Tax Month – February 2013

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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