Category Archives: Tax Month – November 2018

OECD releases ‘synthesised text’ to give guidance on how relevant clauses of various DTAs would read after being modified by the MLI

On 14/11/2018, the OECD posted advice that it continues on the implementation of a landmark treaty to improve the international tax system which now covers 84 jurisdictions and will become effective on 1 January 2019 for the first 47 tax treaties concluded among the 15 jurisdictions that deposited their acceptance or ratification instrument. On the…

5 Year Jail Term for WA Phoenix operator – 2004-2007 historic offending investigated and prosecuted

The ATO reported that, on 16 November 2018, a Western Australian business owner: Sung Jae Cho, was sentenced in the District Court of Western Australia, to five years and four months’ jail for fraudulently obtaining more than $890,000 through illegal phoenix activity. He was also ordered to repay the money he stole. Mr Cho was convicted…

Cost establishing trees in carbon sink forests: write off over 14 years – required guidelines for planting updated – best and good practices required

On 16 November 2018, the Income Tax Assessment (Environmental and Natural Resource Management in relation to the Establishment of Trees for the purposes of Carbon Sequestration) Guidelines 2018 (made 12.11.18) was registered on the Federal Register of Legislative Instruments today. They have been made under s 40-1010(3) of the ITAA97. Subdivision 40-J of the ITAA97, provides that…

Comptroller General of Customs v Zappia – Customs duty: bonded warehouse manager personally liable for unpaid duty on stolen cigarettes

On 14 November 2018, the High Court unanimously held that an employee manager, of a ‘bonded warehouse’ could be liable for duty (on goods stolen from that warehouse) as, relevantly, having ‘possession, custody or control‘ of dutiable goods. The Court held that it was not only the bonded warehouse licence holder who could have this…

Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Act 2018 – new s26-105 denies deductions for wages etc. with no PAYG deducted; new reporting for “road freight”, “IT” or “security, investigation or surveillance” services

The Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018 and Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018 were both passed the Senate on 15.11.2018 and received Royal Assent, on 29.11.2018, as Acts No. 141 & 137 of 2018, respectively. The Black Economy Taskforce (No 2) Bill will: amend the ITAA97…

Mendonca v Tax Practitioners Board – Board infected its decision not to investigate complaints about 2 tax agents with ‘jurisdictional error’ – behaviour outside ‘tax agent services’ relevant to ‘fit and proper person’ test

On 7 November 2018, the Federal Court ordered that a decision of the Tax Practitioners Board (Board), to not investigate Mr Mendonca’s complaint, against the registration of two tax agents, was affected by ‘jurisdictional error’ and ordered that the decision be quashed. The Board conceded this and undertook, to the Court, revisit the complaint and…

GST fraud – Perth stockbroker extradited from US and sentenced to 5 years jail for $528,000 of fraudulent ‘input tax credit’ claims after decade-long investigation

The ATO reported that on 14 November 2018, a Perth stockbroker was sentenced to five years’ jail, for committing large-scale tax fraud, while living in the United States more than a decade ago. Gary Parsons, 53, was extradited from the US, in 2017, following a decade-long joint investigation by the Australian Taxation Office (ATO) and Australian Federal…

Government to support Small Business access to funding – Treasurer announces $2b to seed ‘securitisation’ of SME loans and a ‘Fund’ to provide patient capital for growth

On Wednesday 14 November 2-018, the Treasurer and Minister for Small Business issued a joint Media Release announcing 2 measures to assist small and medium enterprises (SMEs) get loan and equity funding. They are: To establish the ‘Australian Business Securitisation Fund’ with $2b of Federal funds. To establishment of an ‘Australian Business Growth Fund’ that would…

Douglass v CofT – Taxpayer appeals AAT decision that that the PSI rules to fully assess him on the remuneration for his work – despite being derived by a partnership with his wife

The taxpayer has appealed to the Federal Court against the decision in Douglass v CofT [2008] AATA 3729. The AAT had ruled that income received for engineering services was subject to the personal services income (PSI) rules, as the partnership business did not pass the “results test” in s87-18 of the ITAA97 (ie principally that at…

Employee Share Schemes (ESS) – Treasurer proposes the $5k tax free salary sacrifice limit be doubled to $10k and an extension of the Div 83A ESS tax regime to ‘contribution plans’

The Treasurer and Minister for Small Business made a joint announcement on 13 November 2018 that the Government was proposing to improve the ’employee share scheme’ (ESS) regime in a number of ways (referring primarily to the taxation regime in Div 83A in the ITAA97). The most important part of the announcement was that the…