Diverted Profits Tax Bills receive Royal Assent and become Australian Act No. 27 – 40% tax on diverted profits; 30% franking; pay tax to object; 12 months to supply documents in defense; limited rights of appeal

Tax Month - April 2017

The following Bills aimed at preventing multinationals from shifting profits offshore received Royal Assent on 4 April 2017 and became Act No 27 & 21 of 2017 (respectively). Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017– Act No 27 of 2017. Provides for a diverted profits tax to apply from 1 July 2017 to ensure that significant global…

Australian ‘Diverted Profits Tax’ – key portions of Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 – (Act No. 27 of 2017)

Tax Articles

Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 – (Act No. 27 of 2017)   – which includes the so called ‘Diverted Profits Tax‘   These provisions come into effect, broadly from 1 July 2017, in accordance with Item 52 of Schedule 1 to the Bill – set out below. 52  Application The amendments…

Vic land tax: Frontlink Pty Ltd v Comr of State Revenue – taxpayer’s appeal dismissed re primary production exemption – failed largely on failing to discharge onus

Tax Month - March 2017

A taxpayer has been unsuccessful in its appeal to the Victorian Supreme Court, from a decision of the Victorian Civil and Administrative Tribunal, which ruled that it was not entitled to the primary production land tax exemption for various properties over a number of years. The taxpayer was a land developer and lessor of land.…

Re The Study and Prevention of Psychological Diseases Foundation Incorporated and FCT – Revocation of tax exempt status applies from date of original endorsement

Tax Month - March 2017

In Study and Prevention of Psychological Diseases Foundation v FCT [2015] FCA 1117, the Federal Court remitted this matter back to the AAT, to determine the date from which the taxpayer’s tax exempt endorsement as a charity should be revoked. On being remitted, the AAT has now determined that the revocation should apply from 1 January 2005,…

Treasury Laws Amendment (2017 Enterprise Incentives (No 1) Bill 2017 introduced – adding a ‘similar’ business test for carry forward of tax losses and to allow self-assessed ‘effective life’ depreciation of intangible assets

Tax Month - April 2017

The Treasury Laws Amendment (2017 Enterprise Incentives No 1) Bill 2017 was introduced into the House of Reps on Thursday 30.3.2017, to amend the tax law to: supplement the same business test with a more flexible similar business test to improves access to losses for companies (and certain trusts) that have changed ownership so as to allow…

DCT v Frangieh (No 3) – Taxpayer fails in claim of conscious maladministration against DCT

Tax Month - March 2017

A taxpayer, whose assessment for the year ended 30 June 2007  was amended in 2014 to include unexplained deposits of $3.5m following an audit, has been unsuccessful in his action against the Commissioner for misfeasance in public office, abuse of process and breach of duty of good faith (ie “conscious maladministration”). Instead, the NSW Supreme Court found that the…

Re Davy and FCT – Work-related travel deductions in excess of actual expenses disallowed – the ‘maximum reasonable amount’ is just an exception from the substantiation amount (and not a license to claim more than incurred)

Tax Month - March 2017

A taxpayer’s claim for work-related travel deductions in excess of the amounts he incurred has been unsuccessful. The taxpayer was an employee truck driver who was required to be away from home on most working days. He claimed work-related travel expense deductions for the 2011 and 2012 income years totalling just over $42,000. The deductions…

TD 2017/8 – Cost of travelling to have a tax return prepared is deductible – if unrelated purposes of the travel are appropriately apportioned

Tax Month - March 2017

The Commissioner issued this Determination on Wed 29.3.2017, ruling that the cost of travelling to have a tax return prepared by a “recognised tax adviser” is deductible under s25-5 of the ITAA 1997. However, to the extent that the travel relates to another non-incidental purpose the expenditure must be apportioned. The Determination contains a number…