On Tuesday, 6 October 2020, Treasurer Josh Frydenberg handed down the 2020–2021 Federal Budget. He said the Budget was “all about jobs” (including creating new jobs and getting the unemployed back into work again) and getting the economy moving again. The Treasurer said that COVID-19 will see the deficit reach $213.7 billion this year, falling to $66.9 billion by 2023–2024. This Budget expands the Government’s 10-year infrastructure pipeline and, on personal taxation, confirms that the previously legislated Stage 2 tax cuts will be brought forward by two years, from 1 July 2022 to 1 July 2020.

In order to provide certainty for foreign incorporated businesses conducting operations in Australia, the government announced in the 2020 Budget that it will be seeking to make changes to clarify the corporate residency test. While details have not been forthcoming in the days since the Budget, the Board of Taxation has recently released its review on that same topic, potentially providing a glimpse of what the amending legislation may contain, including what constitutes “sufficient economic connection” and “core commercial activities”.

With the ultimate distraction of the pandemic, many businesses around Australia may not be aware that they will be required to lodge a Taxable Payments Annual Report (TPAR) for the first time this year. Not only has the TPAR expanded to include road freight, information technology, and security, investigation or surveillance services this year, due to COVID-19, businesses such as restaurants, cafés, grocery stores, pharmacies or other retailers that have hired contractors to deliver goods to customers may also be captured under the regime.