Category Archives: Tax Month – December 2021

PCG 2021/4 – New guidelines on allocation of professional firm profits (read degree of ‘income splitting’) – 1 July 2022 start date (don’t ask why it only applies to ‘professionals’)

Four years after suspending the application of its guidelines Assessing the Risk: Allocation of profits within professional firms, the ATO has released its long-awaiting replacement guidelines. Practical Compliance Guideline PCG 2021/4 sets out the ATO’s revised compliance approach to the allocation of professional firm profits and also provides a risk assessment framework to assist individual…

Stealth Enterprises Australia Pty Ltd v CofT – Canberra brothel understated its income – assessed after making an insurance claim for an arson attack

On 10 December 2021, a company operating a brothel, in Canberra, has failed to show that amended assessments were excessive. The assessments were based on a claim the company made to its insurer, after an arson attack. The facts were these. The taxpayer operated a brothel in Canberra from about April 2010 to January 2012 when the premises were…

Oberg v CofT – Australian national working overseas for 23 years still an Australian tax ‘resident’ under the ‘ordinary meaning’ of that term

On 13 December 2021, the AAT held that an Australian national, who worked overseas for 23 years, was still an Australia resident, for tax purposes, under the ‘ordinary meaning’ of that term. This was despite not being in Australia, for 183 or more days, in either of the years for which the Commissioner assessed the…

Proxy advice to Super funds – regulations made to require advisers to be independent, advise companies on the same day and superfunds to disclose how they ended up voting

The Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021, registered on Fri 17.12.2021, aims to improve the disclosure of superannuation funds’ voting records on company resolutions and make proxy advice services more accountable. They will require proxy advice firms to be independent of the super funds they advise and give the company, the…

APRA issues annual ‘MySuper’ performance heatmaps and inaugural ‘Choice products’ heatmap – on average dearer for poorer performance

The Australian Prudential Regulation Authority (APRA) has sharply lifted transparency around superannuation member outcomes with the publication of its first Choice Heatmap, alongside the annual MySuper Heatmap. The (1) MySuper and (2) Choice Heatmaps, and accompanying information papers, are available on APRA website at: Superannuation heatmaps. The Choice Heatmap, which captures products and options in which members…

La Mancha Africa S.A.R.L. v CofT – “Harman undertaking” does not constrain the Commissioner getting and using documents from other Court proceedings

On 15 December 2021, the Federal Court held that the “Harman undertaking” (broadly, to not use court documents other than for the purposes of that court case) does not constrain the Commissioner’s lawful exercise of his statutory powers to get access to and require delivery of documents and information, nor his duties (to assess tax).…

Pitman v CofT – Bankrupt taxpayer lacked standing to challenge objection decision (not relevantly ‘dissatisfied’) despite facing related criminal charges

On 16 December 2021, the Full Federal Court has confirmed that a bankrupt taxpayer had no standing to apply for a review of a decision disallowing her objections to amended assessments. Ordinarily a taxpayer is not relevantly ‘dissatisfied’. Here, however, the taxpayer had been charged with various offences based on there being a tax debt,…

Singtel fails in claim for deductions on $895k of interest – failing the ‘arms length’ test in the ‘transfer pricing rules’

On Monday 20 December 2021, the AFR reported on the Friday 17 December decision of Justice Moshinsky, in the Federal Court, which found against the taxpayer on transfer pricing interest deductibility issues (see related TT article). The AFR Article is set out below.     Singapore Telecommunications has failed in an attempt to get almost $895…

Singapore Telecom Australia Investments Pty Ltd v Commissioner of Taxation – Federal Court finds against taxpayer on transfer pricing interest deductions

On 17 December 2021, the Federal Court (Moshinsky J) handed down a decision which found against the taxpayer on transfer pricing interest deductibility issues (see related TT Article). This is case involving the group that owns Optus, where interest deductions totalling almost $895m were denied. The facts were these. The Taxpayer and SAI were ultimately 100%…

Guardian AIT Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation – Federal Court finds against ATO on both s100A reimbursement and Part IVA general anti-avoidance assessments

On 21 December 2021, the Federal Court (Logan J) handed down the decision in Guardian AIT Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation – which found against the Commissioner of Taxation on both issues, namely, whether anti-avoidance ‘Recoupment’ provisions in s100A of the ITAA36 applied (to impose s99A tax on the trustee, by deeming…