M o r g a n’ s   T a x   M o n t h

– March 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in March 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 and Superannuation Laws Amendment (2014 Measures No 1) Bill 2014 – becomes law [1]

*Social Services and Other Legislation Amendment Bill 2013 amended: charities amendments deleted so 1 January 2014 start date remains [2]

*Australian Charities and Not-for-Profits Commission (ACNC) Repeal Bill introduced but referred to Senate Committee [3]

*Re-stating and centralising special conditions for tax concession entities: draft leg released [4]

Increased rates of excise and customs duty on tobacco products [5]

Increased excise on tobacco – Bills passed [6]

Developing country relief funds declared [7]

Mining tax and associated measures repeal Bill defeated in the Senate [8]

*Protection for relying on announced but un-enacted tax amendments: draft legislation released [9]

Higher education loan program: repayment income and rates [11]

Student Financial Supplement Scheme (SFSS): repayment income and rates [12]

*Tax Laws Amendment (2014 Measures No 1) Bill 2014 introduced: GST excess refunds; farm management deposits [13]

 

Announcements

*Anti-dividend washing legislation – draft released [14]

*Offshore voluntary disclosure initiative – ATO announcement [15]

*‘Statutory remedial power’ being investigated by Treasury, ATO and Private Sector working group – Parliamentary Secretary to the Treasurer [16]

*Tax hurdles for small businesses to be reviewed by the Board of Taxation by 31 August 2014 (in time to feed into the ‘white paper’ on tax reform) [17]

AUSTRAC signs finance intelligence exchange agreement with Vatican City [18]

*Minerals Exploration Development Incentive – Discussion Paper released [19]

*Treasurer will “explore” lowering GST-free import threshold [20]

 

 

CASES AND APPEALS

High Court

 

Full Federal Court

*Chemical Trustee Limited v DCT – Wickenby: taxpayer loses because estoppel, res judicata and abuse of process claims rejected [21]

*Rigoli v FCT – Onus of showing assessments excessive not discharged by accepting FCT’s calculation but for depreciation – remitted back to AAT [22]

*ATS Pacific Pty Ltd v FCT – GST: Supplies to non-resident travel agents fully taxable – no GST-free element for ‘arranging’ services to foreign travel agent [23]

 

Federal Court

Borcherdt v FCT – Disallowance of fuel tax credit claims largely upheld [24]

*FCT v Dowling – Court finds AAT “fell into error” in disregarding excess super contributions under the ‘special circumstances’ provisions in s292-465 [25]

*SPI PowerNet Pty Ltd v FCT – Taxpayer wins claim for deductions for copyright re purchase of Victorian electricity business [26]

 

Federal Circuit Court

 

Administrative Appeals Tribunal (AAT)

Credit for tax withheld and deductions for work-related expenses disallowed [27]

*Re QHVV and FCT – Amended assessment to be amended to correct amount but 75% penalty affirmed for 2008 year with no return [28]

*Re Thomas and DCT – Serious hardship application fails [29]

*Re Executor for the late Joan E Osborne and FCT – No share trading business operated through power of attorney – principal’s intentions relevant [30]

Re Tier Toys Limited and FCT – Denial of R&D offset confirmed [31]

*Re Macoun and FCT – Early retirement pension from World Bank was exempt from tax as was his salary – under the Privileges and Immunities Act [32]

 

Other Courts & Tribunals

*R v Dunn – Wickenby matter: 7 years’ jail for role in $2.6m tax fraud conspiracy – false interest scheme [33]

‘BJ’ and Australian Taxation Office – Access to documents regarding ‘rights to future income rules’ denied under FoI Act – they were deliberative [34]

*DCT v Roget (No 2) – Summary judgment against company director refused because he may have a defense to the ‘DPN’ liability [35]

*R v Milne (No 2) – Wickenby matter: jail sentence varied and taxpayer released on recognizance order [36]

*FCT v Moodie – Commissioner liable for liquidator’s costs in relation to unfair preference claim [37]

*Power v DCT (No 2) – Director fails to re-open previous adverse DPN finding (where DPN called director’s attention to Div 269 as required) [38]

*DCT v Healy – Appeal against 2007 DPN default judgment denied – argument that Administrator appointed within the 14 days rejected [39]

 

