The Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014 was introduced in the House of Reps on 4 December 2014. It proposes to amend the Inspector-General of Taxation Act 2003 by transferring the tax investigative and complaint handling function of the Commonwealth Ombudsman to the Inspector-General of Taxation, and merging that function with the Inspector-General’s existing function of conducting systemic reviews. This provides taxpayers with a specialised complaint-handling process for taxation matters and aligns the systemic review role of the Inspector-General with the correlative powers and functions of the Ombudsman.
According to the Government, the Inspector-General is well-suited to have the sole jurisdiction to investigate individual complaints about the administration of taxation law matters, in addition to the current systemic function. It said that under the changes the Inspector-General will be given all of the powers and functions necessary to comprehensively investigate and handle complaints relating to the administration of taxation laws (of both a systemic and individual nature).
The Bill also proposes consequential amendments to the ITAA 1936 and the TAA. For example, key proposed amendments will allow the Inspector-General to request that a person making a complaint quote their TFN to facilitate the resolution of the matter with the ATO. The changes will also allow ATO officers to provide taxpayer-protected information to the Inspector-General for the purposes of investigating or reporting a matter. Consequential amendments are also proposed to the Tax Agent Services Act 2009 so that members and associated staff at the Tax Practitioners Board may also provide information to the Inspector-General for these purposes.
The amendments are proposed to commence the later of the fourteenth day after the Bill receives Royal Assent or 1 May 2015.
The regulations in the Ombudsman Act 1976 that provide for the payment of fees and allowances to persons for attending or appearing as witnesses will also apply as if they were regulations under the Inspector-General of Taxation Act. The Governor-General may still make regulations that provide for the payment of fees and allowances to persons for attending or appearing before the Inspector-General or a member of the Inspector-General’s staff.
The proposed amendments were announced in the 2014–2015 Federal Budget.
Other amendments
The Bill also makes the following amendments:
CGT exemption for compensation and insurance
Amends the ITAA 1997 to ensure that:
- a CGT exemption is available to certain trustees and beneficiaries who receive compensation or damages;
- a CGT exemption is available to trustees of complying superannuation entities for insurance policies relating to illness or injury; and
- the CGT primary code rule applies to capital gains and capital losses that are disregarded by complying superannuation entities, arising from injury and illness insurance policies, life insurance policies and annuity instruments.
Super excess non-concessional contributions – option to withdraw
Amends the ITAA 1997 and the TAA to make the taxation treatment of individuals with excess non-concessional superannuation contributions fairer.
Super fund mergers
Amends the ITAA 1997 to ensure that individuals whose superannuation benefits are involuntarily transferred from one superannuation plan to another, without their request or consent, are not disadvantaged through the transfer.
Proceeds of crime order – tax info disclosure
Amends the TAA to allow ATO officers to record or disclose protected information to support or enforce a proceeds of crime order. It also clarifies that all orders relating to unexplained wealth made under a state or territory law are included in the definition of “proceeds of crime order”.
Exploration development incentive
The amendments in the Bill, together with the Excess Exploration Credit Tax Bill 2014 (also introduced in the House of Reps on 4 December 2014), introduce an exploration development incentive by amending the ITAA 1997 and other tax legislation to provide a tax incentive to encourage investment in small mineral exploration companies undertaking greenfields mineral exploration in Australia.
Miscellaneous amendments
The Bill makes a number of miscellaneous amendments to the taxation and superannuation laws. The amendments include style changes, the repeal of redundant provisions, the correction of anomalous outcomes, and corrections to previous amending Acts.
Note the Bill will not be debated until after Parliament resumes on 9 February 2015.
Source: Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014