Implementing the OECD Hybrid Mismatch Rules – draft bill to insert new Div 832 of the ITAA97

On 24 November 2017, Treasury released an exposure draft of legislation to address hybrid mismatch arrangements. The exposure draft legislation seeks to implement the recommendations of the 2015 Organisation for Economic Co-operation and Development (OECD) report – Neutralising the Effects of Hybrid Mismatch Arrangements. Hybrid mismatches exploit differences in the tax treatment of an entity…

FISCHER & ORS v NEMESKE PTY LTD & ORS – Family Trust’s distribution of an amount equal to the ‘asset revaluation reserve’ on certain shares (and not the shares themselves) with the ‘loan back’ booked – was effective

Introduction On April 6th 2016 the High Court handed down a 3-2 majority decision holding, inter alia, that a trustee had validly exercised a power to “advance” and “apply” trust capital, or income, by creating a debt, enforceable at law, that reflected the increase in value of the main asset of the trust, at the…

Settling legal disputes – the income tax, CGT and GST effect on various elements of the settlement amount paid

Tax and settlements Dr Philip Bender, barrister, List A Barristers Introduction This paper looks at the impacts of Federal taxes on litigation settlements. The main areas covered by the paper are: Goods and Services Tax (GST) and settlements; Income tax (including capital gains tax) and settlements; and Superannuation death benefits. GST and settlements In order…

US Major Tax Reform – House of Reps passes Bill as debate moves to the Senate – biggest overhaul of US Code since Regan in 1986 – lower & fewer rates, fewer deductions, exacerbates deficit, drives economy, markets love it, some republican Senators hate it (interesting times…)

The US House of Representatives on 16 November 2017 approved H.R. 1, Tax Cuts and Jobs Act), containing a broad package of tax cuts affecting businesses, individuals and families. Reuters said this has moved Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation. The largely party-line 227-205 vote in…

Singapore-Australia Free Trade Agreement – regulations to determine regional value content and FTA record keeping and duty refunds

The Customs (Singaporean Rules of Origin) Regulations 2017 (SRO Regulations) were registered on Fri 17.11.2017. They prescribe matters relating to the new rules that are required to be prescribed under new Division 1BA of the Customs Act 1901 concerning the Singapore-Australia Free Trade Agreement (SAFTA). The Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Act 2017…

Treasury Laws Amendment (2017 Measures No 2) Regulations 2017 – to streamline the GST ‘tourist refund scheme’ and to exempt the Defence Industry science and technology charity: MITRE from income tax

The Treasury Laws Amendment (2017 Measures No 2) Regulations 2017 was registered on Fri 17.11.2017. It: amended reg 50-50.02 of the Income Tax Assessment Regulations 1997 to prescribe the MITRE Corporation (MITRE) as exempt from income tax and make a number of other minor technical amendments. The Government says this is to encourage MITRE to operate…

Labor’s tax policies to fight international tax avoidance: ‘tax haven’ notice to shareholders; beneficial owners register; whistleblower bounties; CbC excerpts published; tax domicile disclosed for Federal procurement

On Friday 17.11.2017, Shadow Treasurer: Andrew Leigh, spoke on “Halting the [tax] havens” in an address in Adelaide to Australian Petroleum Production & Exploration Association Biennial Taxation & Commercial Conference. It was a wide ranging speech traversing the recent ‘Paradise Papers’ leak and the previous ‘Panama Papers’ leak for the ‘peak’ they gave into multi-national tax planning…

LCG 2015/3 – CbC reporting – Addendum deleted paragraph about exempting entities exempt from tax under Div 50 – Commonwealth and State Entities

The Addendum to LCG 2015/3 (Subdivision 815-E of the ITAA 1997: Country-by-Country reporting), released on 31 October 2017, among other things, deletes para 20.  Paragraph 20 formerly stated: “20. We intend to exempt by legislative instrument exempt entities listed in Division 50 of the ITAA 1997 that are significant global entities from CbC reporting. That is, we…

Collection models for GST on low value imports – Productivity Commissioner report released saying the recently legislated model has limitations and may not work but see how it goes over the next 5 years

Parliament recently legislated to apply GST to low value imported goods from July 2018, using a streamlined collection model that places the responsibility for assessing, collecting and remitting the tax on foreign suppliers. The Productivity Commission has now released a report designed to check that the legislated model is the best available collection model to extend GST…

ATO finalises its position in relation to SMSF event-based reporting – annually in respect of members with less than $1m transfer balance account balances and quarterly for others

The $1.6m transfer balance cap legislation, carries with it an obligation on trustees to submit a ‘Transfer Balance Account Report’ (TBAR) to the ATO about events that impact a member’s transfer balance accounts. This is under s390-5 of the TAA1 and the relevant determination made under that section. (See also Div 294 of the ITAA97 regarding ‘Transfer balance…