Birchstone Brief for the week ended 29 October 2021

ATO Update

ATO Guidance: Superannuation guarantee shortfalls

The ATO released the following guidance on the relevant factors it will consider when deciding whether or not to reduce an employer’s superannuation guarantee shortfall:

  • SPR 2021/1 – Choice of Fund – Written Guidelines for the Reduction of an Increase in an Employer’s Individual Superannuation Guarantee Shortfall Determination 2021;
  • SPR 2021/2 – Stapled Fund – Guidelines for the Reduction of an Employer’s Individual Superannuation Guarantee Shortfall for Late Contributions Due to Non-Acceptance by Notified Stapled Fund Determination 2021.

Cases

Addy v FCT [2021] HCA 34 – Backpacker tax

The High Court of Australia has ruled in favour of the taxpayer and overturned a decision of the Full Federal Court in FCT v Addy [2020] FCAFC 135. In that case, it was held that the taxpayer had to pay the ‘backpacker tax’ and could not utilise the tax-free threshold (which currently sits at $18,200). The High Court overturned the decision of the Full Federal Court on the basis that the application of the backpacker tax was contrary to Australia’s obligations under the non-discrimination clause in the DTA between Australia and the UK.

More to come on this case in the Birchstone Brief next week.

Angel Loop Ltd v Commissioner of Australian Charities and Not-for-profits Commission (Taxation) [2021] AATA 3894 – Charity registration

The AAT has affirmed a decision of the Commissioner of the ACNC to deny a not-for-profit company registration as a charity.

The taxpayer was a not-for-profit company established to facilitate business and entrepreneurial relationships in regional Australia. The taxpayer’s role was to connect investors with inventors, to facilitate more commercial projects being realised. The taxpayer sought registration as a charity but the Commissioner refused on the basis that the taxpayer’s purposes were not all charitable as required by the Charities Act 2013 (Cth).

The AAT affirmed the Commissioner’s to decision to deny the taxpayer registration as a charity because not all of its purposes were charitable purposes. The AAT reasoned that the taxpayer’s function of facilitating relationships between inventors and investors was not charitable (even it was a worthy one) and was not ancillary to any charitable purpose that it did have.

Legislation

New Bill: Various superannuation changes

A new Bill has been introduced into Parliament to, amongst other things, make the following changes:

  • remove the $450 per month threshold for superannuation guarantee eligibility;
  • increasing the maximum releasable amount for the First Home Super Saver Scheme to $50,000; and
  • reduces the eligibility age for downsizer contributions from 65 to 60 years.

Exposure Draft Regulations Released

The Treasury has released exposure draft regulations which detail the income tax exemptions for salaries and emoluments received by Australians working on temporary missions for the International Monetary Fund and the World Bank Group.

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