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

Davan Developments Pty Ltd v HLB Mann Judd (SE Qld) Pty Ltd – taxpayer unsuccessful in obtaining damages for alleged negligence by its accountants

A company taxpayer failed to get an order for damages, in negligence (and cognate actions) against its tax agents in the Qld Court of Appeal. In November 2007, the appellant company transferred land for a consideration of $1.6m. For that transaction, the ATO assessed the company as liable to pay GST, income tax and penalties on each of…

2016 Measures No 1 Regulation 2016 – amends GST Regs to treat foreign offered bank accounts and superannuation interests as ‘financial supplies’ and the SIS Regs to allow contributions from ‘earn-outs’

The Tax and Superannuation Laws Amendment (2016 Measures No 1) Regulation 2016 was registered on 15.4.2016. It makes consequential amendments the GST regs and the SIS regs to account for changes to the tax law to be made by the Tax and Superannuation Laws Amendment (2016 Measures No 1) Bill 2016 and already made the Tax and Superannuation Laws Amendment (2015…

PCG 2016/6 – practical guidance on determining the source of hedging gains for the purposes of the cap on ‘Foreign Income Tax Offsets’

On 15.4.2016, the ATO issued Practical Compliance Guideline PCG 2016/6 (Determining source of certain hedging gains for the purposes of s770-75). It sets out the ATO’s compliance approach to working out the source of certain hedging gains for the purposes of calculating the foreign income tax offset limit in s 770-75 of the ITAA 1997. The Guidelines apply…

Seymour v FCT – taxpayers seek leave to appeal the FFC decision that they could not give video evidence from outside Australia

The taxpayers have applied for special leave to appeal to the High Court against the decision in Seymour v FCT [2016] FCAFC 18. The Full Federal Court had by majority (Pagone J dissenting) dismissed a husband and wife taxpayers’ appeal from the 7 April 2015 decision of Buchanan J (in FCT v Seymour [2015] FCA 320) that had set aside an order made by the…

Financial Synergy Holdings Pty Ltd v FCT – Commissioner seeks leave to appeal – FFC decision that pre-CGT deeming did not affect the ‘allocable cost amount’ – $30m amount used instead of $1.5m at 19 September 1985

The Commissioner has applied for special leave to appeal to the High Court against the decision in Financial Synergy Holdings Pty Ltd v FCT [2016] FCAFC 31. The Full Federal Court had unanimously allowed the taxpayer’s appeal from the decision of Pagone J at first instance [2015] FCA 53. The taxpayer had to determine the cost base of an…

PS LA 2016/1 – Transfer pricing adjustments with potential customs implications – adjustments to be allocated to particular goods

The ATO released PS LA 2016/1 on Thur 14.4.2016. It applies from that date and provides guidance to ATO staff when they are proposing transfer pricing adjustments, under Subdiv 815B of the ITAA 1997, involving imported purchases with potential customs implications. The adjustments may have been made in an audit, a settlement, where the entity has objected to an amended…

European Commission announces proposal to require large multi-nationals to publish CbC profit, tax, turnover, number of employees and nature of activities

On 12.4.16 the European Commission announced a proposal to build on the Commission’s work to tackle corporate tax avoidance in Europe, estimated to cost EU countries EUR 50-70 billion a year in lost tax revenues. Supplementing other proposals to introduce sharing of information between tax authorities, it would require multinationals operating in the EU with global…

ATO shares ‘Panama Papers’ with Austrac to better investigate the information and persons of interest

AUSTRAC is an active member of the Serious Financial Crime Taskforce (SFCT), providing actionable financial intelligence and data sharing as well as specialist analytical and intelligence support. The Australian Taxation Office (ATO), as part of the partnership approach embodied by the SFCT, has shared data that they received relating to the ‘Panama Papers’ with AUSTRAC.…

CR 2016/21 & 22 – Flinders University Early Retirement Schemes & PR 2016/3 – Indian Sandalwood Project

On 13.4.2016, the ATO issued: CR 2016/21 – relating to the The Flinders University Academic Staff Early Retirement Scheme 2016 is an early retirement scheme for the purposes of section 83-180 (para 30) of the Income Tax Assessment Act 1997 (‘ITAA97‘); and CR 2016/22 – relating to the Flinders University Professional Staff Early Retirement Scheme 2016 is…

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…