As we approach the time to look at 2018 returns it is worthwhile looking at the Commissioner of Taxation’s Annual Report which was released by the Australian Taxation Office (ATO) for the previous year.
A few key themes were evident in the report including the refinement of deductions being claimed, ongoing targeting of privately owned and wealthy groups, as well as highlighting the continued focus on the black economy.
In the 2016-17 financial year, the ATO undertook an impressive 762,000 compliance activities, including tailored letters, pre-issue reviews, audits, working with large employers, and personal visits to tax agents. These activities alone resulted in additional tax liabilities of $893.8 million being raised and also helped in refining the strategies to increase the number of compliance activities the ATO would undertake in 2017-18:
- The value of all audit related compliance liabilities raised increased to $15.6 billion, up $1.8 billion from the previous financial year.
- The Black Economy Taskforce facilitated contact with in excess of 11,000 businesses, raising more than $190 million.
- Privately owned and wealthy groups remained on the hit list, with $3.3 billion raised by the ATO in liabilities.
- More than 640 million records were received for review and cross checking through the extensive data-matching program.
Setting our vision to further down the track, we suspect that a key area of interest for the next report would be cryptocurrency.
The ATO has established a taskforce (yes, another one) to clarify and enforce tax treatment for transactions associated with cryptocurrencies, specifically bitcoin. The ATO considers cryptocurrency transactions such as bitcoin akin to bartering, which is dissimilar to many overseas revenue agencies that consider it as a form of foreign currency. Bitcoin is, however, an asset for capital gains tax (CGT) purposes. The waters are still murky, yet I am sure there is more to come on this front. Despite the media whirlwind that has been cryptocurrency, the ATO has still kept a finger on the pulse in relation to other areas of interest.
In addition, Single Touch Payroll comes into effect as of 1st July 2018 for employers with 20 or more employees. Similarly, employers with under 20 employees will be affected by 1st July 2019. It appears to be a hive of activity at the ATO, with no signs of slowing down.
General Advice Warning Information provided in this newsletter is general in nature only and does not constitute personal advice. The information has been prepared without taking into account your personal objectives or needs. Before acting on any information in this newsletter you should consider the appropriateness of the information having regard to your objectives and needs.