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

Board of Taxation – CEO’s update on their September 2018 meeting – small business concessions, FBT compliance cost, tax residency for individuals, Taxation of agriculture, Tax and accounting standards, 2019 meeting dates and locations

Tax Month - October 2018

Overview of current agenda The following is an overview of our current work program, which includes: Review of small business tax concessions; Review Voluntary Tax Transparency Code (the Code) and a broader consideration of tax transparency trends in Australia and globally; Consideration of certain aspects of not-for-profit tax concessions; Further work on tax residency for…

Sub-$50m turnover companies to get their 27.5% rate to reduced to 25.0% five years earlier: 2020/21 instead of $2026/27 – after Labor agrees to support the measure

Tax Month - October 2018

On 11 October 2018, the Prime Minister; Mr Morrison, announced that his Government would introduce legislation during the next session of Parliament, fast-tracking our business tax relief for more than three million businesses that employ nearly seven million Australians. The way this would accelerate savings for both incorporated and unincorporated businesses (with sub-$50m turnover, is…

Aussiegolfa Pty Ltd (Trustee) v CofT – ATO will not appeal its loss on the superannuation ‘sole purpose’ test and will accept its win on the ‘sub-fund’ being the relevant entity for the ‘in-house assets’ 5% cap issue

Tax Month - October 2018

The ATO will not seek special leave to appeal to the High Court from the decision of the Full Federal Court in Aussiegolfa Pty Ltd (Trustee) v CofT [2018] FCAFC 122. This Tax Technical Article relates to the Full Federal Court’s decision. The ATO’s decision not to appeal was revealed in an ASX announcement by…

Sales suppression software – ATO reminds people of the ban, the transitional relief and their audit experience of abuse using this sort of software

Tax Month - October 2018

The law banning ‘sales suppression software tools’ (Suppression Software) became operative on 4 October 2018 and the ATO posted advice about this on its website, the following day. Then, on 10 October 2018, it posted a more ‘breezy’, shorter and more pointed article. (See related Tax Technical article.) It says that “these tools serve no…

PCG 2018/6 – GST: ‘swim between the flags’ guidance on an inbound tour operator (travel agent) acts as an ‘agent’ for the Australian Product Provider (eg. hotel operator) – so their profit is GST-free

Tax Month - October 2018

On Wed 10.10.2018, the ATO issued Practical Compliance Guideline PCG 2018/6 on when compliance resources will not be applied to check whether an inbound tour operator is acting as an agent for GST purposes. This is ‘swim between the flags’ guidance and is finalising the draft PCG 2018/D7 (see related Tax Technical article). This is…

LCR 2018/7 – explains the s26-31 ban on deducting residential rental property travel expenses for other than for companies etc. and other than in carrying on a business

Tax Month - October 2018

On Wed 10.10.2018, the ATO issued Law Companion Ruling LCR 2018/7 on non-business travel costs incurred in relation to residential rental properties. From 1 July 2017, individuals, SMSFs and “private” trusts and partnerships can no longer deduct such costs (s 26-31 ITAA 1997). The ruling provides guidance on the meaning of key terms in s 26-31, and on…

Tax treatment of compensation paid to individuals from financial institutions for faulty advice or improperly charged fees, etc. – Commissioner posts guidance on website (in light of the Hayne Royal Commission into the Financial Services Industry)

Tax Month - October 2018

With the Hayne Royal Commission into the financial services industry in full swing, exposing significant misfeasance in the Banking, insurance, financial advice and superannuation sectors, there is much talk of the compensation being paid or accelerated. With this in mind, on 8 October 2018, the ATO posted an advice page, on its website, about how…

ASIC recommends SMSF policy reforms – Answers to questions on notice to the Parliamentary Joint Committee on Corporations and Financial Services

Tax Month - October 2018

ASIC has put forward a range of policy solutions for self-managed super funds (SMSFs) to be considered by the Parliamentary Joint Committee on Corporations and Financial Services. In response to Questions on Notice following the ASIC Oversight hearing on 17 August 2018, ASIC said the following policy solutions could be considered by the Committee in terms of: Member…

‘Feminine hygiene products’ to be GST-free – consultation on the definition (removing the ‘tampon tax’)

Tax Month - October 2018

On 8 October 2018, Ministers: O’Dwyer (for Women), Hunt (for Health) and Freidenberg (Treasurer) announced the Government is getting on with the job of removing the Goods and Services Tax (GST) on feminine hygiene products, following the State Treasurers approving this change in the GST base. The proposed definition, which includes tampons, pads and cups,…