M o r g a n’ s   T a x   M o n t h

– June 2013 Developments –

This is a collection of developments in Australian tax law and practice that occurred in June 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

*Tax (2013 No 2) Bill – amended to delete tax agent regime for financial planners [1]

*Tax Laws Amendment (2013 Measures No 3) Bill 2013 – Financial planners get 12-month extension to comply with TASA: Bill introduced and passed [2]

*Tax Laws Amendment Bills 1, 2 and 3 all passed [3]

*Tax Bill (2013 No 4) introduced: refunding excess GST; R&D changes [4]

*Major tax Bills passed: Pt IVA and transfer pricing amendments; loss carry back; medical expenses rebate, etc [5]

Private Health Insurance Amendment Bills pass Reps [6]

PAYG withholding schedules made – by registered ATO instrument [7]

*Requirement to lodge 2013 annual tax returns – determinations made [8]

Effective lives of Depreciating Assets determined by the Commissioner – new determination registered [9]

International Cricket Council Development International Limited to be tax exempt for 5 years – Regulations registered [10]

Baby Bonus reduction etc – Bill passed [11]

 

Announcements

*New PM and Treasurer sworn in (following change in leadership) [12]

*‘Tax and Transfer Policy Institute’ launched and ATO will double the amount of ‘de-identified’ tax return data in the public domain available for research [13]

*Preventing “dividend washing”: Discussion Paper released by Treasury [14]

*Capping of self-education expense deductions from 1 July 2014: Treasury paper released [15]

Treasury’s forward work program on tax measures updated and released [16]

Government to review regulatory arrangements of employee share schemes for start-ups [17]

Employee share schemes: details of Govt review [18]

*Preventing dividend washing – specific integrity rule: Assistant Treasurer [19]

 

 

CASES AND APPEALS

High Court

*Agius v The Queen – Wickenby: High Court dismisses taxpayer’s appeal against conviction against second charge [20]

FCT v Crown Insurance (Vanuatu) – High Court refuses Commissioner leave to appeal decision that insurance income did not have an Australian source [21]

Reardon & Anor v DCT – High Court refuses directors leave to appeal against summary judgment given under DPN notice provisions [22]

Weeks v FCT – High Court refuses special leave to appeal from decision that termination payment was not a ‘genuine redundancy payment’ [23]

 

Full Federal Court

 

Federal Court

*Hua Wang Bank Berhad & Ors v DCT – Taxpayers refused appeal from GIC decision [24]

*Derrin Brothers Properties Limited v DCT – Wickenby: No grounds to appeal decision to refuse to grant stay of summary judgment [25]

*FCT v Pham – AAT errs in making non-disclosure order to protect taxpayers in defending criminal proceedings [26]

 

Federal Circuit Court

 

Administrative Appeals Tribunal (AAT)

*Taxpayer’s appeal dismissed as ‘share awards’ treated as Div 13E Qualifying Rights that vested just before the GFC – 25% penalty upheld too [27]

*Re Trustee for the Farant Family Trust and FCT – Delivery drivers were common law employees: PAYG Liabilities; SGC & FBT assessments upheld [28]

*No grounds to re-open AAT hearing to introduce new evidence [29]

*Indian taxpayer a ‘resident’ despite absences from Australia – but he and his wife did own a house here and she and their adult children lived here [30]

*Re Hefner and FCT – non-commercial losses cannot be off-set against other income under the discretion [31]

*Re Ozone Manufacturing Pty Ltd and FCT – R&D tax offset denied on ‘beverage purifier devices’ [32]

Re Matthews and FCT – AAT has no jurisdiction to hear taxpayer’s claim for review of BAS liabilities [33]

 

Other Courts & Tribunals

*DCT v Robertson – Summary judgment granted for GST debts of a partnership [34]

Appeals

*Commissioner appeals in Cancer and Bowell Research case, despite winning one point and having the other referred back to him [35]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

*Sent case – ATO agrees that the Taxpayer’s income included both accrued and un-accrued bonuses applied to executive share trusts [36]

*Denlay case – ATO’s Wickenby garnishee notices set aside as wholly unreasonable [37]

*Re: ZZGN v FCT in the AAT – Commissioner’s interim views on deductibility of PRRT exploration [38]

*Timing of GIC deductibility: ATO view on Nash case [39]

Hua Wang Bank Berhad challenge on notice to produce from Samoa and Picton Finance on share trading in Vanuatu [40]

 

Rulings

TR 2013/4 – Effective life of depreciating assets, from 1 July 2013 [41]

