M o r g a n’ s   T a x   M o n t h

– February 2013 Developments –

This is a collection of developments in Australian tax law and practice that occurred in February 2013 and which aims at being of relevance to tax lawyers.*

F John Morgan
A member of the Victorian Bar (www.FJMtax.com)

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

Legislation update: Australia – India DTA; Federal Circuit Court Consequential Amendments; Customs Amendment [1]

Committee recommends passing 2012 Tax Bill No.6 with changes for in-house fringe benefits, limited recourse debt and rebates for medical expenses etc. [2]

*Part IVA and transfer pricing amendment Bill introduced [3]

*Tax Bill (No 1) 2013 introduced: Loss carry-back; SMSF asset acquisitions; FBT and airline benefits: etc [4]

Consolidating dependency tax offsets – draft legislation released [5]

Venture capital: Government agrees to Board of Taxation’s recommendations [6]

 

Announcements

*Confidentiality of tax information to be wound back for multinationals – Government announces plans [7]

*Government confirms no flood levy to rebuild after recent Queensland floods [8]

*Monthly tax instalments by large companies: consultation paper released [9]

 

 

CASES AND APPEALS

 

High Court

 

Full Federal Court

*Southgate Investment Funds Limited & Ors v DCT – Taxpayer wins right to have refusal to grant stay of execution re-heard [10]

*FCT v Macquarie Bank Limited & Anor (Mongose) – Pt IVA: Commissioner loses appeal on gain from sale of shares after consolidation – no tax benefit [11]

 

Federal Court

*Yazbek v FCT – individual can an amendment outside the 2-years limit, under the ‘beneficiary of a trust’ qualification, despite being only a discretionary beneficiary and the amendment not being as a beneficiary [12]

Donoghue v FCT – Injunction granted to prevent Commissioner using certain documents [13]

Macquarie Bank Limited v FCT – Taxpayer fails to prevent Commissioner issuing 5 years amended Overseas Banking Unit assessments [14]

 

Federal Circuit Court

 

Administrative Appeals Tribunal (AAT)

Re Herbert and FCT – No extension of time for objections lodged 22 years and 12 years late! [15]

*Re Purvis & Ors and FCT – Payments for “loss of pilots’ licence” assessable as ETPs [16]

*Date of disposal of CGT asset critical to accessing CGT small business concessions [17]

*Re Batchelor and FCT – Repaid deposit an assessable recoupment [18]

Re Flood and FCT – Extension of time to lodge an objection refused [19]

 

Other Courts & Tribunals

Cigarette smugglers fined almost $8m [20]

DCT v Sent – Summary judgment granted for almost $23m but a stay may be granted for application for leave to appeal to the High Court [21]

 

Appeals

Sent v FCT – Taxpayer has applied to the High Court for Special Leave to Appeal decision that bonus amounts paid to a trust were ordinary income [22]

Healey v FCT – taxpayer applies for special leave to appeal to the High Court after being assessed to a capital gain she was presently entitled from a trust [23]

*Binetter v DCT [2012] FCAFC 126 now stands after High Court refuses Taxpayer leave – s264 notice valid [24]

*Commissioner appeals AAT loss in Re Dickinson and FCT; Re Fabig and FCT – where it was held that the taxpayers were entitled to scrip-for-scrip relief [25]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

Rental deductions allowed: ATO view on Bocaz case (it was decided on its facts …) [26]

Pt IVA and foreign tax credits: ATO view on Citigroup case [27]

*Hansen Yuncken Pty Ltd case – effect of paying money the subject of FCT Garnishee Notice into Court [28]

 

Rulings

TR 2012/2 – draft changes regarding effective lives of depreciating assets [29]

*TR 2013/2 – Gifts to school or college building funds [30]

TR 2013/3 – R&D tax offsets: feedstock adjustments [31]

 

Determinations

TD 2013/3 – Value of goods taken from stock for private use: 2012-13 [32]

TD 2013/4 – FBT: Reasonable 2013-14 food and drink amounts for LAFHA recipients [33]

 

Class Rulings & Product Rulings

CR 2013/11 – Conversion of shares leads to CGT event H2, but no capital gain [34]

CR 2013/12-14 – Capital proceeds; GST and developer contributions; GST and dentists [35]

CR 2013/15-16 – Equity incentive plan; disability funding program SA [36]

 

ATO Interpretive Decisions (ATOIDs)

 

Practice Statements

*PS LA 2011/5 amended – Recovery of administrative overpayments [37]

 

Tax Alerts

 

Other Commissioner news

AUSTRAC information to the ATO: guidelines released for disseminating bulk information [38]

*Electronic Funds Transfer for refunds from 1 July 2013 for individuals [39]

*Real-time compliance approach for higher consequence taxpayers [40]

ATO data on tax and superannuation litigation trends [41]

Claiming R&D expenditure incurred to an associate but not paid [42]

 

 

GST DEVELOPMENTS

 

Legislation & Announcements (GST)

*Refunding excess GST – further draft of Division 36 released for retrospective effect back to 17 Aug 2012 [43]

 

Cases (GST)

*HC Legal Pty Ltd v DCT – GST refund on fixed price legal services for 10 years reversed and Statutory Demand issued – Application to set it aside failed [44]

*Cyonara Snowfox Pty Ltd v FCT – taxpayer has applied for special leave to appeal to appeal to the High Court in GST case about margin scheme and going concern [45]

