TD 2016/6 – s25-90 deductions available for obtaining a 10% stake in a foreign company but not if acquired through a foreign branch (where income is NANE under s23AH)

The ATO released TD 2016/6 on 13.4.2016 – ruling that interest costs incurred by an Australian resident company, in acquiring foreign source dividend income, through a foreign branch, is not deductible under s25-90 of the Income Tax Assessment Act 1997 (‘ITAA97‘). Section 25-90 allows deductions for losses and outgoings that would not, otherwise, be not…

Tax Month - April 2016

WA landholder duty: Alacer Gold Corp and Hill 51 Pty Ltd and Comr of State Revenue – valuation of mining tenements, reassessment ordered

The WA State Administrative Tribunal has ordered a reassessment of duty on mining tenements based on a dutiable value of $1.14bn. On 8 September 2010, the boards of Avoca Resources Limited and Anatolia Minerals Development Limited announced that they had agreed to enter into a scheme of arrangement under which Anatolia would acquire all of the shares…

Tax Month - April 2016

Re Homeowner 1 & Anor and FCT – private ruling about one section (s118-145) couldn’t be reviewed as applying to another section (118-135) once the taxpayer thought it more relevant

The AAT has held that it lacked the jurisdiction to review a private ruling as the ruling dealt with a different decision to that sought by the taxpayers. In a private ruling application, the taxpayers had sought from the Commissioner that he “confirm taxpayer is within the limits to claim 6 year exemption rule in…

Tax Month - April 2016

Re Zeqaj and FCT – taxpayer failed to show the source of funds for fund purchases of properties and did not discharge his onus to show that the amended assessments were excessive

The AAT has held that a taxpayer had failed the onus of proving that assessments were excessive. The Commissioner audited the taxpayer for the 2006 and 2008-2011 years and determined tax shortfalls of $1.5m, including penalties and interest. Amended s 167 assessments and shortfall penalty assessments were issued. During the audit, the Commissioner formed the opinion…

Tax Month - April 2016

FCT v 4 Doonan Street Collinsville Pty Ltd (in Liq) – test case on Commissioner’s power to set off tax debts owed against tax credits (under the RBA system) for companies in liquidation

In a test case decision handed down on Mon 11.4.2016, concerning a company in liquidation, the NSW Court of Appeal has allowed the Commissioner’s appeal and held that the primary judge had erred in concluding that 4 debits made by the Commissioner were not authorised by Running Balance Accounts (RBA) regime under the TAA. However, the…

Tax Month - April 2016

‘Panama Papers’ prompt call for further measures – German finance minister calls for world networking of company registers and for havens to join the global sharing of tax information starting in 2017

German Finance Minister Wolfgang Schaeuble gave details of a plan on Sunday (11.4.16) to combat tax havens including creating an international network of registers that list the actual owners of companies. A huge leak of documents from the Panama-based law firm Mossack Fonseca has shown how offshore firms are used to stash the wealth of…

Tax Month - April 2016

‘Panama Papers’ – OECD tax administrations (JITSIC) meet in Paris to plan a coordinated approach to this ‘unprecedented’ leak

Government officials from around the world have called on the OECD to convene a special project meeting of  the Joint International Tax Shelter Information and Collaboration (JITSIC) Network to explore possibilities of co-operation and information-sharing, identify tax compliance risks and agree collaborative  action, in light of the “Panama Papers” revelations. The meeting, was held in Paris on 13 April 2016, to bring…

Tax Month - April 2016

Crown Estates (sales) Pty Ltd Crown Estates Pty Ltd as Trustee for Crown Estates unit trust V Commissioner of Taxation – No ‘input tax credits’ for agent purchaser

On 8 April 2016, judgment was handed down by the Federal Court (Logan J) in the matter of Crown Estates (sales) Pty Ltd Crown Estates Pty Ltd as Trustee for Crown Estates unit trust V Commissioner of Taxation [2016] FCA 335.  The appeal was dismissed. Logan J concluded that the taxpayer was not entitled to claim…

Tax Month - April 2016, Uncategorized

WA payroll tax: 1 July 2016 change to threshold – limit increasing from $800k to $850k but tapering less generous

The WA Office of State Revenue (OSR) has reminded taxpayers that from 1 July 2016, the annual payroll tax threshold will change from $800,000 to $850,000. The diminishing threshold will be calculated on annual wages between $850,000 and $7.5m. The tapering value used to calculate the deductable amount will change from 8/67 (0.199) to 17/133 (0.128). The…

Tax Month - April 2016

Lee Group Charters Pty Ltd & Anor v FCT – ‘super yacht’ losses deductible – quarantining rule in s26-47 held not to apply because letting for hire was in the ordinary course of a business

Two taxpayers have been successful before the Federal Court in a matter concerning boating expense claims and the quarantining rule under s 26-47 of the ITAA 1997. The Commissioner concluded that s 26-47 applied to boat chartering activities conducted by the taxpayers and therefore quarantined deductions claimed by the taxpayers that exceeded the respective company’s assessable income…

Tax Month - April 2016