18 November 2004

Government Introduces Five Tax Bills

The Government today introduced five tax bills into the Parliament, with key features focusing on easing compliance costs for small businesses.

The legislative program, introduced by the Minister for Revenue and Assistant Treasurer, Mal Brough, includes measures outlined in the 2004-05 Budget and the Prime Minister's July 2004 statement, Committed to Small Business.

The program includes:

The Tax Laws Amendment (Small Business Measures) Bill 2004
The Tax Laws Amendment (Superannuation Reporting) Bill 2004
The Tax Laws Amendment (Retirement Villages) Bill 2004
The New International Tax Arrangements (Managed Funds and Other Measures) Bill 2004
The Tax Laws Amendment (2004 Measures No. 6) Bill 2004

Most of the measures were previously introduced in bills which lapsed when the election was called. The retirement villages bill fulfils the Government's pre-election commitment to introduce these measures as a matter of priority.

The Tax Laws Amendment (Small Business Measures) Bill 2004 will ease compliance costs for small business through changes to GST payments, reporting and apportionment rules.

"GST compliance costs for small businesses and non-profit bodies will be reduced by allowing voluntarily registered GST entities the option of reporting and paying GST on an annual basis; by allowing entities, with annual turnovers of $2 million or less, to undertake annual apportionment of input tax credits for partly creditable acquisitions; and by simplifying the current GST instalment election rules," Mr Brough said.

The Tax Laws Amendment (Superannuation Reporting) Bill 2004 will remove the requirement for employers to report superannuation contributions made to employees under the Superannuation Guarantee (Administration) Act 1992.

"This measure, which will take effect on 1 January 2005, will assist all employers, particularly small businesses employing casual and itinerant workers. Employees will continue to receive information on their superannuation contributions from their superannuation funds and many employees will continue to receive information more regularly on pay slips."

The Tax Laws Amendment (Retirement Villages) Bill 2004 will remove any public uncertainty surrounding a potential ATO ruling that may have the effect of changing the GST treatment for residents of serviced apartments in retirement villages.

"It has always been the Government's intention that GST-free treatment apply where residents of serviced apartments in retirement villages require daily living or nursing assistance. This will protect the Government's policy intent and provide for certainty for industry and aged residents."

These amendments to the GST law will ensure that certain supplies of services and accommodation to residents of serviced apartments in retirement villages are GST free if the resident requires daily assistance or nursing services; and confirms that supplies of accommodation, related services and meals by a charitable operator of a retirement village to a resident of that retirement village are GST-free.

The New International Tax Arrangements (Managed Funds and Other Measures) Bill 2004 will implement reforms arising from the review of international tax arrangements, particularly in respect of the managed funds industry.

The Tax Laws Amendment (2004 Measures No. 6) Bill 2004 will:

  • clarify certain aspects of the consolidation regime;
  • amend the tax treatment of copyright collecting societies;
  • make some consequential and technical amendments to the simplified imputation system;
  • update the list of specifically listed deductible gift recipients and also adds a new category of deductible gift recipients for government special schools;
  • extend the transitional period to 30 June 2005 for at-call loans under the debt/equity rules;
  • amend the water facilities and landcare tax concession provisions to give irrigators and rural land providers access to these concessions;
  • amend the provisions for accessing the fringe benefits tax exemption for incidental purchase costs associated with the acquisition of a dwelling as a result of relocation;
  • provide that an administrator (in addition to a liquidator) of a company can declare shares and financial instruments in the company to be worthless for capital gains tax purposes;
  • remove an anomaly that allows supplies of certain services made to owners of residential property to be GST-free if the owner is not in Australia at the time of the supply;
  • extend the first child tax offset provisions affecting adoptions;
  • make a technical correction to the Taxation Laws Amendment Act (No. 8) 2003; and
  • alleviate unintended tax consequences that arise when a life insurance company transfers some or all of its life insurance business to another life insurance company under Part 9 of the Life Insurance Act 1995 or under the Financial Sector (Transfers of Business) Act 199