Category Archives: Tax Month – February 2015

Super excess non-concessional contributions – option to withdraw: draft regulations [39]

Treasury [on Wed 18.2.2015] released for comment exposure draft regulation and an accompanying draft explanatory statement, which propose to make changes to regulations to implement the Fairer Taxation of Excess Non-concessional Contributions reforms and correct minor technical errors in the regulations. The changes will allow individuals to withdraw superannuation contributions in excess of the non-concessional…

SGC changes announced in the MYEFO 2014/15 [38]

The federal government has announced in the 2014/15 Mid-Year Economic and Fiscal Outlook a number of proposed amendments to the superannuation guarantee charge (SGC) rules for late or short payment of superannuation contributions from 1 July 2016. These changes include: the earnings base for the SGC will be brought into line with the current earnings…

OECD International VAT/GST Guidelines – place of taxation rules and supporting provisions – comments on discussion drafts [37]

On 18 December 2014, the OECD invited comments from interested parties on discussion drafts of 2 new elements of the OECD International VAT/GST Guidelines. These discussion drafts related to: (i)            the place of taxation of business-to-consumer supplies of services and intangibles (B2C Guidelines); and (ii)           provisions to support the application of the Guidelines in practice (Supporting provisions). The…

*Re Bryxl Pty Ltd as Trustee for the Kypu Trust and FCT – GST: no enterprise of land development, so ITC’s denied and ABN/GST registration cancelled [36]

A taxpayer has been unsuccessful before the AAT in a matter concerning its claim that it was carrying on an enterprise of land development for GST purposes and therefore entitled to input tax credits (ITCs) for claimed creditable acquisitions. The taxpayer was registered for GST in August 2010. It claimed it had purchased property in Victoria for…

*Re Caporale and FCT – GST and default ITX assessments upheld – no enterprise and explanations inadequate [35]

The AAT has disallowed a taxpayer’s appeal against GST and s 167 default income tax assessments, although it set aside an administrative penalty for one of the years in question. [See fuller article under ‘Cases’ – ‘Administrative Appeals Tribunal’ above.] The Tribunal said the taxpayer’s case was “full of inconsistencies, contradictions, inadequate explanations and unsupported and…

Rio Tinto Services Ltd v FCT – Taxpayer fails to get ‘input tax credits’ for provision of remote area residences to mining staff [34]

In a test case decision handed down [on Thursday 19.2.2015], the Federal Court has dismissed a taxpayer’s appeal concerning its entitlement to input tax credits (ITCs) for certain acquisitions relating to mining accommodation in WA. The taxpayer, Rio Tinto Services Ltd, is the representative member for the Rio Tinto Ltd GST group, which includes Hamersley…

Garrett v FCT – GST input tax credits: no standing to act on behalf of another entity [33]

In a decision handed down [on Wed 4.2.2015], the Federal Court has dismissed as incompetent a taxpayer’s appeal against an AAT decision of 28 August 2014 (Re The Trustee of Oenoviva (Australia & New Zealand Plant and Equipment Trust and FCT[2014] AATA 614). The taxpayer had been unsuccessful before the AAT in seeking to have standing and…

‘Independent Review’ hitting mark with large taxpayer disputes – ATO speech [32]

ATO First Assistant Commissioner, Review and Dispute Resolution, Debbie Hastings, [on Fri 20.2.2015] delivered a speech at the Tax Institute’s 2015 Financial Services Taxation Conference held in Surfers Paradise on the ATO’s approach to managing disputes since the introduction of Independent Review in July 2013. Ms Hastings said Independent Review “was introduced to promote the earlier resolution…

*PS LA 2015/3 – ATO approval process re application of arm’s length conditions: transfer pricing (ie. using the ‘reconstruction power’) [31]

The ATO [on Thur 26.2.2015] issued Practice Statement PS LA 2015/3 outlining the approval process where the Commissioner relies on s 815-130(2) to 815-130(4) of the ITAA 1997 [the ‘restructuring power’] to identify arm’s length conditions in relation to cross-border transfer pricing. It does not apply in instances where ATO personnel are merely re-pricing an entity’s…

*PS LA 2015/2 – Commissioner directs staff to not assess later than other amendment time limits – 4 years and 2 years for small business entities [30]

The ATO [on Thursday 19.2.2015] issued Practice Statement PS LA 2015/2 outlining its practice of limiting the period within which it will raise an original trustee assessment. It notes that the practice means returns lodged by trustees are broadly exposed to similar time limits for review as other taxpayers. Generally, the ATO notes that it…