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Top Tax Tips – 22 February

Real estate agents: Beware of breaching Foreign Investment Review Board rules

Generally, foreign investors need permission from the Foreign Investment Review Board (FIRB) before purchasing residential properties (excluding some new dwellings) or agricultural land in Australia.  By using data matching, the ATO can easily determine whether a foreigner owns property in Australia as well as whether the foreigner has obtained FIRB approval.

Although a wide variety of criminal or civil penalties (e.g. divestment orders or infringement notices) may apply to foreign investors who breach these rules, real estate agents who knowingly assist foreign investors to act in contravention of these FIRB rules may also be subject to civil and criminal penalties.
Real estate agents should therefore ensure that they do not sell Australian properties to foreign investors without first determining whether the foreign investor has obtained FIRB approval prior to buying the property.

Uber drivers need to be registered for GST

A recent Federal Court case confirmed that Uber drivers are carrying on a business of supplying taxi travel because an Uber is transporting passengers by taxi for a fare – even though there is no taximeter installed in an Uber.  This decision means that Uber drivers must declare the income they earn and that tax deductions will be allowed to the extent that expenses have been incurred to derive that income.

Therefore, all Uber drivers will need to obtain an ABN and all drivers – even those with gross annual income of less than $75,000 – will have to register for GST and have to charge GST on the taxi services they provide.

FBT & family assistance changes from 1 January 2017

From 1 January 2017, the entire grossed-up value of fringe benefits that is reported on an employee’s PAYG payment summary will be used to calculate an employee’s adjusted taxable income for purposes of determining an individual’s eligibility for family assistance payments.

These changes will not apply to employees of certain NFP institutions who are eligible for FBT exemptions (e.g. registered health promotion charities, registered public benevolent institutions, some hospitals and public ambulance services) because their reportable fringe benefits will still continue to be adjusted downwards.

Note that from 1 July 2017, these changes in calculation of the adjusted taxable income will also apply for the purposes of determining an individual’s eligibility for the net medical expenses offset, dependant tax offsets and seniors and pensioners tax offset.

ATO spotlight on certain not-for-profit (NFP) activities

The ATO is concerned that some NFP entities dishonestly claim tax concessions or refunds to which they are not entitled.

In particular, NFP entities that do not lodge their returns on time or incorrectly claim FBT rebates and exemptions may be subject to ATO investigations.  Also, NFP entities that do not apply their income and assets solely for a charitable purpose may lose their tax exempt status.

Although your NFP may not have been involved in any of such activities, we are obliged to alert you about the increase in ATO scrutiny on NFP activities.  We can assist you to review your organisation’s status as a NFP as well as the information you provide in tax returns and activity statements – and if you have made a mistake – assist you in making a voluntary disclosure.

Bill in Parliament: GST on low value goods from 1 July 2017

Currently an Australian tax resident purchasing goods costing $1,000 or less (i.e. low-value goods) from overseas (e.g. through an online transaction), would not have to pay GST on such a transaction.  However, there is currently a Bill before Parliament that proposes to charge GST on such a sale from 1 July 2017 – which will mean that purchases of such low-value goods from overseas will potentially cost 10% more than what is currently the case.

The GST impost on low value goods is proposed to only apply to supplies made to Australian consumers (e.g. purchasers not registered for GST or GST registered purchasers that acquired such low value goods solely for private purposes) – importations by Australian businesses will not be subject to the proposed GST impost.

How can Nexia Edwards Marshall NT help you?

For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall Advisor.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall NT. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall NT Advisor.

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