M o r g a n’ s   T a x   M o n t h

– June 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in June 2014 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 Laws Amendment (2014 Measures No 1) Bill 2014 receives Royal Assent: (1) limited refunds of overpaid GST; & (2) farm management deposits improved [1]

*Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 – Anti-dividend washing, discontinued measures protection [2]

*Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014 passes House of Reps – restrictions on dedn for mining rights and information [3]

FATCA Agreement Implementation Bill 2014 – passes into law [4]

*Budget deficit levy Bills pass into law [5]

*Paid Parental Leave Amendment Bill pass House of Reps [6]

*Carbon Tax and Mining Tax repeal Acts re-introduced [7]

*Green Army allowance subject to withholding (but no super guarantee) – Regs amended [8]

*Service with ADF in Afghanistan tax-exempt and closure of the AVO (consequential changes): Regulations amended [9]

*Revised Switzerland-Australia Double Tax Treaty signed and draft legislation to make it law released [10]

*Effective life of depreciating assets: new determination made [11]

*Requirement to lodge 2014 returns: legislative instruments made [12]

*Withholding Schedules for 2014-15 year released [13]

 

Announcements

*Tax dispute inquiry announced by House of Representatives Tax Committee [14]

*AUSTRAC signs finance intelligence exchange agreement with Peru [15]

*Abbott Government’s Commission of Audit – final report tabled [16]

*PAYG instalment threshold changes to start on 1 July 2014 [17]

 

 

CASES AND APPEALS

High Court

*Howard v FCT – Damages assessable to taxpayer director personally [18]

 

Full Federal Court

*FCT v Hunger Project Australia – Organisation for relief of hunger found to be a PBI – merely by raising funds and not delivering direct relief [19]

*PTTEP Australasia (Ashmore Cartier) Pty Ltd v FCT – Taxpayer wins appeal on calculation of taxable profit under the PRRT Assessment Act [20]

 

Federal Court

*International Litigation Partners Pte Ltd v FCT – Commissioner denied access to documents in Family Law proceedings [21]

*Re Sisley and FCT – Excess super assessments stand: no special circumstances [22]

 

Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Dempsey and FCT – Taxpayer not an Australian resident for tax purposes [23]

*Re Moignard and FCT – Taxpayer not presently entitled to profit from sale of premises deposited in his account [24]

*Re Power and FCT – Serious hardship claim refused [25]

*Re Huckle and FCT – Serious hardship claim refused [26]

*Re Mack and FCT – Trust distributions through interposed beneficiary a sham – assessments affirmed [27]

*Re Ogden and FCT – Large claims for work-related and investment deductions reduced significantly [28]

*Re Van Gestel and FCT – Alleged identity fraud in BAS: Tribunal has jurisdiction to review [29]

*Re RepairCo and FCT – No deductions for contributions to employee welfare fund – and assessments within time [30]

 

Other Courts & Tribunals

Appeals

*Australian Pipeline Limited as Responsible Entity for the Australian Pipeline Trust v FCT – taxpayer withdraws appeal – entity an ‘associate’ before joining consolidated group [31]

*Blank v FCT (No 2) – taxpayer appealed decision of Edmonds J not to re-open the decision he was assessable on international sums held to be deferred remuneration [32]

*Re Qantas Airways Ltd and FCT – taxpayer appeals adverse car parking FBT assessment decision [33]

*FCT v Resource Capital Fund III LP – taxpayer seeks leave to appeal to the High Court from DTA and valuation decision [34]

*FCT v Darling – Husband has applied for special leave to appeal to the High Court: Commissioner should not have access to Court documents for an audit [35]

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements.

*Fishermen joint venturers not ‘employees’ for super (SGC) purposes: ATO view on AAT case: Re Dominic B Fishing Pty Ltd and FCT [36]

 

Rulings

TR 2014/3 – Income from a ‘permanent establishment’ O/S, represented by substantial equipment, not ‘NANE’ under s23AH unless carrying on business [37]

TR 2014/4 – Effective life of depreciating assets from 1 July 2014 [38]

 

Determinations

*TD 2014/13 – Voting power and the UK DTA [39]

*TD 2014/14 – Deductibility of capital support payments [40]

*TD 2014/15 – R&D: deductibility of design expenditure [41]

*TD 2014/16 – Capital gains: improvement threshold 2014-15 is $40,443 [42]

*TD 2014/17 – Car depreciation limit 2014-15 is $57,466 [43]

*LCTD 2014/2 – Luxury car tax threshold for 2014-15: is $61,884 or $75,375 for a fuel-efficient car [44]

 

Class Rulings & Product Rulings

CR 2014/46 – Capital notes [45]

CR 2014/47-48 – Lifetime care and support scheme; transfer payments [46]

CR 2014/49 – Rugby Union education payments not assessable [47]

CR 2014/50-53 – Return of capital; early retirement schemes [48]

PR 2014/9-11 – Option and loan facility; home buy savings account; timber project [49]

PR 2014/12 – Almond project [50]

 

 

ATO Interpretive Decisions (ATOIDs)

Practice Statements

Draft Practice Statement PS LA 3624 released on Administrative Penalties under s284-75(3) of the TAA1 [51]

 

