CR 2016/7 & 8 – tax treatment of fishing licence compensation and an early retirement scheme

Tax Month 2016-02

On Wed 3.2.2016, the ATO released the following Class Rulings: CR 2016/7: treatment of compensation payments received under Div 5 of Pt 8 of the Fisheries Act 1995 (Vic) relating to phasing out commercial net fishing in Port Phillip Bay. The Ruling explains the tax treatment of various compensation payments to commercial fishing licensees whose licences…

Re Lau and FCT – Hardship relief denied to taxpayers with substantial assets, failure to report cash income and paying other creditors before the ATO

Tax Month 2016-02

The AAT has affirmed the Commissioner’s decision to refuse to release 2 taxpayers from their tax liabilities, after finding they owned considerable assets and would not suffer serious hardship. The AAT heard that the taxpayers, Ms L and Mr P, had outstanding tax debts of $2.26m and $676,285, respectively, and had a history of failing…

Update on Multi-National Enterprise tax avoidance measures – ‘permanent establishment’ avoidance; thin capitalisation; OECD BEPS measures; and new ‘tax taskforce’

Tax Month 2016-02

Whilst speaking at the Press Club in Canberra, on the importance of ‘free-enterprise, the Assistant Treasurer: the Honourable Kelly O’Dwyer reprised the Government’s actions to deal with avoidance of tax by ‘multi-national enterprises’ and also elaborated about progress in some of those areas. Saying that it was a matter of ‘fairness’, she said the following.…

NFF lobbies against ‘backpackers’ tax – un-legislated 2015 Budget measure imposing minimum 32.5% tax through denying ‘resident’ status

Tax Month 2016-02

The National Farmers’ Federation (NFF), along with its member organisations, on Tuesday 2.2.2016, launched a campaign encouraging the Federal Government not to proceed with the proposed so-called “backpacker tax” which the NFF says will erode the agriculture workforce and the prosperity of regional communities. The campaign has been supported by the Tourism & Transport Forum Australia.…

Thomas v FCT – Taxpayer appeals decision that franking credits and their respective dividends cannot be separated (for tax purposes at least)

Tax Month 2016-02

The taxpayer has appealed to the Full Federal Court against the decision in Thomas v FCT [2015] FCA 968. In that case, the Federal Court held that a discretionary trust could not distribute franking credits to an individual beneficiary differently from the manner in which the net income of the trust was resolved to be distributed. At the same…

Normandy Finance Pty Ltd v FCT – Commissioner appeals against decision that receipts from overseas company were genuine loans not income

Tax Month 2016-02

The Commissioner has appealed to the Full Federal Court against the decision in Normandy Finance Pty Ltd v FCT [2015] FCA 1420. The Federal Court had held that payments of around $4m made from a foreign company to its Australian subsidiary and another related company over several years were genuine loans, and not “shams”. [LTN 19, 1/2/16]

Re Ogden and FCT – Large home office and work-related deduction claims significantly reduced – largely used or consumed by family

Tax Month 2016-02, Uncategorized

A professional sales commission agent has been largely unsuccessful before the AAT in claiming deductions for work-related expenses, including home office expenses, various grocery items and overtime meal allowances. The taxpayer had similar deductions disallowed by the AAT in Re Odgen and FCT [2014] AATA 385 in respect of a different income year. In the current proceedings,…