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

Tax Month - April 2016

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…

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

Tax Month - April 2016

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…

‘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

Tax Month - April 2016

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…

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

Tax Month - April 2016

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…

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

Tax Month - April 2016, Uncategorized

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…

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

Tax Month - April 2016

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…

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

Tax Month - April 2016

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…

Innovation Agenda: Easier access to company losses – draft legislation adding a ‘similar’ business test to the ‘same business test’ to satisfy a ‘business continuity test’

Tax Month - April 2016

On 6 April 2016, the Government has released a draft of the Tax and Superannuation Laws Amendment (2016 National Innovation and Science Agenda) Bill 2016, to implement its December 2015 Innovation Agenda measure to allow increased access to company tax losses. On 7 December 2015, the Government announced a package of measures designed to incentivise and reward innovation as part of its…

PCG 2016/5 – SMSFs and arm’s length loan terms for related party Limited Recourse Borrowing Arrangements: ATO auditing “safe harbour” terms

Tax Month - April 2016

The Tax Office on Wed 6.4.2016, issued Practical Compliance Guideline PCG 2016/5 setting out the Commissioner’s “safe harbour” terms on which SMSF trustees may structure related-party LRBAs consistent with an arm’s length dealing. The ATO generally takes the view that a SMSF may derive non-arm’s length income (taxable at 47%) if the terms of a LRBA are not consistent with…

TR 2016/D1 – Commercial websites – tax treatment: s8-1 general deductions; capital allowances (inc. ‘in-house software’); small business entities; capital gains tax; ‘black hole’ write-offs

Tax Month - April 2016

This Draft Ruling, issued on Wed 6.4.2016, sets out the deductibility of expenditure incurred in acquiring, developing, maintaining, or modifying a website for use in carry on a business. It covers expenditure in acquiring, developing, maintaining and modifying a website. The Draft also covers the deductibility of content migration and social media accounts. Generally, it…