Tax Alerts

Other ATO news or statements

Project Wickenby: AUSTRAC funds flow analysis 2012-13 [52]

ATO ready to trial external compliance assurance process: ATO Commissioner [53]

Audit improvements from outside the ATO will be adopted more widely in the ATO: Commissioner’s speech [54]

Individuals warned to get work-related deductions right: ATO [55]

*Tax Office website updates – including administrative treatment for abolition of $6,500 write-off which has not yet been repealed [56]

*External compliance assurance process: ATO releases more details [57]

*AUSTRAC releases Circular on ATO Project DO IT (Do it before 19.12.14) [58]

*ATO steps up data mining program to target offshore tax evaders [59]

*Div 7A: private company loans – 2014-15 benchmark interest rate is 5.95% (down from 6.20%) [60]

*GIC and SIC rates for Jul-Sep 2014 quarter are 9.69% and 5.69% respectively [61]

*PAYG instalments – GDP adjustment for 2014–15 is 4% [62]

*2013-14 tax return forms, schedules, and accompanying guides released [63]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

*Tax Laws Amendment (2014 Measures No 1) Bill 2014 receives Royal Assent: (1) limited refunds of overpaid GST [64]

 

Cases (GST)

*Re Dotrac Pty Ltd & Ors and FCT – GST: no enterprise re property development, so input tax credits refused [65]

*Re North Sydney Developments Pty Ltd and FCT – GST: taxpayer’s letter to the ATO was a sufficient s105-55 ‘stop the clock’ notification of ITC entitlement [66]

Re Advent 7 Pty Ltd and FCT – ITC claims denied as they were not substantiated [67]

 

Rulings & Other things (GST)

Fishermen joint venturers not ‘employees’ for super (SGC) purposes: ATO view on AAT case: Re Dominic B Fishing Pty Ltd and FCT [68]

 

SUPERANNUATION DEVELOPMENTS

 

Legislation, Announcements etc. (Super)

 

Cases (Super)

*Re Vuong and FCT – Super accessed early assessable, but penalty remitted [69]

Rulings & Other things (Super)

 

 

CARBON TAX & EMISSIONS REDUCTION FUND

Carbon Tax repeal Acts re-introduced [70]

 

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

The Mining Tax repeal Act re-introduced [71]

 

 

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

ACNC repeal Bill should be passed on recommendation of Senate committee divided along party lines [72]

*ACNC reminders for charities – lodge their 2013 Annual Information Statement by 30.6.14 or risk removal from register and loss of tax exemption [73]

 

 

BOARD OF TAXATION

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

*Transfer pricing report by IGoT released by Minister – ATO management of these issues criticised [74]

ATO risk identification re high wealth individuals can be improved: ANAO [75]

Measuring effectiveness of ATO compliance activities can be improved: ANAO review [76]

*Large business and high wealth individual tax disputes: IGT review [77]

*Administration of the ABR can be improved: ANAO report [78]

ANAO releases report on audit of agencies’ ICT systems to prevent cyber attacks [79]

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

‘Tax (financial) advisers’ may register with the TPB (by notifying) between 1 July 2014 to 31 December 2015 or provide a disclaimer [80]

Registration requirements for tax (financial) advisers – draft regs released [81]

Ayles v Tax Practitioners Board – Court confirms refusal to register – humanities degree not relevant [82]

 

 

STATE TAXES

Legislation & Announcements (State)

ACT: payroll tax and land tax changes: Amendment Bills introduced [83]

NSW Budget 2014-15: abolition of business taxes; WorkCover; first homebuyers [84]

Qld Budget 2014-15: family farm succession planning; home land tax exemption; etc [85]

Tas: Payroll Tax Rebate; First Home Owner Grant: Amendment Bills update [86]

Vic: Budget and Other Measures Bill receives Royal Assent [87]

WA: Revenue Laws Amendment Bill update [88]

WA: Taxation Legislation Amendment Bill 2014 introduced to narrow the definition of ‘fourth limb’ charities – so ‘Chamber of Commerce’ can’t qualify [89]

 

Cases (State)

NSW land tax: Vartuli & Anor v Chief Comr of State Revenue – primary production land tax exemption refused [90]

NSW land tax: Vowles Properties Pty Ltd v Chief Comr of State Revenue – primary production land tax exemption denied [91]

NSW land tax: R&E Drafting Pty Limited v Chief Comr of State Revenue – primary production exemption refused [92]

 

Rulings & Other (State)

Qld: request for Commissioner assessment – Public Ruling updated [93]

Qld payroll tax: 2013-14 annual return available for completion, lodgement and payment by 21 July 2014 [94]

SA stamp duty: off-the-plan concession changes [95]

Vic payroll tax: 2013-14 Annual Reconciliation is available to be lodged and paid by 21 July [96]

 

 

OTHER DEVELOPMENTS

FoFA amendments: Senate committee recommends Bill be passed, but provisions be clarified [97]

FoFA amendments: Govt sets out the way forward [98]

FoFA amendments: Regulation registered to implement time-sensitive changes [99]

*Automatic exchange of tax info re financial accounts: Treasury discussion paper [100]

*ACCC takes action against tax agent travelling to Indigenous communities [101]

 

 

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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