Monthly Archives: February 2016

Re Sandbach and FCT – taxpayer appeals decision that the taxpayer could not use “threatened” losses from proceedings that had ended over a decade ago to reduce his taxable income to nil

The taxpayer has appealed to the Federal Court against the decision in Re Sandbach and FCT [2015] AATA 1024. In the case, the AAT affirmed default assessments (including penalties) issued by the Commissioner, finding that the taxpayer could not use “threatened” losses from proceedings that had ended over a decade ago to reduce his taxable income to nil.…

R&D tax incentive review as part of the ‘Innovation statement’ – issues paper released

Background – The National Innovation and Science Agenda (the Agenda) was launched on 7 December 2015. The Agenda aims to create a more innovative and entrepreneurial Australia. In launching the Agenda the Australian Government committed to undertaking a review of the Research and Development (R&D) Tax Incentive programme. Objective – The Review is identifying opportunities…

Latest OECD BEPS transfer pricing recommendations – Treasury released a consultation paper on adopting these recommendations in Australia

On Thursday 11/2/16, Treasury released a consultation paper on whether Australia should adopt the OECD’s latest transfer pricing recommendations (arrived at as part of its BEPS work). The Treasury release, of the consultation paper, stated the following. Transfer pricing rules are designed to make sure Australia receives an appropriate share of tax from multinational firms.…

Tax Laws Amendment (Norfolk Island CGT Exemption) Bill 2016 – CGT exemption now for all assets acquired before becoming part of Australia (except pre-24.10.15 mainland assets already taxable)

On 11 February 2016, the Government introduced the Tax Laws Amendment (Norfolk Island CGT Exemption) Bill 2016 into the House of Representatives. [APH website] 1.1 This Bill amends the Income Tax (Transitional Provisions) Act 1997 to exempt assets held by Norfolk Island residents before 24 October 2015 from capital gains tax (CGT). 1.2 However, this change…

CR 2016/9 – Qantas employee share schemes – return of capital

Today [Wed 10.2.2016], the ATO issued Class Ruling CR 2016/9 (Qantas Airways Limited – employee share schemes – return of capital). The Class Ruling applies to employees of Qantas Airways Limited and its subsidiaries who have participated in various Qantas employee shares schemes. It outlines the tax consequences to participants of Qantas’ $505m capital reduction and share…

High Court Special Leave Applications – Bywater, ElectNet, and Donoghue

The taxpayers in the following cases all applied for special leave to appeal to the High Court. Bywater Investments Ltd & Ors v FCT [2015] FCAFC 176. The Full Federal Court had dismissed the taxpayers’ appeals from 2 Federal Court decisions that had held the taxpayers were residents of Australia for tax purposes and were liable…

Disputes with the ATO – Commissioner’s ‘service commitment’ – how they will review and attempt to resolve disputes

The ATO has set out its “Service Commitment” to taxpayers in resolving disputes in response to a recommendation made by the Inspector-General of Taxation. In this context, a dispute refers to an objection, a review by the AAT or an appeal to a Court. The ATO said it recognises that when disputes are not managed well, the…

Tax and Superannuation Laws Amendment (2016 Measures No 1) Bill 2016 introduced – GST on imported digital products and cross-border transactions

The Tax and Superannuation Laws Amendment (2016 Measures No 1) Bill 2016 was introduced in the House of Reps on Wed 10.2.2016. It proposes the following amendments: Extending GST to digital products and other imported services – Schedule 1 amends the GST Act to ensure that digital products and other imported services supplied to Australian consumers by foreign entities…