The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 has now been passed and is now awaiting royal assent.
Business tax debt disclosure
The bill contains a number of measures, including one that will now allow the ATO to disclose tax debt information to credit reporting bureaus.
Businesses that have one or more tax debts of at least $100,000 and have been overdue by more than 90 days could now see their tax debt information disclosed.
Entities that do not effectively engage the ATO in respect of the tax debt will be up for disclosure.
Tax debts will include income tax debts, activity statement debts, superannuation debts, fringe benefits tax debts, and penalties and interest charges.
Small business CGT concessions
Another aspect of the bill relates to small business concessions on capital gains tax (CGT), particularly in relation to partners claiming offsets.
“Schedule 2 to the Bill amends the tax law to prevent the small business CGT concessions in Division 152 of the ITAA 1997 from being available for assignments of the income of a partner and other rights or interests in the income or capital of a partnership that are not a membership interest in the partnership,” the bill’s explanatory memorandum states.
It said that under established rules, small businesses could gain CGT concessions for any transaction that “involves an interest in or right to the income or capital of a partnership (or to an amount calculated by reference to distributions received by a partner) where the basic conditions are satisfied”.
This, as noted in the 2018–19 federal budget, meant that partners could reduce their CGT tax liabilities even where they did not hold a “membership interest” in the business.
The new law will restrict access to these concessions specifically to parties with a membership interest.
The change was flagged as part of the 2018–19 federal budget.
SG loophole closed
The bill also contains a measure that will close a loophole relating to employee superannuation by ensuring that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum SG contributions.
The new law will make it explicitly clear that employee salary sacrifices to superannuation cannot reduce an employer’s SG charge, and that SG is paid on the pre-salary sacrifice base.
It also specifies that an employee’s OTE base is comprised of their OTE and any amounts sacrificed into superannuation that would have been OTE, but for the salary sacrifice arrangement.