2023 TAX UPDATES

Working from home deduction from 1 July 2022

A Practical Compliance Guideline has been released for taxpayers who continue to work from home after 1 July 2022. Under the guideline, an individual working from home may make a simplified claim for running expenses at a rate of 67 cents per hour worked.

As per the new record-keeping requirements, from 1 March 2023, individuals must maintain an ongoing diary for the hours and days they work from home. Transitional rules on making a claim for 2022–23 income year will apply. For the 2023–24 and later income years contemporaneous records of hours and days worked from home must be kept for the entire income year.

Announcement(2-Nov-2022)

Consultation period(30-Nov-2022)

Released(16-Feb-2023)

FBT record-keeping overhaul - simplification of obligations

Proposed legislation will give the Commissioner of Taxation the power to allow companies to reduce their FBT compliance costs by utilising other corporate tax records. This initiative will also reduce the complexity of FBT compliance obligations as employers will be able to rely on other substantiation documents to finalise FBT returns.

Employers may still choose to use approved forms such as employee declarations and the prescribed forms detailing the fringe benefits provided to employees and associates if they wish. In some instances, it may benefit an employer to continue using standard FBT measures.

This measure is currently still at exposure draft stage and will require parliamentary approval. The effective start date for the change will be the first FBT year (1 April) after the bill receives royal assent.

Off-market share buy-backs - a revised tax approach

After first being announced as an integrity measure in the October 2022–23 Federal Budget, the federal government has tabled draft legislation into parliament outlining amendments to the share buy-back provisions for listed public companies. This measure, once enacted, will align the tax treatment of off-market share buy-backs and on-market share buy-backs.

An on-market buy-back generally happens if the share is listed on a stock exchange and the buy-back transition occurs through the stock exchange. Any other type of buy-back is considered an off-market buyback.

This measure will ensure that the buy-back price does not include any dividend payments (potentially frankable) when a listed public company conducts an off-market share buy-back of shares or nonshare equity interests. It will bridge the capital benefit gap created by franking credit offsets received by shareholders. This measure excludes off-market share buy-backs undertaken by private companies and companies that are listed on a stock exchange but are not widely held.

Announcement(9-Sep-2022)

Consultation(9-Sep-2022)

Introduced

Passed

Royal Assent

Date of effect

Announcement(17-Nov-2022)

Consultation(17-Nov-2022)

Introduced(16-Feb-2023)

Passed

Royal Assent

Date of effect

Commissioner’s directive - small business tax education courses now obligatory

The Commissioner of Taxation now has new powers to direct a small business taxpayer to undertake a record-keeping education course in lieu of an administrative penalty.

The new directive will be initially limited to small business owners in order to assist them in keeping up to date with tax obligations.

The individual must then provide the Commissioner with evidence of completion of the course in order to avoid financial penalty. The Commissioner will be able to issue a tax-records education direction to an entity from 1 April 2023.

Announcement(3-Aug-2022)

Consultation

Introduced(3-Aug-2022)

Passed(28-Nov-2022)

Royal Assent(12-Dec-2022)

Date of effect(12-Mar-2023)