News

Contractor payments data matching program

Contractor Payments - TradieBW

The ATO has advised that it is continuing its Contractor payments data-matching program.

It will acquire data from businesses that it visits as part of its employer obligations compliance program during the 2016/17, 2017/18 and 2018/19 financial years.

The data collected from businesses is used to identify contractors that may not be meeting their taxation obligations through:

  • not registering correctly with the ATO;
  • non-lodgment of returns;
  • failing to report payments received; and
  • not paying amounts of tax due to the ATO.

This is an ongoing data matching program and has been conducted for more than five years.

Impending blowout from the leaked ‘Panama Papers’

Editor:  Clients may have recently heard something about an unknown source who has leaked 11.5 million documents from the Panamanian law firm of Mossack Fonseca.

Basically, the documents illustrate how many wealthy individuals hide their money from tax authorities.

Under a plan devised by the Commissioner of Taxation, Chris Jordan, 35 countries have agreed to mount the most ambitious international investigation in history to hunt down tax evaders identified in the Panama Papers leak.

About 800 Australians are listed in the files of Panama law firm Mossack Fonseca, from which confidential correspondence was leaked, and 80 of those are identified in the Australian Crime Commission’s (ACC’s) database for serious and organised crime.

The ATO says that it has now linked over 120 of them to an associate offshore service provider located in Hong Kong.

Deputy Commissioner, Michael Cranston, said that “The information we have includes a large number of taxpayers who haven’t previously come forward, including high wealth individuals, and we are already taking action on those cases”.

The documents from Mossack Fonseca have been exposed in a global media project led by the International Consortium of Investigative Journalists (ICIJ).

The ICIJ plans to release the names of all of the 240,000 offshore entities set up by Mossack Fonseca, along with directors and shareholders, next month.

GIC and SIC rates for June quarter

The ATO has published the 2016 June quarter rates for the General Interest Charge (GIC) and the Shortfall Interest Charge (SIC):

GIC annual rate 9.28%
GIC daily rate 0.02535519%
SIC annual rate 5.28%
SIC daily rate 0.01442623%

ATO releases latest business benchmarks

The ATO says that the 2013/14 data is now available for the ‘Small business benchmarks’.

The ATO uses these benchmarks as a guide on industry trends to identify businesses that may be avoiding their tax obligations by not reporting some or all of their income.

The ATO says that using the Small business benchmarks can assist with building taxpayers’ businesses.

They say that taxpayers should compare their details against similar businesses in their industry and see how competitive they are or where improvements can be made.

Editor:  We can  help you find the benchmarks for your industry (if any).

ATO sounds warning to super funds with ‘collectables’

The ATO is warning trustees of SMSFs who hold investments in collectables* or personal-use assets*, acquired before 1 July 2011, that time is running out for those items to be transferred out of the fund under the old rules.

Editor (*):  Basically, collectables and personal use assets are things like artworks, jewellery, vehicles, boats and wine. Investments in such items must be made for genuine retirement purposes, not to provide any present-day benefit.

From 1 July 2011, investments in collectables and personal-use assets must have a qualified independent valuation if they are transferred to a related party.

However, items acquired before 1 July 2011 can be transferred to a related party, without a qualified independent valuation, provided the transfer takes place before 1 July 2016, and the transaction is made on an arm’s length basis.

Editor:  Again, if any client wishes to take advantage of this window, they should contact us very soon.