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Last updated 1 February 2024

[202329] Capital raised for the purpose of funding franked distributions

Registered

November 2023

Expected completion of consultation

February 2024

Consultation status

Consultation has commenced on a consultation paper to seek feedback from stakeholders. Comments close Friday 16 February 2024.

Consultation purpose

To seek feedback on public advice and guidance needs for the new integrity measure addressing franked distributions funded by capital raisings.

Description

A new integrity measure that prevents certain distributions funded by capital raising from being frankable was recently enacted through amendments contained in the Treasury Laws Amendment (2023 Measures No. 1) Act 2023.

 

The ATO is seeking feedback on whether there are priority issues where public advice and guidance is needed to help entities understand how the new law addressing franked distributions funded by capital raising applies to their circumstances.

 

Who we are consulting

  • Corporate tax entities and their members
  • Tax professional associations
  • Tax practitioners

 

Consultation lead

Virginia Gogan, Public Groups
Virginia.Gogan@ato.gov.au
Phone 03 8632 4643

[202323] Division 7A guidance within software

Registered

October 2023

Expected completion of consultation

March 2024

Consultation status

Feedback is being considered.

Consultation purpose

To seek insights from digital service providers to inform the design of Division 7A guidance within software products.

Description

Small business can use software to manage their business operations and tax and superannuation obligations.

Division 7A is contained in the Income Tax Assessment Act 1936 and is a complex area of the tax law. Statistically, Division 7A represents a significant part of the tax gap and is an out of tolerance risk.

 

The ATO has observed a general lack of awareness and understanding of Division 7A by small businesses and their registered tax agents which contributes to this risk.

 

Digital service providers build software that supports business in maintaining daily operations while meeting tax and superannuation obligations.

 

Guidance prompts and nudges could be embedded within software products at different touchpoints during a typical Division 7A lifecycle. These prompts would seek to raise awareness of potential Division 7A risks and issues as they arise. Guidance would help small businesses and their registered tax agents take corrective action.

 

Consultation with digital service providers will ensure Division 7A guidance within software products is viable and adds value for clients whilst also achieving ATO objectives.

 

Who we are consulting

  • Digital service providers
  • Financial technology providers
  • Tax professionals

 

Consultation lead

Michael Morton, Assistant Commissioner, Small Business
Michael.Morton@ato.gov.au
Phone 02 9374 2043

[202322] Sharing Economy Reporting Regime Phase 2

Registered

August 2023

Expected completion of consultation

August 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To seek feedback regarding implementation of the next phase (Tranche 2) of the Sharing Economy Reporting Regime including:

  • public advice and guidance
  • reporting requirements (data and lodgment).

 

Description

Schedule 2 of the Treasury Laws Amendment (2022 Measures No. 2) Act 2022External Link requires operators of electronic distribution platforms (EDPs) to report information to the ATO on transactions relating to supplies made through the platform. This measure implements a recommendation of the report of the Black Economy Taskforce.

 

Under the measure, EDP operators are required to report transactions that occur on or after:

  • 1 July 2023 if it relates to a supply of taxi services (including ride-sourcing) or short-term accommodation
  • 1 July 2024 for all other reportable transactions.

 

The first phase (Tranche 1) of consultation, [202230] Sharing Economy Reporting Regime, considered EDP reporting transactions related to a supply of taxi service (including ride-sourcing) or short term accommodation.

 

Consultation for Tranche 2 will include all other reportable transactions for all other industries.

Who we are consulting

  • EDPs operating across all other affected industries
  • Peak body representatives
  • Tax and other professional associations

 

Consultation lead

Vanessa Kelly, Small Business Experience
vanessa.kelly2@ato.gov.au
Phone 02 4223 2851

[202314] Right time tax payments and reporting

Registered

May 2023

Expected completion of consultation

June 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To understand the costs and benefits that ‘right time’ tax payments and reporting might have on small business.

Description

Understanding the costs and benefits of ‘right time’ (reducing the time between taxable events, their reporting and any payment) tax payments and reporting is part of Improve small business tax performance and participation by collaborating with partners to build a digital first tax ecosystem, enabling seamless tax reporting from business source systems – one of the key focus areas in the ATO corporate plan 2023–24.

 

The ATO is exploring the cost and benefits of ‘right time’ (more regular) GST or pay-as-you-go withholding (PAYGW) reporting and/or payments, through the following pilots:

  • small businesses using a digital service to pay more frequent GST payments to the ATO
  • small business changing their GST lodgment cycle from quarterly to monthly
  • small business changing their PAYGW lodgment cycle from quarterly to monthly and remaining on a quarterly GST lodgment cycle.

 

Who we are consulting

  • Small businesses that subscribe to digital services offering the option to remit more frequent payments of GST
  • Small businesses within the retail industry who are currently on a quarterly GST lodgment cycle
  • Small businesses who are currently registered for quarterly GST reporting, and monthly PAYGW reporting or quarterly PAYGW
  • Tax and BAS agents
  • Digital service providers
  • Financial technology providers
  • Tax professional associations
  • Small Business Stewardship Group
  • BAS Agent Association Group

 

Consultation lead

Michael Morton, Assistant Commissioner, Small Business
michael.morton@ato.gov.au
Phone 02 9374 2043

[202313] Preventing errors and mistakes through small business software

Registered

May 2023

Expected completion of consultation

June 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To explore opportunities to prevent errors and mistakes through software that small businesses use.

Description

Small business can use software to manage their business operations and tax obligations.

 

We are currently exploring how messaging and prompts may be able to be embedded into the software to assist tax professionals and small businesses to identify issues that may otherwise be overlooked or not properly understood and help them get their tax right prior to lodgment.

 

This will include:

  • identifying errors and mistakes
  • co-designing messages and prompts to reduce common errors and mistakes.

 

This is part of the Improve small business tax performance initiative. We are collaborating with partners to build a digital first tax ecosystem, enabling seamless tax reporting from business source systems – one of the key focus areas in the ATO corporate plan 2023–24.

Who we are consulting

  • Tax professional associations
  • Digital service providers
  • Financial technology providers
  • Tax and BAS agents

 

Consultation lead

Michael Morton, Assistant Commissioner, Small Business
michael.morton@ato.gov.au
Phone 02 9374 2043

[202307] Implementation of a global minimum tax and domestic minimum tax

Registered

March 2023

Expected completion of consultation

June 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To seek feedback on administrative, compliance and systems impacts with the Implementation of a global minimum tax and a domestic minimum tax measure.

Description

The Implementation of a global minimum tax and a domestic minimum tax measure was announced by the government in May 2023 in the Budget 2023–24This link will download a file. The government will implement key aspects of Pillar Two of the OECD/G20 Two-Pillar Solution to address the tax challenges arising from digitalisation of the economy:

  • a 15% global minimum tax for large multinational enterprises with the                    
    • Income Inclusion Rule applying to income years starting on or after 1 January 2024
    • Undertaxed Profits Rule applying to income years starting on or after 1 January 2025
  • a 15% global domestic minimum tax applying to income years starting on or after 1 January 2024.

 

Who we are consulting

  • Large corporations and multinationals
  • Professional services accounting firms
  • Digital service providers

 

Consultation lead

Adam Peel, International, Support and Programs
adam.peel@ato.gov.au
Phone 07 3213 5230

QC54486