Category Archives: Tax Month – December 2014

*GIC and SIC rates for Jan-Mar 2015 quarter [48]

The Tax Office has advised that the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) rates for the 3rd quarter of the 2014-15 financial year (ie 1 January 2015 to 31 March 2015) are as follows: GIC annual rate is 9.75% [‘base rate’ of 2.75% + 7%]; GIC daily compounding rate is 0.02671233%; SIC annual rate is 5.75%…

Private health insurance rebate – double claims: ATO amended assessments [47]

The ATO says it regularly matches data with health insurers to identify taxpayers who received the private health insurance (PHI) rebate through reduced premiums and have claimed them in their income tax return. When this double claim occurs, the ATO says it automatically amends their assessment to remove the rebate. The ATO says it has…

ATO rental property review letters made clearer [46]

The ATO says it has redeveloped the letters it sends to tax practitioners and their clients regarding reviews of rental, legal and/or borrowing expense claims. Following feedback, the ATO says it will provide information on specific expense claims it is reviewing. It says the re-drafted letters will now identify: return label and amounts in question;…

Tax obligations of tax agents: ATO compliance action [45]

The ATO says it recently undertook lodgment compliance action against several tax agents who incorrectly advised they had no requirement to lodge personal or business tax returns. The ATO says these tax agents were running active businesses, lodging significant numbers of returns for clients. The ATO notes that registered agents who fail to comply with…

*PS LA 2014/4 – Failure to produce document necessary for assessment (75% of shortfall) – ATO administration of regime including remission power [44]

Practice Statement PS LA 2014/4 was released on Wed 17.12.2014. It deals with administration of the penalty imposed under s 284-75(3) of Sch 1 to the Taxation Administration Act 1953. It explains: (i) the circumstances in which an entity becomes liable to a subsection 284-75(3) penalty, and (ii) how the penalty is assessed, including remission. Subdivision 284-B…

*PS LA 2014/3 – Simplifying transfer pricing record keeping [43]

This Practice Statement, released on Wed 17.12.2014, provides ATO personnel with guidance on the application of the options under Simplifying Transfer Pricing Record Keeping. In accordance with the assurance given in the online guidance Simplifying Transfer Pricing Record Keeping, the ATO says if an entity has elected to apply a simplification record keeping option(s), then…

*PS LA 2014/2 – Administration of transfer pricing penalties [42]

This Practice Statement, released on Wed 17.12.2014, considers the administration of transfer pricing penalties for income years commencing on or after 29 June 2013. It explains: (i)      when an entity will be liable for a transfer pricing penalty; (ii)     how the entity’s transfer pricing penalty is assessed, and (iii)    how the Commissioner’s discretion in…

*PS LA 2011/27 (on ‘U turns’) updated after Macquarie Bank decision – dealing with when the ATO should only apply its view of the law prospectively [41]

The ATO on Thur 4.12.2014, updated Practice Statement PS LA 2011/27 (Matters the Commissioner considers when determining whether the ATO view of the law should only be applied prospectively). The ATO had previously issued proposed amendments to the Practice Statement following the Full Federal Court’s decision in Macquarie Bank Limited v FCT [2013] FCAFC 119.…

ATOIDs: above-average special professional income; employers admin of ESS; Consolidation – Right to Future Income; Commission paid to executor [40]

The ATO on Fri 19.12.2014, issued the following IDs: ATO ID 2014/41: Application of above-average special professional income provisions to individuals who earn income from uploading videos on YouTube; ATO ID 2014/42: Income: employer costs for the purpose of administering its employee share scheme are deductible; ATO ID 2014/43: Consolidation: Right to Future Income: whether…

ATOIDs – Capital Allowances, undeducted construction expenditure, related party non-commercial limited recourse borrowing [39]

The ATO on Fri 12.12.2014 released the following IDs: ATO ID 2014/37: Capital Allowances: capital works – construction expenditure – costs to build temporary roads and restoration costs; ATO ID 2014/38: Capital Works: undeducted construction expenditure – period where no capital works deduction is available; ATO ID 2014/39: Income Tax: non-arm’s length income – related…