TAXATION NEWS
GST is the centrepiece of the Government Tax
Reform package.
Alienation of Personal Services Income Project 1999
The ATO says that utilising an iterposed entity is acceptable provided it is not used
to gain tax advantages not otherwise available. The ATO will not apply its guidelines on
personal services to a situation where the income in question is derived via a business
structure.
Work-Related Expense Schedules
The ATO will continue to focus on claims utilising these schedules but
recent stated there will be far fewer audits. I recommend that clients maintain vigilance
in their record-keeping.
Health Insurance Rebate
From 1 January 1999, a tax rebate of 30 % of contributions for hospital and ancillary
cover will be allowed either as a direct payment or as a reduction in health premiums.
Tax Savings Rebate (1999 Year only)
Are you self employed, a partner in a business or profession ? Do you have a rental
property which is generating profits?
From 1 July 1998 to 30 June 1999 you may be eligible for a tax rebate for :
•undeducted superannuation contributions and/or •net personal income from
savings and investments.
The rebate is set at 7.5 % for 1998/99 with an upper limit of $ 225
This may be relevant in varying PAYE tax instalments or 1999 Provisional Tax.
Employers
From 1 July 1998, Payers whose PAYE, PPS & RPS annual withholdings exceeds $ 25,000
will be classified as medium remitters and must pay by 7 th day of the end of each month.
Small remitters may pay quarterly or elect to pay monthly. Large remitters (more than $ 1
million) must remit electronically within 7 days!!
SUPERANNUATION GUARANTEE - CHANGES TO OBLIGATIONS
•From 1 July 1998, employers will be required to pay 7 % (was 6 %) superannuation on
wages paid (including on wages to Directors) to an appropriate superannuation fund.
•28 July is the deadline for guarantee compliance, but 30 June is the deadline for
tax deductions for most employers. •Employers who fail to make sufficient
contributions by this date will be required to pay the superannuation guarantee charge.
Compared to making actual contributions, the charge can cost employers almost double the
required contribution.
•From 1 July 1998 the opting out arrangements have changed.
Broadly, until 30 June 1998, 6 % of gross wages should have been paid to a complying Fund
for all employees earning $450 or more in any month. Employees under 18 employed on a
part-time basis, (that is less than 30 hours per week) or employees over 70 were excluded
from the SGC requirement to contribute.
From 1 July 1998, these "opting out" provisions will be amended to allow
employees earning $450-$900 per month the opportunity of receiving wages or salary in lieu
of the employer's Superannuation Guarantee contribution.
'Opting out" will apply to 'eligible employees' receiving monthly salaries of $450 to
$900. (For persons under the age of 18, the opting out threshold has been replaced by
$1,800 over a period of two months.)
Employees, by agreement with their employer, can opt out of SG arrangements on
commencement of employment or once annually thereafter. Employees will be able to opt back
into superannuation arrangements at any time.
Opting out will not override the effect of industrial awards. Employees will only be able
to opt out of SG arrangements to the extent that an employer's SG liability exceeds any
relevant award obligations.
An employer will not be able to force employees or groups of employees to opt out. Rather,
any decision to opt out must be initiated by the employee.
