Final tranche of tax bills enacted in 2022

14 Dec, 2022

The final Parliamentary sitting for 2022 has now concluded. Below is a roundup of the tax-related legislation that was passed by both Houses during this sitting and has since received Royal Assent. The newly enacted laws include a FBT exemption for electric vehicles, an extension of downsizer contributions eligibility to 55 year olds, an extension of the Taxable Payments Reporting System to more sharing economy platforms and the opportunity to complete a record-keeping course instead of paying fines.

Treasury Laws Amendment (Electric Car Discount) Bill 2022

Received Royal Assent on 12 December 2022.

An FBT exemption is available for cars that are eligible zero or low emissions vehicles that are both first held and used on or after 1 July 2022.

Zero or low emission vehicles are battery electric vehicles, hydrogen fuel cell electric vehicles and plug-in hybrid electric vehicles.

An electric car that was ordered prior to 1 July 2022, but not delivered until after 1  July  2022 would be eligible for the exemption (even if an employer acquired legal title to the car before 1 July 2022).

The value of the car at the first retail sale must be below the luxury car tax threshold for fuel efficient vehicles ($84,916 for 2022–23).

Exempt car fringe benefits will be included in the employee’s reportable fringe benefits amount.

Treasury Laws Amendment (2022 Measures No. 2) Bill 2022

Received Royal Assent on 12 December 2022.

Expanding eligibility for downsizer contributions

From the first day of the first quarter after the day of Royal Assent, eligibility for the downsizer contributions will be extended to individuals aged 55 and above (currently 60 and above).

Approved record-keeping course as alternative to fines

The TAA is amended to empower the Commissioner to direct an entity to complete an approved record-keeping course as an alternative to financial penalties where the Commissioner reasonably believes the entity has failed to comply with its record-keeping obligations.

The Commissioner will be able to issue a tax-related education direction (TRE direction) from three months after the day of Royal Assent.

Only an individual can complete a course of education. The Explanatory Memorandum states that it is expected that the Commissioner will principally exercise the TRE direction power in the context of entities carrying on a business, and in particular small business entities.

A TRE direction cannot be issued in relation to record-keeping obligations for work expenses, car expenses, travel expenses, FBT and superannuation guarantee.

Extension of sharing economy reporting regime

The Taxable Payments Reporting System will be extended to require electronic platform operators to report to the ATO:

  • ride-sourcing and short-term accommodation services — from 1 July 2023
  • all other reportable transactions — from 1 July 2024.

Platform operators will be required to report transactions if they involve a buyer providing consideration (within the meaning of the GST Act) to a seller for a supply made through the platform by the seller, where the supply is connected with the indirect tax zone (i.e. generally Australia).

Self-education expenses

Section 83A of the ITAA 1936 is repealed to remove the $250 non-deductible threshold for work-related self-education expenses from 2022–23 (1 April 2023 for FBT). There will no longer be a requirement to keep records of non-deductible self-education expenses.

Increased Tribunal powers for small business tax decisions

Small business entities will be able to apply to the Small Business Taxation Division of the Tribunal for an order staying, or otherwise affecting, the operation or implementation of decisions of the Commissioner that are being reviewed by the Tribunal, from the day after Royal Assent.

The Tribunal will be empowered to prevent the Commissioner from exercising powers to give effect to the decision, such as debt recovery and revenue protection powers, only until the Tribunal concludes its review of (and amends or remakes if necessary) the objection decision.

Treasury Laws Amendment (2022 Measures No. 3) Bill 2022

Received Royal Assent on 5 December 2022.

Note: The Bill was passed with amendments in the Senate to remove the proposed framework for a supplementary annual performance test for faith-based superannuation products. This will enable the Government to consider the treatment of faith-based superannuation products as part of the broader review of the Your Future, Your Super reforms.

Data sharing to support government responses to major disasters

The TAA provides that it is an offence for a taxation officer to disclose or record information that is ‘protected information’. The law is amended to allow protected information to be disclosed to government agencies for the purpose of administering major disaster support programs approved by the Minister, from the date of Royal Assent.

A new provision allows the Minister to, by legislative instrument, declare a program to be a major disaster support program.

Tax treatment for new or revised visa programs

The tax rate on certain income earned by foreign resident workers participating in the Pacific Australia Labour Mobility scheme is reduced from marginal rates starting at 32.5 per cent to a flat 15 per cent, for payments made from 1 July 2022.

Treasury Laws Amendment (Australia-India Economic Cooperation and Trade Agreement Implementation) Bill 2022

Received Royal Assent on 22 November 2022.

The International Tax Agreements Act 1953 is amended to give legislative authority to the Australia-India Economic Cooperation and Trade Agreement to exclude from tax within Australia payments and credits made to Indian residents by Australian customers (not through a permanent establishment) for technical services provided remotely that are covered by the Agreement, for income years starting on or after the day the Agreement enters into force.

Crimes Amendment (Penalty Unit) Bill 2022

Received Royal Assent on 12 December 2022.

The Crimes Act 1914 is amended to increase the amount of the Commonwealth penalty unit from $222 to $275, with effect from 1 January 2023.

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The House of Representatives and the Senate will next sit from 6 to 9 February 2023. The House of Representatives will also sit the following week, from 13 to 16 February 2023.

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