 

Determinations

TD 2013/14 – Meaning of “deployment” under s 23AG [42]

TD 2013/15 – Car depreciation limit for 2013-14 is $57,466 [43]

TD 2013/D5 – Dividend access share arrangement a likely Pt IVA scheme in the nature of ‘dividend stripping’ [44]      26

 

Class Rulings & Product Rulings

CR 2013/33-39 – Transfer payments; business restructure; R&D; FBT; demerger; early retirement; GST [45]

PR 2013/13 – Income consequences of an option product [46]

CR 2013/40-46: Early retirement scheme; GST; equity notes; FBT; restructure; disability support; capital notes [47]

CR 2013/47 – Xstrata shareholders can claim CGT scrip-for-scrip rollover on exchanging for shares in Glencore International [48]

 

ATO Interpretive Decisions (ATOIDs)

 

Practice Statements

PS LA 2013/2 – Practice Statement on provision of accredited economic advice [49]

 

Tax Alerts

 

Other Commissioner news

*GIC and SIC rates released for July-September 2013 quarter [50]

*Div 7A: private company loans – 2013-14 benchmark interest rate down to 6.20% (from 7.05%) [51]

Means tested ‘private health insurance rebate’ assessed in 2012/13 return – new Medicare income thresholds published with tables [52]

Tax Commissioner and his scrutineers to appear before Parliamentary committee [53]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

Tax Bill (2013 No 4) introduced: refunding excess GST; R&D changes [54]

 

Cases (GST)

*Re Sanctuary Australasia Pty Ltd and FCT – Taxpayer not entitled to review of s8AAZLGA decision to withhold a refund once superseded by a zero amended assessment [55]

ATS Pacific Pty Ltd v FCT – Taxpayer appeals Federal Court decision that travel agent’s services to other travel agents overseas are not GST-free [56]

*Bayconnection Property Developments Pty Ltd & Ors v FCT – Appeal dismissed re claimed ITCs re property development [57]

*High Court dismisses Taxpayer’s application to appeal from decision imposing ‘margin scheme’ tax instead of ‘going concern’ GST-free treatment [58]

*Re The Trustee for Andrew Garrett Family Trust No 3 and FCT – objection not lodged as alleged, so no deemed objection decision for AAT to review – refund GST [59]

*Re Clayton and FCT – Taxpayers not carrying on an enterprise for GST purposes [60]

Yacoub v FCT – Taxpayer discontinues appeal to Full Federal Court leaving decision they were liable as partners to GST on the sale of the property [61]

 

Rulings & Other things (GST)

ATO view on Wynnum Holdings cases – GST refunds and carrying on an enterprise [62]

ATO view on Yacoub case – Taxpayers liable for GST on sale of property as the relevant entity was a partnership and they were liable for its tax debts [63]

*PS LA 2013/2 (GA) – GST treatment of Australian taxes, fees and charges determined by Australian government agencies won’t be disturbed retrospectively [64]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

*Super income streams: ITA Regs amended to allow pension exemption to continue in fund after death of member and a revised proportioning rule [65]

SMSF levy fee increase and payment date brought forward under new Regulations [66]

*Calculation of interest on unclaimed money (including super): regs made to pay interest at the 10 year bond rate [67]

*Bills to allow withdrawal of excess concessional super contributions to pay tax outside the fund [68]

MySuper transfers – loss relief and CGT roll-over: Bill amended [69]

Various Superannuation Bills passed and await Assent [70]

MySuper reform Bill receives Royal Assent [71]

Trans-Tasman Retirement Savings Portability to start on 1 July 2013 [72]

 

Cases (Super)

SCCASP Holdings as trustee for the H&R Super Fund v FCT – Taxpayer seeks leave to appeal decision about ‘special income’ to the High Court [73]

Re Fraser v FCT – taxpayer discontinued appeal from AAT decision that he was not an ‘eligible person’ and his contributions were not deductible [74]

*Re Young & Anor and FCT – Super surcharge assessments set aside for Deputy State Solicitors of WA based on Constitutional Grounds [75]

 

Rulings & Other things (Super)

APRA final reporting standards for superannuation released (for APRA regulated funds) – MySuper and SuperStream reforms [76]

Lost and unclaimed superannuation money: discussion paper released – homeless money reducing but still $16.8bn [77]

$18.1bn in lost super according to Bank report [78]

Super contributions tax for incomes above $300,000: ASFA raises concerns with draft regulations [79]

