budget affects you.

Federal Budget 2013 - A Swan song?
Families & Community
Key economic highlights

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Last updated May 2013. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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