Resource project realignment and farm-out: exposure draft legislation released [1]

In the 2013-14 Budget proposal limiting the immediate deductibility of expenditure on mining rights and mining information, there was a provision that the measure did not prevent the immediate deductibility of mining rights acquired under a “farm-in, farm-out” arrangement (the partial exchange of a tenement interest in exchange for the farmee providing exploration services as…

Re GSLL & Ors and FCT – 75% administrative penalties affirmed for failing to lodge FBT returns – failing to remit did not produce an unjust result

The AAT has confirmed that 3 companies, that were in effect owned and controlled by one director, were liable to FBT and 75% administrative penalties over a 4-year period for failing to lodge FBT returns in relation to several luxury cars. The penalties amounted to over $250,000. The resulted in an overall liability of over…

OECD tax statistics – various taxes as a percentage of GDP and of other taxes, together with their growth or contraction

The 2016 edition of the OECD’s annual Revenue Statistics publication shows that the OECD average tax-to-GDP ratio rose slightly in 2015, to 34.3%, compared to 34.2% in 2014. This is the highest level since the Revenue Statistics series began in 1965. An increase in tax-to-GDP levels was seen in 25 of the 32 OECD countries that provided preliminary data…

Treasury Laws Amendment (2016 Measures No. 1) Bill 2016 introduced – amend Corporations Act so ‘start up’ employee share scheme ‘prospectus’ doesn’t have to be made public and amend ITAA97 for 6 new DGR’s

This Bill was introduced into Parliament on 1 December 2016 and amends (amongst other things): The Corporations Act 2001 to provide that employee share scheme disclosure documents lodged with the Australian Securities and Investments Commission are not made publicly available for certain start-up companies; and The Income Tax Assessment Act 1997 to update the list…

Diverted Profits Tax draft – $1b global, $25m local turnover taxpayers; 40% tax (30% franking) on profits diverted to sub-24% zone, if insufficient economic substance; pay 21 days; 12 month review; appeal limited to disclosed documents

On 29 November 2016, the Government released draft legislation for comment to implement its proposed Diverted Profits Tax (DPT), which was announced in the 2016-17 Federal Budget. It proposes to enable the Commissioner to impose a penalty tax rate of 40% on profits diverted in breach of the rules – that is: on profits that…

DCT v Peter Sleiman Investments Pty Ltd – Winding up order granted to DCT despite Part IVC appeal proceedings not being resolved – trustee declared it held its properties for unit trusts perhaps defrauding creditors (ATO)

The NSW Supreme Court has ordered that a company with a significant tax debt be wound up. PSI Pty Ltd was the trustee of a discretionary family trust (SFT). The primary beneficiary of the trust was PS (also the appointor). In July 2014, the DCT obtained a default judgment against the Trustee (PSI) for income tax assessed…

TD 2016/D5 – A ‘non-resident trust’ can ignore capital gains under Div 855 but beneficiaries can’t escape s99B assessment if those amounts are paid to them when they are ‘resident’

The Commissioner issued this draft determination on Wed 30 Sept 2017. The draft determination asks: where an amount included in a beneficiary’s assessable income under subsection 99B(1) of the Income Tax Assessment Act 1936 (ITAA 1936) had its origins in a capital gain from non-taxable Australian property of a foreign trust, can the beneficiary offset…

TD 2016/D4 – Commissioner proposes to rule that ‘foreign trusts’ do ‘disregard’ capital gains under s855-10, despite s95(1) directing trusts to calculate their tax law ‘net income’ as if they were a resident

The Commissioner issued this draft determination on Wed 30 Sept 2017. The draft determination asks: does the residency assumption in the definition of the tax law definition of ‘net income’ (in s95(1) of the Income Tax Assessment Act 1936) apply for the purpose of s855-10 of the Income Tax Assessment Act 1997), which disregards certain…