T a x  T e c h n i c a l  –  M o n t h l y  N e w s

– March 2017 Developments –

This is a collection of developments in Australian tax law and practice that occurred in March 2017
which aims to be relevant to tax practitioners.[i]

Compiled By

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

Table of Contents

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COMPILING NOW

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ACTS, BILLS AND ANNOUNCEMENTS

Acts, Bills & Draft Legislation

Diverted Profits Tax Bills pass Lower House and move to Senate – 40% tax on profits diverted by ‘significant global entities’ to jurisdiction with less than 80% of our tax rate – nasty dispute resolution features too

Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 – passes the Senate with 6 agreed Govt amendments – passing the Govt’s Corp Tax Cut plan: 27.5% in 2017 (sub-$10m turnover); 2018 (sub-$25m) and 2019 (sub-$50m)

Insolvency reforms (the ‘Innovation Package’) – issue of exposure draft proposing exemption from ‘insolvent trading’ for directors in reasonable restructures and a stay on ‘ipso facto’ clauses (triggered by insolvency)

Announcements

Stapled securities: Treasury issues consultation paper

BASE EROSION & PROFIT SHIFTING (BEPS)

CASES AND APPEALS

High Court

Tech Mahindra Limited v FCT – High Court refused taxpayer’s application to appeal – Full Federal Court decision stands that work performed from Indian PE was taxable in Australia as a ‘know-how’ based ‘royalty’

Full Federal Court

FCT v Normandy Finance and Investments Asia Pty Ltd (No 2) – Full Court: Commissioner awarded only partial costs for “inefficient” running of appeals

Federal Court

Sandini Pty Ltd v FCT CGT: s126-15 breakdown of marriage CGT rollover available for transfer of mining shares from a trust controlled by one former spouse to a trust controlled by the other former spouse under Court order

Administrative Appeals Tribunal (AAT)

Re Walker and FCT – Deductions for travel, accommodation, food not allowed as taxpayer not an itinerant worker

Re Davy and FCT – Work-related travel deductions in excess of actual expenses disallowed – the ‘maximum reasonable amount’ is just an exception from the substantiation amount (and not a license to claim more than incurred)

Re The Study and Prevention of Psychological Diseases Foundation Incorporated and FCT – Revocation of tax exempt status applies from date of original endorsement

Other Courts & Tribunals

DCT v Frangieh (No 3) – Taxpayer fails in claim of conscious maladministration against DCT

Appeals

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

Rulings

Determinations

TD 2017/2-6 – FBT rates and thresholds for 2017-18 FBT year

TD 2017/7 – Freshwater crayfish are trading stock

TD 2017/8 – Cost of travelling to have a tax return prepared is deductible – if unrelated purposes of the travel are appropriately apportioned

Law Companion Guides

Class Rulings & Product Rulings

CR 2017/19-20 – FBT and E-logbook; employment termination payment

ATO Interpretative Decisions

Practice Statements

Practical Compliance Guides

Tax Alerts

Other ATO news or statements

GST DEVELOPMENTS

Legislation & Announcements (GST)

GST-free child care for ‘long day care’ and ‘in-home care’ continues to be GST-free after previous determinations by the Minister replaced by new s38-150(e) determination

Cases (GST)

Trustee for the Whitby Trust and FCT – $2m price of option not added to the $26m paid for the purposes of the ‘margin scheme’ – not ‘consideration for [the] acquisition’ of the real property

Re The Norwestern Trust and FCT – GST: GST shortfall validly assessed (because of fraud or evasion) and no remission allowed for the $279k 75% penalty (for failure to lodge) – 13 reminders and still failed to lodge

Rulings, Etc. (GST)

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

The Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017 – registered

Cases (Super)

Re Mills v FCT – post-Ward’s case but still no “special circumstances” to remit excess super tax – UK pension into another fund, a year later than intended, pushed the $180k contribution over the limit without the fund knowing

Rulings & Other things (Super)

 

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

BOARD OF TAXATION

EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.

Tax Inspector-General announces review of PAYG instalments system

TAX PRACTITIONERS BOARD & LEGISLATION

STATE TAXES

Legislation & Announcements (State)http://taxtechnical.com.au/vic-land-tax-frontlink-pty-ltd-v-comr-of-state-revenue-taxpayers-appeal-dismissed-re-primary-production-exemption-failed-largely-on-failing-to-discharge-onus/

Cases (State)

Vic Land Tax – Lotus Projects Pty Ltd v Commissioner of State Revenue (Vic) Part of development used as golf course not exempt from land tax – reasons bear examination

Vic land tax: Frontlink Pty Ltd v Comr of State Revenue – taxpayer’s appeal dismissed re primary production exemption – failed largely on failing to discharge onus

Rulings & Other (State)

OTHER DEVELOPMENTS


[i]           Sources – abbreviations: ‘ATOlpr’: ATO Legal Professions Relationships emails; ‘IT’: Inteliconnect Tracker (CCH); ‘LCA’: Law Council of Australia; ‘LTN’: Latest Tax News (Thomson Reuters); ‘Sievers’: Chris Sievers’ GST post (www. http://chrissievers.com); ‘TBA’: Tax Bar Association Newsletter; TX: Tax Week (Thomson Reuters); ‘Vine’: The Tax Institute’s Tax Vine.

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