Treasury Laws Amendment (2018 Measures No 2) Bill 2018 – various amendments to the requirements for venture capital tax concessions – Early Stage VCLP and ‘Early Stage Innovation Companies’ & Committee Report

The Government introduced the Treasury Laws Amendment (2018 Measures No 2) Bill 2018 into the House of Reps this Thur 8.2.2018 to implement the this previously announced measure (and one other, which I will not be covering). This Bill was referred to the Senate Economics Legislation Committee, on 15 February 2018, for report by 15 March…

Coventry v CofT – DFAT employee’s overseas earnings exempt from Australian tax, under s23AG, because diplomatic immunity was not ‘the only’ reason for no Pakistani tax (and draft DIS)

On 12 January 2018, the AAT has decided that a DFAT employee’s earnings while working in Pakistan were exempt under s 23AG of the ITAA 1936. This was because there was a Development Agreement, that gave the earnings exemption from Pakistani tax. I will explain why. Section 23AG(1) exempts, from Australian tax, any foreign earnings derived by…

Treasury Laws Amendment (MAAL extension) Bill 2018: draft legislation to catch supplies made by Australian trusts and partnerships which are linked to a ‘foreign entity participants’

On 12 February 2018, Treasury released an exposure draft of legislation to extend the application of the Multinational Anti-Avoidance Law (MAAL) to capture the use of certain trusts and partnerships that may otherwise circumvent the MAAL. This measure was announced in the 2017-18 Federal budget (in May 2017). The MAAL is located in Part IVA of the…

Taxpayer Alert TA 2018/1 – to multiply shareholding parcels to multiply franking credits (without being economically exposed on both parcels)

On 13 Feb 2018, the ATO issued its first Tax Alert for the 2018 year: TA 2018/1. It says that the ATO are reviewing arrangements that are intended to provide imputation benefits to Australian taxpayers who are not the true economic owners of the shares. Arrangements the Alert does apply to The ATO give an…

Tax treatment of ‘bare trusts’: Board of Taxation report makes 8 recommendations for change, including to legislate for a ‘look through’ approach, given the tenuous technical status of the extra-ordinarily wide practice

On Wed 14 Feb 2018, the Board of Taxation released its report Review of the Tax Treatment of Bare Trusts and Similar Arrangements to the public. The Board’s review was completed in June 2017. The Revenue Minister said the Board of Taxation has identified opportunities to simplify arrangements where the trustee has no or only minor powers of…

Edited versions of ‘private binding rulings’ now available on the ATO Legal database – to make them easier to find and search

On 12 Feb 2018, the ATO announced that edited versions, of Private Binding Rulings (EVs), are now available in the ATO Legal database (this produces a ‘search box’ and you can ‘refine search’ by ‘edited private advice’ to get all the EV’s on the subject matter for which you were searching). Moving them to the ATO…

PR 2018/1-3 – HSBC: ‘presently entitled’ share; Macquarie: interest deductibility; Macquarie: Capital protected loans and Div 247 effect on interest deductibility

The following Product Rulings were released by the ATO on Wed 14.2.2018: PR 2018/1 – Tax consequences of investing in the HSBC UCITS Common Contractual Fund. This ruling provides that the relationship between the fund manager and unit holders constitutes a trust and that the share of the net income of the trust to which…

TR 2018/2 – Record-keeping requirements: electronic records of transactions, elections and the like (revising 2005 ruling)

On 14 Feb 2018, the ATO issued Taxation Ruling TR 2018/2 on the record-keeping obligations of business taxpayers (individuals and companies) where records are kept in electronic form. The ruling contains a series of principles about electronic record-keeping. These principles are that: electronic records are recognised as documents for tax law purposes (Section 2B of…

ATO’s Statement on Corporate Tax Compliance – it assures is under control because of strengthened legislation (BEPS initiatives) and enhanced compliance efforts and focus

On 14 February 2018, the ATO issued a statement (on its website) seeking to assure taxpayers that it was well placed, after various ‘BEPS’ initiatives, to ensure that companies, including particularly big companies, were paying ‘appropriate’ amounts of Australian income tax. The ATO also wants to advise that it is already getting on top of…

Walsh v CofT – DPO issued against taxpayer set aside after he petitioned for his own bankruptcy (leading to a discharge of the tax debt)

The AAT has set aside a departure prohibition order (DPO), against a taxpayer, who had become bankrupt, as the DPO was no longer serving its purpose. The Commissioner issued assessments to the taxpayer/applicant totalling about $1.7m (for the 2003, 2004, 2005, 2007 and 2008 years). They arose out of money transferred to Vanuatu and they alleged…