*Board of Taxation to investigate the OECD approach of attributing profit to ‘permanent establishments’ – the ‘functionally separate entity approach’ [BT2]

Tax Month - May 2012

The Assistant Treasurer on Thur 24.5.2012, announced that he had commissioned the Board of Taxation to investigate the impacts of Australia adopting the Authorised OECD Approach in respect of the attribution of profits to permanent establishments. He said the OECD endorsed the “functionally separate entity approach” in 2010, which differs from the method for attribution…

Board of Taxation to review Div 7A – post implementation after summit said it was a ‘thorny’ issue – simplify whilst maintaining integrity? [BT1]

Tax Month - May 2012

The Assistant Treasurer on Fri 18.5.2012, announced that the Government had asked the Board of Taxation to undertake a post-implementation review of Division 7A of Pt III of the ITAA 1936 [which deems certain payments and loans out of private companies to be un-frankable dividends]. Since its introduction in 1997, Div 7A has been subject…

FCT v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund (No 2) – SMSF trustee ordered to pay compound interest for breach of enforceable undertaking [Su5]

Tax Month - May 2012

The Federal Court has on Fri 18.5.2012, ordered the trustee of a self-managed superannuation fund (SMSF) to pay compound interest for breaching an enforceable undertaking under s 262A of the SIS Act. The corporate trustee of the SMSF (Interhealth Energies Pty Ltd) had given an enforceable undertaking to the Commissioner under s 262A of the…

Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 – was passed by the House of Reps [Su1]

Tax Month - May 2012

The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 was passed by the House of Reps on Wed 23.5.2012, without amendment and now moves to the Senate. The Bill contains the 2nd tranche of legislation for the Government’s Stronger Super (MySuper and governance) reforms. [LTN 98, 23/5]

*GSTR 2012/2 – GST and financial assistance payments from Government (replacing GSTR 2000/11) [G3]

Tax Month - May 2012

This Ruling, released on Wed 30.5.2012, explains the Commissioner’s views on when a “financial assistance payment” (which includes: (i) payments made to provide support or aid to the payee; and/or (ii) payments provided to support or aid in the implementation of government policy and initiatives) is consideration for a supply. Where it is established that…

GST ‘financial supply’ provisions: regs amended to treat HP as taxable; extend RITC’s to life insurance etc; modify RITC’s for trustees; clarify guarantees [G2]

Tax Month - May 2012

The A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No 1) was registered on the Federal Register of Legislative Instruments on Tue 29.5.2012. It amends the GST Regulations to implement 4 of the recommendations arising out of Treasury’s review of the GST financial supply provisions. The amendments: treat all components of a…

*GST treatment of taxes, fees and charges: draft regs released, which extend the grandfathered operation of the last Determination until 30 June 2013 [G1]

Tax Month - May 2012

The Assistant Treasurer on Wed 2.5.2012, released draft Regulations for public consultation specifying the GST treatment of certain Australian taxes, fees and charges. The draft regulations and explanatory material are on the Treasury website. The Regulations would provide that certain taxes, fees and charges will either be taxable or GST exempt, consistent with the principles…