Category Archives: Tax Month – December 2017

Trump’s US tax reform – not just 20% corporate rate but also proposals for compensating ‘base broadening’ such as denying US deductions for BEPS leakage amounts or US tax on foreigner export profits (with 80% ‘foreign tax credits’)

On 15 Dec 2017, the Tax Institute’s Senior Tax Counsel: Bob Deutsch wrote the following piece, which was included in their Tax Vine publication and also on their website (see below for further details). Also, there is ‘editorial comment’ in [square brackets]. ************* Much has been made of Donald Trump’s proposal to reduce the corporate…

NSW: Residential Premises that are not ‘Dwellings’ – for 8% Surcharge Transfer Duty and 2% Surcharge Land Tax for ‘foreign persons’

On 29 Nov 2017, the NSW OSR issued Revenue Ruling G 011: Surcharge Land Tax and Duty – Residential Premises that are not Dwellings. This ruling gives guidelines to help taxpayers identify the types of premises the Chief Commissioner does, and does not, consider to be ‘dwellings’ for purposes of the following ‘surcharges’ on top of…

OECD Model Tax Convention – latest edition released with significant changes from the OECD/G20 BEPS project (Hybrids, Treaty Benefits, PE avoidance and Dispute Resolution)

On 18/12/2017, the OECD released its latest edition of their Model Tax Convention.This incorporated significant changes developed under the OECD/G20 project to address base erosion and profit (BEPS). The OECD Model Tax Convention, a model for countries concluding bilateral tax conventions,  plays a crucial role in removing tax related barriers to cross border trade and investment. It…

Reducing the corporate tax rate – ATO’s summary of the relevant law, bills and progressive reduction of the tax rate, to 25%, for all companies by 2026/27

Practitioners will need to be on top of the reductions in the corporate tax rates, which can be confusing. The following is helpful, as it is the ATO’s summary of the relevant Acts and Bills, with the relevant ‘phase in’ dates and thresholds spelt out in tables. On 1 September 2016, the Government introduced Treasury…

Board of Taxations December 2017 meeting – CEO’s report – pipeline of possible projects; Sounding Board; Tax Transparency Code report (120 signatories – 50% of company tax)

The Board of Taxation’s CEO: Ms Karen Payne, reported on the Board’s meeting on Thursday 7 December 2017 (the final meeting for the year). Pipeline of possible projects The Board continued to discuss the scope and content of a number of possible projects, including: A review of small business tax concessions; A comparison of the…

Trust vesting – ATO seeks feedback on TR 2017/D10 and overviews how a trust comes to vest and with what effect

On 18 Dec 2017, the ATO posted an article drawing attention to its recently released draft Tax Ruling on vesting trusts: TR 2017/D10 (see related Tax Month article). It advises as follows. What happens to a trust on vesting will depend on the requirements set out in your client’s trust deed. Broadly, beneficiary interests in…

PCG 2017/4 – ATO guidance on assessing cross-border, related ‘financing arrangements’ risk levels – self assessed and ATO assessment for audit or further inquiry

On 18 Dec 2017, the ATO finalised its Practical Compliance Guideline PCG 2017/4 on its compliance approach to cross-border related financing arrangements. It also posted a brief article, about the finalised PCG, including the main changes since the draft. The guidance explains how taxpayers can price related party loans to demonstrate they are ‘low risk’ and avoid compliance action.…

TR 2017/D10 – Vesting of Trusts – draft ruling goes through extending a trust’s vesting date; CGT consequences of vesting a trust; and Taxation of trust net income after the vesting date

On 13 December 2017, the ATO issued a Draft Ruling on trust vesting: Draft TR 2017/D10. This sets out the Commissioner’s preliminary views about the vesting of a trust, changing the trust’s vesting date and the income tax consequences of vesting.  Amending a Trust’s Vesting Date A trust deed will nearly always specify a date on…

Whitby Land Company Pty Ltd (Trustee) v. Deputy Commissioner of Taxation – Decision Impact Statement – alternative assessments on beneficiaries and the trustee (under both s98 & s99A) held valid – not ‘tentative’

Précis The case deals with the validity of ‘alternative assessments’ – whether ‘tentative’ or not – upholding established law and the Commissioner’s practices. This was in the context of assessing a trust’s income. Brief summary of facts The applicant was the trustee of a discretionary trust. Because the Commissioner had insufficient information to determine whether…

Vic: State Taxation Acts Further Amendment Bill passed – payroll exemption for ‘for profit’ training organisations; absentee owner surcharge – extra exemption; foreign purchaser extra duty for first home owner

On 14 December 2017, 4 amendments were made to the State Taxation Acts Further Amendment Bill 2017 in the Legislative Council. They concern inserting a definition of “business day”, and other minor amendments. The Legislative Assembly subsequently agreed to those amendments, so the bill has passed both houses. The Bill contains various amendments including: to the Payroll Tax…