Appeals

*Task Technology Pty Ltd v FCT – Taxpayer appeals decision that payments were a ‘royalty’ under Article 12(7) of the Canada-Australia DTA [40]

*Nelson v FCT – taxpayer appeals to Full Federal Court from decision upholding AAT’s finding that activity was preparatory to carrying on business [41]

*Haritos & Anor – Taxpayer appeals to Full Federal Court from decision assessing it on $20m deposited into a bank over a 4 year period as income [42]

*Australian Building Systems Pty Ltd v FCT – Commissioner appeals to the Full Federal Court from a decision that s254 does apply to a liquidator for CGT [43]

Taras Nominees Pty Ltd as Trustee for the Burnley Street Trust v FCT – Taxpayer appeals decision that vesting land in JV trust was a CGT event [44]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

CGT small business relief – daughter was a “puppet director” for her father’s trust, which didn’t have to be grouped with her company: Gutteridge case [45]

*Garnishee notice for horse race winnings because ATO issued it in respect of the wrong taxpayer: ATO Decision Impact Statement (Oops) [46]

Barossa Vines – promoter penalties case – ATO view [47]

 

Rulings

*TR 2014/1 – Commercial software developers: derivation of (pre-paid) income from licence agreements and ‘hosted’ or ‘cloud’ arrangements [48]

*TR 2014/D1 – Tax consequences of employee remuneration trust arrangements – deductible contributions and assessable receipts [49]

TR 2014/D2 – Foreign Income Tax Offset (FITO) limit and hedging transactions – foreign source issues [50]

 

Determinations

TD 2014/2 – Value of goods taken from stock for private use: 2013-14 [51]

*TD 2014/3-6 – FBT rates, thresholds and other amounts for 2014-15 [52]

TD 2014/D8 – Thin cap rules and special purpose securitisation entities [53]

TD 2014/D9 – UK-Australia DTA and the Dividends article [54]

Erratum to TD 2014/1: Dividend access share arrangement – dividend stripping under s177E of Pt IVA? [55]

 

Class Rulings & Product Rulings

CR 2014/24-25 – CGT scrip-for-scrip roll-over; return of capital [56]

CR 2014/26-27 – FBT: gift cards; logbook [57]

PR 2014/4 – Soleir Solar Investment Project 2015 [58]

CR 2014/28-33 – Stapled security; Government payments; executive plan; return of capital; early retirement [59]

 

ATO Interpretive Decisions (ATOIDs)

ATO ID 2014/10 – Franking credits and employee share trusts [60]

 

Practice Statements

PS 2008/5 on private advice, guidance and objections updated by ATO [61]

 

 

Tax Alerts

Other ATO news or statements

*SIC and GIC rates for Apr-Jun 2014 quarter – base rate of 2.63% plus 3 and 7 basis points respectively – so the GIC is 9.63% pa [62]

ATO small business consultation panel – calls for business owners to join [63]

ATO warning – criminals targeting tax practitioners to steal details of their businesses and individual clients [64]

R&D tax incentive registration deadline is 30 April 2014 for standard year balancer’s year ended 30 June 2013 claims – reminder [65]

Parliamentary Committee reports on ATO Annual Report 2012-13 [66]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

Tax Laws Amendment (2014 Measures No 1) Bill 2014 introduced: GST excess refunds (new Div 142 in the GST Act) [67]

*Treasurer will “explore” lowering GST-free import threshold [68]

 

Cases (GST)

*Australia Pacific Pty Ltd & Ors v Building and Construction Industry Authority – GST is part of the ‘cost’ of the project and subject to building training levies [69]

*ATS Pacific Pty Ltd v FCT – GST: Supplies to non-resident travel agents fully taxable – no GST-free element for ‘arranging’ services to foreign travel agent [70]

*Re RV Investments (Aust) Pty Ltd and FCT – Challenge to GST assessments partly successful – whether ‘creditable acquisitions’ and ‘only’ 50% penalty [71]

 

Rulings & Other things (GST)

Tax Office website updates – GST and property [72]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

Defined benefit contributions for Div 293 tax purposes: draft regs released [73]

 

Cases (Super)

 

Rulings & Other things (Super)

ASIC fines SMSF administrator for “free SMSF” set up claims [74]

*Register of electronic messaging services, whom SMSFs can use to receive electronic messages and payment by 1 July 2014 – Tax Office website update [75]

