Stapled structures & other measures: revised draft legislation released – extending measures to agricultural land, changing Thin Cap laws on MIT Staples, limiting foreign super and government concessions, leaving MIT concessions for ‘affordable housing’

Tax Month - July 2018

On Friday 27 July 2018, Treasury released, for public consultation, the second stage of draft legislation, giving effect to the measures announced on 27 March 2018 that seek to address risks to the corporate tax base, posed by: stapled structures and similar arrangements, as the law currently stands, and limiting access to concessions currently available to foreign…

MSAUS v CofT – ATO explains why it didn’t appeal an AAT decision on the effectiveness of a GST clause (to apply the ‘margin scheme’) which contradicts the Full Federal Court conclusion on the same clause in the South Steyne case

Tax Month - July 2018

On 26 July 2018, the ATO issued a draft Decision Impact Statement (DIS) on the GST case: MSAUS Pty Ltd v. Commissioner of Taxation [2017] AATA 1408, which defied earlier cases on sale of apartments in the same block, but the Commissioner chose not to appeal. The background facts and GST decisions (common to all the…

TZSX v CofT – AAT upholds Commissioner’s decision to not issue a further ‘departure authorisation certificate’ – security offered was too little and uncertain compared with the $33m tax debt (in dispute)

Tax Month - July 2018

The AAT has refused a taxpayer’s application for review of the Commissioner’s decision not to issue an extension of a departure authorisation certificate (DAC). On 21 September 2017, the Commissioner issued amended assessments to the taxpayer for the income year ended 30 June 2007 totalling $33.33 million. The Commissioner assessed the tax liability based on the transfer of US$21…

Hampshire Assets and Services v Blackman: tax advice alleged to be ‘misleading or deceptive’ – case against accountant fails as he was entitled to rely on 3rd party expert advice

Tax Month - February 2018

The NSW Supreme Court has dismissed proceedings brought by a plaintiff against an accounting partnership for alleged misleading advice on the tax consequences of entering into an option deed. The facts were as follows. The Court said Mr Peter Hall was beneficially the sole shareholder of Hampshire Assets and Services Pty Ltd (Hampshire), and its…

Europeans press for digital tax turnover tax, at the July Buenos Aires G20 meeting, as an interim measure – Australian Treasurer not moved by ‘digital advertising sales tax’ approach

Tax Month - July 2018

BUENOS AIRES (Reuters) – European finance leaders called for progress on global rules to tax the digital economy at a meeting of G20 finance ministers and central bankers in Argentina on Sunday 22 July 2018, putting them at odds with US counterparts. The final communique reaffirmed a commitment to address the impacts of the shift to a…

Productivity Commission findings on SMSF costs and minimum $1m size are “flawed” – according to the SMSF Association

Tax Month - July 2018

The SMSF Association put out a media release, on 25 July 2018, tackling the Productivity Commission’s draft findings, about the cost effectiveness of self-managed super funds (SMSFs). It says the Commission uses evidence that is “fundamentally flawed” and does not consider broader motivations on why individuals set up SMSFs. “Factors such as data problems, investment…

Inbound supply chain (ICS) strategy to counter ‘transfer pricing risk’ – starting with 4 industries and developing a PCG

Tax Month - July 2018

On 15 December 2017, the ATO released the report, Tax and Corporate Australia. This report identified that there is a key compliance risk associated with the transfer pricing of inbound supply chain (ISC) arrangements. The report questions whether appropriate profit is being recognised in Australia where goods or services are being purchased from a related party and…

Top 1000 Tax Performance Program (streamlined assurance reviews): timing set to minimise duplication of effort – particularly when APAs are in place or being negotiated

Tax Month - July 2018

Large public and multinational groups with turnover above $250 million comprise what the ATO calls the ‘Top 1000’ and it has a ‘performance program’ to review the income tax affairs of those that that they do not engage with through pre-lodgment compliance reviews or annual compliance arrangements. On 23 July 2018, the ATO uploaded a…

Draft Property and Construction Website Guidance – ATO identifies the factors it looks at for capital v’s revenue account treatment and seeks feedback

Tax Month - July 2018

On Monday 9 July 2018, the ATO uploaded a Draft Paper providing outlines of real cases and decisions being made by the ATO in property developer cases. The Paper is intended to provide a transparent view into the decisions we are making on fact driven cases where a more technical product is not suited. The…

TD 2018/14 – Div 7A ‘benchmark’ interest rate for 2018-19 is 5.2% (down from 5.3% last year) – to avoid loans to shareholders/associates being deemed dividends

Tax Month - July 2018

On Wed 25.8.18, the ATO issued Taxation Determination TD 2018/14, confirming that the Div 7A benchmark interest rate is 5.20% for the 2018-19 income year (down from 5.30% for 2017-18). The ‘benchmark’ rate is used as a minimum amount, that a company must charge, on a loan to a shareholder or their associate, to put the…