Monthly Archives: October 2017

Superannuation Accountability Measures 1 & 2 Bills and Strengthening Trustee Arrangements Bill – Senate committee reports recommend they be passed – including the 1/3rd independent directors and chairman requirement

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 2) Bill 2017 has passed the House of Reps without amendment. It proposes the following amendments to the Superannuation Guarantee (Administration) Act 1992 (SGAA): salary sacrifice integrity – employers will be prevented from using an employee’s salary sacrifice contributions to reduce the…

Black economy – draft legislation to ban ‘sales suppression technology’ and extending the ‘Taxable Payment Reporting System’ to the cleaning and courier industries

In December 2016, the Black Economy Taskforce was established to develop a whole-of government policy framework involving new proposals to tackle black economy activity. In the 2017-18 Budget, the Government responded to the Black Economy Taskforce’s Interim Report by announcing the following measures to address the growing economic and social problem of the black economy:…

Thomas v CofT – High Court gives Commissioner leave to appeal adverse franking credit streaming decision – based on Qld Supreme Court declaration of beneficiaries’ rights

The High Court has granted the Commissioner leave to appeal the decision of the Full Federal Court in Thomas & Anor v CofT [2017] FCAFC 57. The case involved franking credit streaming and the Full Federal Court had unanimously allowed the taxpayers’ appeals against the August 2015 decision of Greenwood J in Thomas v CofT [2015] FCA 968 and…

Moignard and C of T – Taxpayer beneficiary assessable to only 1/3rd of the trust’s property profit under default beneficiary’ clause argument

The AAT has accepted the Commissioner’s changed position on the “present entitlement” of a taxpayer beneficiary and reduced tax assessments and penalty issued to him. The case concerned the 2007-08 financial year and, substantively, concerned whether the taxpayer was “presently entitled” to certain trust income during that year. The taxpayer was a winemaker who used…

Treasury Laws Amendment (Whistleblowers) Bill 2017 – Exposure Draft for consultation – uniform provisions under the Corporations Act and parallel taxation related provisions

On 23 October 2017, the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, today released for public consultation exposure draft legislation – the Treasury Laws Amendment (Whistleblowers) Bill 2017 and explanatory material. The Minister says: these reforms will, for the first time, create a single whistleblower protection regime, in the Corporations Act,…

NSW payroll tax: JP Property Services Pty Limited v Chief Comr of State Revenue – no payroll tax on payments under cleaning subcontractor agreements as they were not ’employment agency contracts’ under the purposive interpretation accepted by earlier Court decisions

In a lengthy decision, the NSW Supreme Court has allowed a taxpayer’s appeal and revoked payroll tax assessments concerning out of hours cleaning services provided to supermarkets and other businesses. The taxpayer (JP) provided contract cleaning and property maintenance services to commercial and industrial clients, including supermarkets operated by Franklins Pty Ltd. To provide those…

Keris Pty Ltd (Trustee) v DCT – Security deposit notice for estimated ‘future’ GST held to be valid even though the subdivision had not gone ahead, the sales had not occurred and the margin scheme might affect the amount of GST

The Full Federal Court has dismissed a taxpayer company’s appeal (from [2015] FCA 1381) and held that the Commissioner’s notice to the company to give security for an unpaid GST liability was constitutional and valid. In September 2014, the Commissioner gave a notice under s255-105 of Sch 1 to the TAA to the taxpayer requiring it to give…

BEPS Action 5 implementation sees governments rapidly dismantling harmful tax incentives worldwide: OECD

16/10/2017 – Governments have dismantled, or are in the process of amending, nearly 100 preferential tax regimes as part of the OECD/G20 BEPS standards to improve the international tax framework, according to a progress report released today. The report provides details on the outcome of peer reviews undertaken of 164 preferential tax regimes identified amongst the…

TD 2017/21 and TD 2017/22 – Foreign equity distributions to corporate partners and corporate beneficiaries for the purposes of establishing a 10% ‘participation interest’ under Subdiv 768-A

On Wed 18.10.2017, the Commissioner issued 2 Taxation Determinations on the application of the foreign equity distribution rules in Subdiv 768-A of the ITAA 1997 where the recipient is a corporate partner in a partnership or a corporate beneficiary of a trust. Under Subdiv 768-A, a foreign equity distribution is treated as NANE income if the…

TR 2017/D8 – Tax treatment of long-term construction contracts – Accruals basis or estimated profits basis (AASB 15) – IT 2450 and related determinations replaced

The Commissioner issued draft Ruling TR 2017/D8 on Wed 18.10.2017. It  explains the methods taxpayers can use to return income derived, and recognise expenses incurred, in long-term construction projects (ie those straddling 2 or more income years). The ATO describes TR 2017/D8 as a “refresh” of the former ruling on this matter, IT 2450. The Draft…