John Morgan is a tax specialist lawyer of more than three decades experience now practicing at the Victorian Bar - w: www.FJMtax.com e: f.john.morgan@vicbar.com.au

PCG 2018/D8 – ‘swim between the flags’ compliance guidance for related party, inbound, distributors – eg. general distributors: EBIT above 5.5% of sales, motor vehicle distributors: EBIT above 4.3% of sales

Tax Month - November 2018

On 23.11.18, the ATO released Draft Practical Compliance Guideline PCG 2018/D8 – Transfer pricing issues related to inbound distribution arrangements. It outlines the ATO’s intended compliance approach (or the amount of audit attention, they will apply ) to the transfer pricing outcomes associated with the following activities of inbound distributors: distributing goods purchased from related…

‘Black economy’ – further consultation paper released on: further penalties; reverse onus of proof; record keeping for gambling & gifts; penalties for misrepresenting ‘sham’ contracts, ATO law enforcement agency; Freezing Order extension; ATO compel 3rd party info; Federal Courts hear offence matters

Tax Month - November 2018

On 22.11.18, the Assistant Treasurer announced the release of consultation paper released today is another step towards implementing the Government’s response to the recommendations of the Black Economy Taskforce final report. This consultation comes in the context of the review that the Government announced, as part of the 2018-19 Budget, it would conduct, of existing criminal…

Early release of superannuation benefits – further consultation paper issued seeking feedback on 5 measures to widen the grounds (including ‘domestic violence’) and 8 measures to tighten the tests

Tax Month - November 2018

On 21.11.18, the Assistant Treasurer announced the release of a further consultation paper on changes to the early release rules for superannuation.  (This follows Minister O’Dwyer’s announcement in Dec 2017; a consultation paper issued on 20.1.2.17; a victims of crime consultation paper issued on 28 May 2018; and Minister O’Dwyer’s Nov 2018 announcement relating to…

Victims of Family and Domestic Violence will be permitted access to their superannuation early and ATO will be able to share information with the Family Court (about parties’ superannuation)

Tax Month - November 2018

On 20.11.18, Minister for Women: Kelly O’Dwyer announced that the Government move to change the law so that: victims of family violence could get early access to their superannuation money; and it will improve the visibility of super assets in family law proceedings. These measures were included in the broader financial support package for women…

BHP’s Singapore Marketing Hub – ATO & BHP settle long running 2003 – 2018 transfer pricing dispute with additional $529m, ownership lift of Hub to 100% and future transfer pricing in ‘green zone’ for hubs: PCG 2017/1

Tax Month - November 2018

On 19.11.18, both BHP and the ATO announced that they had settled their long-running dispute on the proper tax treatment of the price at which the Australian company sold it’s ore to the Singapore ‘marketing hub’ (in other words, a transfer pricing issue). They key matters disclosed about the settlement, are as follows (remembering that…

OECD releases latest BEPS Action 5 report on preferential regimes and moves to strengthen the level playing field by applying the ‘substantial activity’ requirements to the ‘no or low tax’ jurisdictions

Tax Month - November 2018

On 15/11/2018, the OECD reported international efforts to curb harmful tax practices and prevent the misuse of preferential tax regimes are having a tangible impact worldwide, according to new data it release at that time. The latest progress report, from the 115 nation Inclusive Framework on BEPS, covers the assessment of 53 preferential tax regimes, demonstrating…

J5 Alliance (Australia, Britain, Canada, Netherlands and USA) targets “professional enablers” of international tax fraud – see who advertises; follow (show me) the money

Tax Month - November 2018

On 15.11.18, Reuters reported that Tax enforcement agencies from the United States, Australia and 3 other countries, part of the J5 alliance, are leading a crackdown on “professional enablers” of international tax fraud, the US Internal Revenue Service head of criminal investigations has said. The IRS, via an alliance with Britain, Australia, Canada and the Netherlands…

OECD releases ‘synthesised text’ to give guidance on how relevant clauses of various DTAs would read after being modified by the MLI

Tax Month - November 2018

On 14/11/2018, the OECD posted advice that it continues on the implementation of a landmark treaty to improve the international tax system which now covers 84 jurisdictions and will become effective on 1 January 2019 for the first 47 tax treaties concluded among the 15 jurisdictions that deposited their acceptance or ratification instrument. On the…

5 Year Jail Term for WA Phoenix operator – 2004-2007 historic offending investigated and prosecuted

Tax Month - November 2018

The ATO reported that, on 16 November 2018, a Western Australian business owner: Sung Jae Cho, was sentenced in the District Court of Western Australia, to five years and four months’ jail for fraudulently obtaining more than $890,000 through illegal phoenix activity. He was also ordered to repay the money he stole. Mr Cho was convicted…

Cost establishing trees in carbon sink forests: write off over 14 years – required guidelines for planting updated – best and good practices required

Tax Month - November 2018

On 16 November 2018, the Income Tax Assessment (Environmental and Natural Resource Management in relation to the Establishment of Trees for the purposes of Carbon Sequestration) Guidelines 2018 (made 12.11.18) was registered on the Federal Register of Legislative Instruments today. They have been made under s 40-1010(3) of the ITAA97. Subdivision 40-J of the ITAA97, provides that…