Monthly Archives: September 2016

TA 2016/11 –defeat the MAAL (s177DA) by inserting a partnership with an Australian minority partner (an ‘Australian entity’) as the distributor with the old foreign supplier as its agent (no change in operations)

On 15.9.16 the ATO issued a further Tax Alert: TA 2016/11 about arrangements is concerned will be ineffective to defeat the Multinational Anti-Avoidance Law (MAAL) in s177DA of the Income Tax Assessment Act 1936 (ITAA36). This is the third TA on MAAL avoidance this year, after TA 2016/2 about foreign and Australian entities swapping roles…

TA 2016/10 – Cross Border ‘Round Robin’ Financing Arrangements – funding an overseas entity which (indirectly) returns the funds with ‘debt deductions’

We are reviewing cross-border round robin type arrangements that involve funding of an overseas entity or operations by an Australian entity, where the funds are subsequently provided back to the Australian entity or its Australian associate in a manner, which purportedly generates Australian tax deductions while not generating corresponding Australian assessable income. One example of…

Taxation and Related Legislation (Miscellaneous Amendments) Bill 2016 – amendments to Payroll Tax (owner drivers); Duties (vesting of dutiable property); and Land Tax (nil thresholds for clubs etc.)

The Taxation and Related Legislation (Miscellaneous Amendments) Bill 2016 (Tas) on Wed 14.9.2016, passed the Tasmanian House of Assembly without amendment and now moves to the Legislative Council. It proposes to amend the following Tasmanian Acts: the Payroll Tax Act 2008; the Duties Act 2001; the Land Tax Act 2000; the First Home Owner Grant…

Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016 introduced – Statutory Remedial Power; Averaging; Luxury Car Tax

The Assistant Treasurer introduced the Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016 in the House of Reps on Wed 14.9.2016. It contains the following amendments: REMEDIAL POWER: proposes to establish a Remedial Power for the Commissioner of Taxation to allow for a more timely resolution of certain unforeseen or unintended outcomes…

Hudson v FCT – Taxpayer loses appeal against conviction for failing to lodge returns

The Supreme Court of South Australia has dismissed a taxpayer’s appeal against his conviction for failing to lodge income tax returns for the years ending 30 June 2003 to 30 June 2011 inclusive. The taxpayer had been provided with a Final Notice to lodge the returns and, on failing to do so, a Magistrate’s Court subsequently found that the…

Interest penalty rates for 1 October to 31 December 2016 – GIC: 8.75% and SIC: 4.76% (with summary of when they apply)

The ATO has advised that the general interest charge (GIC) rate, shortfall interest charge (SIC) and related rates, for the second quarter of the 2016-17 income tax year (1 October 2016 to 31 December 2016) is as follows: GIC rate is 8.76% ie 90 day BAB rate 1.76% + 7% uplift factor. GIC daily compounding rate is 0.02393443%. SIC…

Vic land tax: Vasiliades v Comr of State Revenue – PPR exemption refused – no jurisdictional error in assessing in and then reassessments

On Fri 9.9.2016, the Victorian Supreme Court held there was no jurisdictional error by the Commissioner in issuing land tax reassessments for the 2009 to 2011 assessments years. The taxpayer sought judicial review of assessments made by the Commissioner for land tax payable by her in respect of a property for the 2009, 2010 and…

Qld land tax: Vikpro Pty Ltd v Wyuna Court Pty Ltd –prohibition on landlords passing land tax on to lessees did not survive 2009 & 2010 amendments

In a majority decision (Philippides JA dissenting), the Qld Court of Appeal affirmed that an appellant (lessee) was liable to pay land tax pursuant to a lease. The appellant was the lessee, and the respondent the lessor, under a sub-lease of a property entered in August  2006 for a 70 year term. Clause 11.2 of the head lease required the lessee to pay…

Irish Government wins strong backing from its Parliament for EU Apple appeal

Ireland’s Government has won strong backing from the Irish Parliament for its appeal against a €13-billion back tax bill the European Commission ordered it to collect from Apple, following 12 hours of debate on 7 September. Reuters said Ireland’s fragile coalition overcame initial misgivings from independent members of cabinet to join Apple in fighting the…

Re DTMP and FCT – taxpayer’s late request for an expansion of her grounds of appeal denied for the primary tax because FCT prejudice (would have assessed others) but allowed for penalties (no prejudice)

Re DTMP and FCT – Grounds expansion requests: primary tax denied, but penalty allowed A taxpayer has been largely unsuccessful before the AAT in seeking to expand her grounds of objection against income tax assessments and associated penalties. The taxpayer was issued with an amended income tax assessment within time allowed by s 170(1) of the…