Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Act 2018 – new s26-105 denies deductions for wages etc. with no PAYG deducted; new reporting for “road freight”, “IT” or “security, investigation or surveillance” services

The Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018 and Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018 were both passed the Senate on 15.11.2018 and received Royal Assent, on 29.11.2018, as Acts No. 141 & 137 of 2018, respectively. The Black Economy Taskforce (No 2) Bill will: amend the ITAA97…

Mendonca v Tax Practitioners Board – Board infected its decision not to investigate complaints about 2 tax agents with ‘jurisdictional error’ – behaviour outside ‘tax agent services’ relevant to ‘fit and proper person’ test

On 7 November 2018, the Federal Court ordered that a decision of the Tax Practitioners Board (Board), to not investigate Mr Mendonca’s complaint, against the registration of two tax agents, was affected by ‘jurisdictional error’ and ordered that the decision be quashed. The Board conceded this and undertook, to the Court, revisit the complaint and…

GST fraud – Perth stockbroker extradited from US and sentenced to 5 years jail for $528,000 of fraudulent ‘input tax credit’ claims after decade-long investigation

The ATO reported that on 14 November 2018, a Perth stockbroker was sentenced to five years’ jail, for committing large-scale tax fraud, while living in the United States more than a decade ago. Gary Parsons, 53, was extradited from the US, in 2017, following a decade-long joint investigation by the Australian Taxation Office (ATO) and Australian Federal…

Government to support Small Business access to funding – Treasurer announces $2b to seed ‘securitisation’ of SME loans and a ‘Fund’ to provide patient capital for growth

On Wednesday 14 November 2-018, the Treasurer and Minister for Small Business issued a joint Media Release announcing 2 measures to assist small and medium enterprises (SMEs) get loan and equity funding. They are: To establish the ‘Australian Business Securitisation Fund’ with $2b of Federal funds. To establishment of an ‘Australian Business Growth Fund’ that would…

Douglass v CofT – Taxpayer appeals AAT decision that that the PSI rules to fully assess him on the remuneration for his work – despite being derived by a partnership with his wife

The taxpayer has appealed to the Federal Court against the decision in Douglass v CofT [2008] AATA 3729. The AAT had ruled that income received for engineering services was subject to the personal services income (PSI) rules, as the partnership business did not pass the “results test” in s87-18 of the ITAA97 (ie principally that at…

Employee Share Schemes (ESS) – Treasurer proposes the $5k tax free salary sacrifice limit be doubled to $10k and an extension of the Div 83A ESS tax regime to ‘contribution plans’

The Treasurer and Minister for Small Business made a joint announcement on 13 November 2018 that the Government was proposing to improve the ’employee share scheme’ (ESS) regime in a number of ways (referring primarily to the taxation regime in Div 83A in the ITAA97). The most important part of the announcement was that the…

Caratti v CofT – Taxpayers fail to get orders restraining the Commissioner from commencing recovery action – because taxpayers breached deed by not producing security in time

Two taxpayers (Caratti & Bazzo) have failed to convince the Federal Court that it should make orders preventing the Commissioner taking recovery action while their challenge to the tax assessments remained on foot. The taxpayers argued that the ATO was bound by the terms of a deed agreed by the parties under which the ATO…

DCT v Doyle – Taxpayer fails to stay recovery of $14m tax debt – merits of objections unclear and no extreme hardship (no defence as tax debts ‘conclusively payable under tax law)

A taxpayer has been unsuccessful in seeking a stay of proceedings brought by the ATO to recover a $14m tax liability pending a determination of the objections to the assessments. The facts were these. The taxpayer did not lodge income tax returns for the years ending 30 June 2008 to 30 June 2010 as she contended that she was…

Vic payroll tax: Nationwide Towing & Transport Pty Ltd v Comr of State Revenue – no payroll tax on payments to subcontractors, to provide ‘roadside assistance’ to stranded RACV members under the ‘relevant contractor’ provisions

The Victorian Supreme Court has held that payments, for ‘roadside assistance’, that RACV contracted out, to the Taxpayer, which it then subcontracted, were not subject to payroll tax, under the ‘relevant contractor’ provisions. In summary, the facts were these: The Royal Automobile Club of Victoria (RACV) provided ‘roadside assistance’ to its Roadside Members – with varying…

Ham v Tax Practitioners Board – The Court agreed with the AAT and TPB that it was correct not to re-register the former tax agent – not a ‘fit and proper person’ because of ‘actual dishonesty’ to a long standing client and friend, without remorse

The Federal Court has dismissed an applicant’s appeal against a decision to deny his tax agent registration renewal application on the basis that he was not a fit and proper person. The Applicant/Appellant/Former Tax Agent had been involved in legal action, in which equitable fraud was found to have occurred. The facts are recited at…