Tax Technical – Monthly News

– January 2016 Developments –

This is a collection of developments in Australian tax law and practice that occurred in January 2016 and which aims at being of relevance to tax practioners.*

Compiled By

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

Liability limited by a scheme approved under Professional Standards Legislation

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts, Bills & Draft Legislation

Announcements

Google to pay A$265 million (UK£130 m) in tax settlement with UK HMRC – critics say it’s too little – basis for future tax returns agreed

BEPS transparency progress: Australia signs agreement for automatic exchange of ‘Country-by-Country reports (CbC reports)

EU response to OEDC BEPS recommendations

 

CASES AND APPEALS

High Court

Full Federal Court

Kocharyan v FCT – taxpayer loses appeal about losses in forestry MIS investment – none of the technical appeal grounds upheld

 

Federal Court

Breakwell v FCT CGT: related entity debt to be included in MNAV test – not statute-barred; taxpayer loses appeal

FCT v Oswal (No 5) – Court dismisses hearing taxpayers’ testimony by video-link

Normandy Finance Pty Ltd v FCT – Payments from Vanda Gould orchestrated overseas companies to resident companies were loans, not shams

 

Administrative Appeals Tribunal (AAT)

Re Hughes and FCT – Pilot held to be Australian resident for tax purposes

Re Sandbach and FCT – Taxpayer fails burden of proof; interest not incurred

Re JLSP and Innovation Australia – Trial to test drug’s safety was a core R&D activity

 

Other Courts & Tribunals

Re Bhatti and FCT – Accountant’s work-related expenses largely disallowed

 

Appeals

Tech Mahindra Limited v FCT – taxpayer with P/E in Australia appeals decision that it is taxable on some of its services provided from India

Blank v FCT – taxpayer seeks leave to appeal to High Court – USD160m paid under ‘profit participation scheme’ held to be ordinary income

PFGG v FCT – taxpayer appeals decision that it was not entitled to ‘small business CGT relief’ because it was not a ‘small business entity’

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

Australian Building Systems Pty Ltd (In Liquidation) case – no s254(1)(d) retention obligation and no preference for Commissioner

 

Rulings

TR 2014/D1 on tax consequences of Employee Share Schemes operating outside the statutory regime – ‘Discussion Paper’ for further draft ruling

 

Determinations

Law Companion Guides

LCG 2015/2 – Addendum: Multinational anti-avoidance law: ATO guideline amended

 

Class Rulings & Product Rulings

Class and Product Rulings on 13 January 2016

CR 2016/5 – Early retirement scheme: Victoria University

CR 2016/6 – Swinburne University Academic Staff Voluntary Early Retirement Scheme 2015-16 is a s83-180 early retirement scheme

 

ATO Interpretative Decisions

Practice Statements

Draft Practice Statement on retrospective ‘transfer Pricing Penalties’ put on hold pending review of Chevron Case – no separate taxing power in DTA’s

General anti-avoidance Practice Statement – release of reviewed PS LA 2005/24 delayed by further consultation

 

Tax Alerts

Other ATO news or statements

Simplifying transfer pricing record keeping

CGT treatment of ‘‘Earn-out’s’ prior to passage of the Bill to enact the announced ‘look-through’ CGT treatment

ATO to release private company tax info in March

Car expense claims simplified to 66c per kilometer and PAYG withholding required on any allowance paid over that 66c amount

Information from insurers being used by ATO for investigation of wealthy individuals

Test case Litigation Program – ATO’s ‘reinvention’ of the program following consultation

Trust ABNs to be cancelled where no longer carrying on business

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

Cases (GST)

Re Crown Estates (Sales) Pty Ltd and FCT – taxpayers appeal to Federal Court against decision that ITC’s could not be claimed they were ‘agents’

 

Rulings, Announcements, Etc (GST)

Inbound Tour Operators (ITOs) – Widely-Based Settlement Offer – ATO will refund 75% of the overpaid GST on margins up to 4 year maximum

GSTR 2012/3 – draft addendum broadening view of GST-free retirement village services in ‘serviced apartments’ – meaning of ‘single complex’

GSTD 2016/1 – GST: employer not entitled to ITC for payment of superfund’s expenses because it’s a contribution to the fund

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

Cases (Super)

Ward and FCT – taxpayer appeals AAT’s decision not to re-allocate an ‘excess non-concessional’ contribution despite the resulting tax being ‘unfair’

 

Rulings & Other things (Super)

Accountants advising about SMSF’s must be appropriately licenced by 1 July 2016 – apply by 1 March to avoid the rush

 

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

Annual Statement deadline 31 January 2016: 19,000 still to submit with less than a month to go and 3,200 at immediate risk of having status revoked

 

BOARD OF TAXATION

Voluntary Tax Transparency Code – Consultation Paper released by Board

 

EXTERNAL SUPERVISORS – IGT; OMBUDSMAN, JCPAA & ANAO

TAX PRACTITIONERS BOARD & LEGISLATION

Re Gylman and Tax Practitioners Board – Tax agent re-registration denied – not a “fit and proper person”

Tax (financial) advisers must register with the Tax Practice Board (‘disclaimer’ period ended) – either ‘transitional’ to 30 June 2017 or ‘standard’ now

 

STATE TAXES

Legislation & Announcements (State)

Cases (State)

ACT payroll tax: Comr for ACT Revenue v G Kalsbeek Pty Ltd – penalty tax for tax default affirmed – Comr wins appeal

NSW payroll tax: Chan & Naylor Australia Pty Ltd v Chief Comr of State Revenue – commonly controlled businesses, so grouping affirmed

Vic stamp duty: – Kloester v Comr of State Revenue – property purchased in parents’ names – exemptions refused

 

Rulings & Other (State)

OTHER DEVELOPMENTS

THE END

 

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