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COVID-19: Managing taxation obligations - ATO’s administrative relief approach

COVID-19: ATO’s administrative relief approach

Angela Wood and Annemarie Wilmore discuss the ATO’s administrative relief approach to the COVID-19 pandemic.

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The nature and pace of the evolving COVID-19 crisis is challenging the strength and resilience of most businesses in many different and ever-changing ways.

To combat the challenges faced by the community at large, over the past week, Federal & State Governments have announced spending stimulus packages and tax relief measures aimed at supporting the community and businesses through some of these challenges. On 24 March 2020 the Federal Government acted swiftly to pass legislation on a number of measures including early access to superannuation, cash flow assistance to employers, increasing the instant asset write-off and acceleration of depreciation deductions.

The ATO has also made its own announcements regarding its willingness to implement administrative measures to assist Australian businesses that are impacted by the pandemic. A number of these administrative measures include the ability for those businesses who are impacted by COVID-19 to request deferral of their payment and/or lodgement obligations. It is important to understand that the ATO has not provided a blanket deferral of either payment or lodgement due dates. The Commissioner will continue to consider requests for extensions of time on request by a taxpayer, and having regard to the taxpayer’s particular facts and circumstances.

We are working with a number of taxpayers who are impacted by COVID-19 to support their applications to the ATO for lodgment and payment deferral relief, and have been able to successfully obtain it across a number of fronts including business activity statements, PAYG instalments, income tax, and fringe benefits tax.

While there is a considerable amount of information available to taxpayers regarding the ATO initiatives (via the ATO’s COVID-19 website), it is must be to borne in mind that the measures are administrative in nature, and involve the exercise of discretion by the Commissioner of Taxation. Automatic implementation should not necessarily be expected. There is a need for taxpayers to reflect upon the nature of the measures, how they may align with their business objectives, and whether there is a need to negotiate bespoke arrangements with the ATO.

Recommendations

Key recommendations for those entities that are affected by COVID-19 and for those entities that would be seeking relief from the ATO include:

  • closely monitor developments;
  • adopt a proactive engagement strategy with the ATO;
  • clearly capture and articulate facts and circumstances and how that supports the discretion to be exercised in your favour; and
  • support your position with objective evidence and documentation.

KPMG hosted a webinar on 25th March 2020 with Mr Jeremy Geale, ATO COVID -19 Response Committee Chair.

Jeremy kindly accepted to answer some important questions on ATO’s current & future support measures in the present environment.

A recorded version of the webinar and key takeawys can be found on KPMG Tax Now.

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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