 

 

CARBON TAX & EMISSIONS REDUCTION FUND

Climate Change Authority (Abolition) Bill defeated in the Senate [76]

Clean Energy Finance Corporation – Bill to abolish it introduced [77]

*Carbon tax repeal Bills defeated in the Senate [78]

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

*Mining tax and associated measures repeal Bill defeated in the Senate [79]

Mining tax: nil rate determination and lodgment exemption – Legislative Instrument [80]

More time given to lodge 2014 mining tax return [81]

 

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

*Australian Charities and Not-for-Profits Commission Repeal Bill 2014 introduced [82]

Charities and measuring red tape: ACNC online survey [83]

*Social Services and Other Legislation Amendment Bill 2013 amended: charities amendments deleted so 1 January 2014 start date remains [84]

Re-stating and centralising special conditions for tax concession entities: draft legislation released [85]

 

BOARD OF TAXATION

*Div 7A review second discussion paper: Board of Taxation [86]

*Debt/equity tax rules discussion paper: Board of Taxation [87]

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

 

TAX PRACTITIONERS BOARD & LEGISLATION

Re Burnett and Tax Practitioners Board – Decision not to renew tax agent registration stayed [88]

Re Grosfeld and Tax Practitioners Board – Tax agent’s registration not renewed: not “fit and proper” person [89]

Re Ayles and Tax Practitioners Board – Tax agent registration refused; humanities degree (religious emphasis) not relevant to tax agent services [90]

TPB issues consultation documents on what is a ‘tax (financial) advice service’? and on the CPE and PI requirements for such services [91]

AFS licensees can become registered as a ‘tax (financial) adviser’ by notification to the TPB [92]

Confidentiality of client information: TPB draft information sheet [93]

 

STATE TAXES

Legislation & Announcements (State)

ACT: Duties (Commercial Leases) Amendment Bill introduced [94]

NSW payroll tax: rebate under Fresh Start Support: Bill introduced [95]

NSW: State Revenue Legislation Amendment Bill – update on amendments to Duties Act and land taxes [96]

 

Cases (State)

NSW land tax: De Re & Anor v Chief Comr of State Revenue – primary production exemption denied [97]

NSW stamp duty – LR Corrie Glen Pty Ltd v Chief Comr of State Revenue: Document stamped as a declaration of trust [98]

 

Rulings & Other (State)

ACT payroll tax: exemptions for employment agents – Revenue Circular updated [99]

NSW payroll tax: rebate to encourage hire of retrenched employees [100]

NSW land tax: Neal v Chief Comr of State Revenue – PPR exemption wrongly claimed – 75% penalty tax for “intentional disregard” affirmed [101]

Qld stamp duty: exemption for vestings of land; vehicle registration – Public Rulings [102]

 

OTHER DEVELOPMENTS

Transfer pricing and country-by-country reporting: OECD publishes comments received [103]

OECD paper on transfer pricing comparability data for developing countries – released for comment [104]

OECD BEPS Action Plan: Discussion Document released on Preventing Treaty Abuse [105]

OECD BEPS Action Plan: 2 new drafts released for comment [106]

Tax challenges of the digital economy: OECD draft discussion paper [107]

*Official interest rates left on hold at 2.5% [108]

Pensions to increase from 20 March [109]

*Unexplained Wealth Amendment Bill introduced [110]

Farm Household Support Bills introduced – income tested but assets test enough to allow for their farm [111]

Public infrastructure: Draft Productivity Commission report released [112]

Rio Tinto publishes details of its global tax payments [113]

FoFA streamlining Bill introduced [114]

FoFA amendments welcomed by FPA; SPAA positive on best interests duty amendments [115]

FOFA changes ‘paused’ by Senator Cormann [116]

Repeal of obsolete Legislation Bills introduced [117]

Paid Parental Leave Amendment Bill introduced [118]

Personal Property Securities Amendment Bill introduced – to minimise the need for registrations in respect of leases of a term of less than 12 months [119]

*Assistant Treasurer Sinodinos steps aside [120]

Shift FBT from employers to employees, says Institute of Public Accountants [121]

Financial System Inquiry – International Advisory Panel members announced [122]

Seniors Health Card indexation: Bill introduced [123]

 

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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