PS LA 2018/1 – Guidance to ATO staff on when to refer SMSF auditors to ASIC for potential disciplinary action

Thomson Reuters reports its understanding that the ATO will release Practice Statement PS LA 2018/1 – Self-managed superannuation funds – referral of approved SMSF auditors to ASIC on Thursday, 18 October 2018 [LTN 197, 12/10/18]. ASIC is responsible for taking actions against approved SMSF auditors who have not met their ongoing obligations, and ATO staff have the…

Labor policy to double maximum ‘civil penalties’ for ‘promoting’ ‘tax exploitation schemes’ to $10m – against the backdrop of the Appleby leak of client documents in Bermuda, including the now contentious Glencore restructuring and allegations the ‘Big 4’ accountants could have been ‘promotors’

On 11 October 2018, the Labor party announced that it would double ‘promotor penalties’ from a maximum of $1m for individuals and $5.25m for corporations to $2m and $5.5m respectively. This might be fair enough, but it is important to have a sense for how low the bar is set for these penalties (it is…

Douglass v CofT – Engineer’s ‘personal services income’ couldn’t be shared with his wife as the partnership did not pass the ‘results test’ and did not carry on a ‘personal services business’ – 50% reckless penalty upheld too

The AAT has affirmed that income received for engineering services was subject to the personal services income (PSI) rules, as the partnership business did not pass the results test. The facts were as follows: The taxpayer was the sole service provider of a control systems engineering business, carried on by the taxpayer and his wife…

PCG 2017/1 – Procurement, marketing, sales and/or distribution hubs – new Schedule 2 for ‘non-core’ procurements (25% safe level of ‘mark-ups’) – ATO audit allocation of resources advice for practical ‘swim between the flags’ compliance guidance

PCG 2017/1 was issued in January 2017, to give practical compliance guidance on transfer pricing issues related to centralised operating models involving procurement, marketing, sales and distribution functions. On 11 October 2018, the Commissioner issued an addendum to this PCG, adding Schedule 2 for ‘non-core’ procurements. In broad summary, the ‘green’ (safe) level of ‘mark-up’, is…

BEPS Action Plan 14 – ‘Mutual Agreement Procedure’ (MAP) to resolve disputes within ave. 24 months – 2017 statistics show breakdown for 85 countries

10/10/2018 – Improving the effectiveness and timeliness of dispute resolution mechanisms is the aim of Action 14 of the BEPS Action Plan (read the final report on Action 14 of the BEPS Action Plan) and is also part of the wider G20/OECD tax certainty agenda. The Action 14 minimum standard requires jurisdictions to seek to…

Board of Taxation – CEO’s update on their September 2018 meeting – small business concessions, FBT compliance cost, tax residency for individuals, Taxation of agriculture, Tax and accounting standards, 2019 meeting dates and locations

Overview of current agenda The following is an overview of our current work program, which includes: Review of small business tax concessions; Review Voluntary Tax Transparency Code (the Code) and a broader consideration of tax transparency trends in Australia and globally; Consideration of certain aspects of not-for-profit tax concessions; Further work on tax residency for…

Sub-$50m turnover companies to get their 27.5% rate to reduced to 25.0% five years earlier: 2020/21 instead of $2026/27 – after Labor agrees to support the measure

On 11 October 2018, the Prime Minister; Mr Morrison, announced that his Government would introduce legislation during the next session of Parliament, fast-tracking our business tax relief for more than three million businesses that employ nearly seven million Australians. The way this would accelerate savings for both incorporated and unincorporated businesses (with sub-$50m turnover, is…

Aussiegolfa Pty Ltd (Trustee) v CofT – ATO will not appeal its loss on the superannuation ‘sole purpose’ test and will accept its win on the ‘sub-fund’ being the relevant entity for the ‘in-house assets’ 5% cap issue

The ATO will not seek special leave to appeal to the High Court from the decision of the Full Federal Court in Aussiegolfa Pty Ltd (Trustee) v CofT [2018] FCAFC 122. This Tax Technical Article relates to the Full Federal Court’s decision. The ATO’s decision not to appeal was revealed in an ASX announcement by…

Sales suppression software – ATO reminds people of the ban, the transitional relief and their audit experience of abuse using this sort of software

The law banning ‘sales suppression software tools’ (Suppression Software) became operative on 4 October 2018 and the ATO posted advice about this on its website, the following day. Then, on 10 October 2018, it posted a more ‘breezy’, shorter and more pointed article. (See related Tax Technical article.) It says that “these tools serve no…