*MBI Properties Pty Ltd v FCT – GST: increasing adjustment for acquisition of going concern [46]

Re Bayconnection Property Developments Pty Ltd and Ors and FCT – taxpayers appeal ‘no enterprise’ and 75% penalties decision of AAT [47]

*Duoedge Pty Ltd v Leong & OCMC Pty Ltd – Rectification of contract re GST refund denied [48]

*Central Equity Limited & Anor v FCT – taxpayer has discontinued appeal leaving GST payable on pre-1 July 2000 contracts settled after that date [49]

 

Rulings & Other things (GST)

*GSTD 2013/1 – GST: Reimbursement of a dishonor fee (failed payment fee) is not consideration for the underlying supply if these conditions are met [50]

*GSTR 2013/D1 – GST and adjustment notes [51]

Professional Administration Service Centres Pty Ltd v FCT – GST assessments: matter unjustly dismissed – ATO Decision Impact Statement [52]

ATO ID 2013/9: GST – representative of an incapacitated entity that is neither registered nor required to be registered, cannot be registered itself [53]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation (Super)

Committee recommends amendments to Superannuation Bill with last tranche of the ‘MySuper’ changes [54]

 

Cases (Super)

Re Dowling and FCT – Excess super contributions tax case: taxpayer has partial win [55]

*SMSF adviser sentenced to 2 concurrent suspended sentences of 18 months in prison for pleading guilty to 2 charges of gaining financial advantage by deception [56]

*SMSF trustee gets 14 days jail for breach of rules, says Tax Office [57]

 

Rulings & Announcements etc. (Super)

Report encourages tax and super changes to reward unpaid caring [58]

Intra-fund advice to remain exempt from FoFA adviser charging regime [59]

Coalition calls on Government to put any super tax changes to the people [60]

*PM says no tax on super withdrawals for over-60s [61]

Interhealth Superannuation Fund v FCT – SMSF: no leave to add new ground of appeal – ATO Decision Impact Statement [62]

Minister confirms that MPs earning over $300,000 will pay more tax on super [63]

SMSF supervisory levy to be increased from $200 to $300, effective from the 2013-14 income year – Bill Introduced [64]

Foreign pension funds to get access to MIT withholding tax regime: law to be amended [65]

Stronger Super – MySuper and insurance: Govt to make changes to draft regs [66]

SMSF investment strategies: study highlights role for advisers [67]

Tax Office superannuation portability request scheme: SIS Regs amended [68]

*ASIC approved SMSF auditors – first registration on 1 Feb 2013 and over 1600 applications to date [69]

PS LA 2010/2 withdrawn – Commissioner no longer had the power to disqualify SMSF auditors or refer them to their professional organisation [70]

Total super assets reached $1.51 trillion at December 2012 [71]

*Changes to SGC rate and My Super – Survey shows many employers don’t have a plan yet [72]

 

 

CARBON TAX

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

Senate agrees to motions requiring release of information about mining tax collections [73]

*Mining tax generates $126m in its first 2 quarters [74]

*MRRT Amendment Bill introduced by Greens [75]

MRRT legislative determination: nil rate and exemption from lodging [76]

Senate committee to review development and operation of mining tax [77]

 

AUSTRALIAN CHARITIES & NOT-FOR-PROFITS COMMISSION (ACNC)

ACNC Advisory Board appointments [78]

Charities registered by ASIC – help from the ACNC [79]

 

BOARD OF TAXATION

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO.

IGT review of self-assessment system: report released [80]

 

TAX PRACTITIONERS BOARD & LEGISLATION

Tax agent services by financial planners: draft legislation and outline paper released [81]

Relevant experience for Tax Agents and prior learning for BAS agents [82]

 

STATE TAXES

Legislation (State)

 

Cases (State)

NSW land tax: Panthers Investment Corporation Pty Ltd & Anor v Chief Comr of State Revenue – land not owned by or in trust for rugby league club, so exemptions denied [83]

NSW stamp duty: CTI Joint Venture Company Pty Ltd v Chief Comr of State Revenue – arrangement was a novation, so not dutiable [84]

Rulings & Announcements etc. (State)

WA stamp duty: nominal duty relating to deceased estates – Commissioner’s Practice [85]

Vic stamp duty: revised duties forms – transitional period extended [86]

WA Govt pledges to raise payroll tax threshold from $750k to $800k in 2014/15 and $850k 2 years later (in 2016/17) [87]

 

 

OTHER DEVELOPMENTS

Official RBA interest rates – no change at 3.0% [88]

US moves to combat tax avoidance through use of tax havens [89]

G20 vows to tackle profit shifting [90]

“Financial adviser” / “financial planner” legislative changes to be introduced before 1 July – Accountants’ limited licence and tightening eligibility [91]

 

 

THE END

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NB: I have gathered these articles from various sources for the purposes of study and teaching and I have acknowledged the sources. None of this publication should reproduced in breach of copyright belonging to the acknowledged source. The headings to the articles are often mine (and shouldn’t necessarily be attributed to the publisher).

Source Abbreviations: ‘EDTN’ = Electronic Daily Tax News, published by CCH; ‘LTN’ = Latest Tax News published by Thomsons; and ‘Taxvine’ is the weekly publication by the Tax Institute of Australia; Greenfields = Greenfields Financial Services; TaxBar = Melbourne Tax Bar Association Newsletter at www.vicbar.com.au / Members / Bar Associations / Tax

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