TD 2013/10-13 & SMSFD 2013/1 – Beneficiaries of deceased super members – various determinations [80]

 

 

CARBON TAX

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

 

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

*‘Anti-gag’ Bill receives Royal Assent – Commonwealth Agencies can’t prohibit lobbying [81]

*Requirements for those reviewing charities’ reports – Regulations registered [82]

*Charities and annual reports: Regulations made about contents and transition [83]

*ASIC and the ACNC sign an MOU [84]

*Charities Bill 2013 and Charities (Consequential Amendments and Transitional Provisions) Bill 2013 – passes House of Representatives [85]

*Minimum Governance Standards for Charities – Senate agrees to previously registered regulation [86]

 

 

BOARD OF TAXATION

*Board of Tax review of ‘thin cap – arm’s length test’ and post implementation review of ‘debt/equity’ rules for intent and arbitrage – terms of reference [87]

 

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

ANAO report on ATO management and reporting of GST and FBT info – systems and information appear reliable [88]

ATO administration of debt relief arrangements: ANAO report [89]

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

Proposal to regulation financial planners under the Tax Agents’ Services Act – transcript of Committee’s hearings [90]

FSC calls for more time for financial planners to comply with TASA [91]

Financial Advisers – amending the Corporations and Tax Agents Services Regulations ahead of their regulation [92]

 

 

STATE TAXES

Legislation & Announcements (State)

ACT Budget 2013-14: abolition of conveyance duty accelerated [93]

ACT: Payroll Tax Amendment Bill introduced – to better harmonise this Act [94]

ACT: First Home Owner Grant Amendment Bill introduced [95]

NSW Budget 2013-14: payroll tax threshold increase and $15k First Home Owners’ Grant extended 2 years to June 2015 [96]

NSW Budget Bill: State Revenue and Other Legislation Amendment (Budget Measures) Bill 2013 [97]

Queensland Budget 2013-14: payroll tax threshold increase deferred [98]

Queensland Budget Bill [99]

SA Govt announces payroll tax concession ahead of Budget [100]

SA Budget 2013-14: payroll tax rebate for small businesses [101]

SA: Budget Bill introduced extending the Housing Construction Grant by 6 months [102]

SA: land tax thresholds for 2013-14 financial year to remain the same as for 2012-13 [103]

Vic: State Tax Laws Amendment (Budget and Other Measures) Bill update [104]

WA – Duties Legislation Amendment Bill 2013 – passes Legislative Assembly – it will unwind the abolition of transfer duty on non-real business assets [105]

 

Cases (State)

ACT stamp duty: ISPT Pty Ltd & Comr for ACT Revenue – taxpayer loses appeal – lease dutiable under transitional provisions [106]

NSW land tax: Cornish Investments Pty Limited v Chief Comr of State Revenue (RD) – primary production exemption denied – taxpayer loses appeal [107]

NSW land tax: Yang v Chief Comr of State Revenue – concession for unoccupied land intended to be owner’s PPR – failed on onus [108]

NSW land tax: Rajan & Anor v Chief Comr of State Revenue – double tax relief for secondary taxpayer correctly calculated [109]

NSW land tax: Lo v Chief Comr of State Revenue – taxpayer loses principal place of residence land tax exemption appeal [110]

 

Rulings & Other (State)

Qld payroll tax: profit distributions and loan accounts – Public Ruling [111]

Queensland Payroll Tax – public ruling on ‘wages’ and reminder about Annual Returns [112]

Qld stamp duty: new and revised Public Rulings [113]

SA: payroll tax exporters rebate; land tax; interest rates, etc – Information Circulars [114]

Vic: new motor vehicle rate of duty for passenger cars [115]

 

 

OTHER DEVELOPMENTS

OECD adopts Declaration on [Tax] Base Erosion and Profit Shifting [116]

*Accountants to get a limited licence to give financial advice from 1.7.13 and their exemption ends after 3 year transition – regulations registered [117]

Taxation revenue falls in March quarter: ABS [118]

Official interest rates unchanged at 2.75% [119]

*‘Tax Justice Network’ recommends rewarding tax evasion whistleblowers and that Multi-national Enterprises report worldwide to the ATO with ‘unitary tax’ details [120]

Rio Tinto calls for corporate tax transparency [121]

Britain moves on tax transparency ahead of G8 Summit [122]

OECD outlines steps for global system of automatic exchange of tax information [123]

Tackling tax evasion globally: ICIJ releases Offshore Leaks Database [124]

 

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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