Not-for-profit sector reform

The later start date of 1 July 2014 for the changes relating to unrelated commercial activities that were commenced after 10 May 2011 will allow for further consultation with the sector.  In the case of such activities that commenced before 11 May 2011, the transitional arrangements will cease from 1 July 2015.

Statutory definition of charity

Implementation of this measure has also been deferred, with a later start date of 1 January 2014 (rather than 1 July 2013) to provide further time for the Australian Charities and Not-for-profits Commission to develop the applicable guidelines.

Australian Taxation Office (Office) Trust Taskforce

Additional funding of $67m over four years will be provided to the ATO to undertake compliance activity in relation to taxpayers involved in “egregious” tax avoidance and evasion using trust structures, with the expectation of increasing tax revenues by $379m.

Activities which have the effect of concealing income, mischaracterising transactions and artificially reducing trust income will be targeted.

The ATO will undertake additional compliance activity to target known tax scheme designers, promoters, individuals and businesses who participate in such arrangements.

Expanding data matching with third party information

The government will provide $77.8m over four years to the ATO to improve compliance by expanding data matching with third party information.

The measure will establish new and strengthen existing reporting systems for:

  • taxable government grants and specified other government payments
  • sales of real property, shares (including options and warrants), and units in managed funds
  • sales through merchant debit and credit services
  • managed investment trust and partnership distributions, company dividend and interest payments, and
  • transactions reported to the Tax Office by the Australian Transaction Reports and Analysis Centre

Tax Reform Road Map

A document titled Tax Reform Road Map – A Stronger, Smarter and Fairer Tax System was released on Budget night.  The document intends to provide an outline of the Governments plans for reform of the tax system.  However, most of the changes contained within the document have already been announced, including via the Australia’s Future Tax System (AFTS) report released some 3 years ago.

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