Category Archives: Tax Month – November 2018

Labor Government would give the ATO the power “name and shame” directors of phoenix companies & GSEs in Part IVA (by ‘disallowable instrument’) and apply to ASIC for disqualification of relevant directors

Shadow Assistant Treasurer Andrew Leigh has announced that, if elected, a Labor Government would “name and shame” directors of phoenix companies – those illegally/fraudulently ‘phoenixed’ – where directors and/or others deliberately leave companies unable to pay their obligations to employees and respective governments (which is estimated to cost the Australian economy as much as $5.1…

Inspector-General of Taxation retired, Deputy: Andrew McLoughlin is acting IGT – IGT has absorbed Tax Ombudsman’s role, letting ‘individual’ complains inform the ‘systemic’ and vice versa

On 5 November 2018, Mr Ali Noroozi retired from the role of Inspector-General of Taxation – after having acted for 2 terms of 5 years and having seen in many significant development, but perhaps none less than absorbing the Tax Ombudsman’s role (individual complaints) with its ongoing role, which is investigating and reporting on ‘systemic’…

Tax effect of new accounting standard: AASB17 (IFRS17) for consistent treatment of both life and general insurance contracts – Treasury discussion paper to consider currently different tax treatments

Treasury has released a consultation paper on the tax impacts of implementing the new accounting standard for insurance contracts (AASB17) which provides a consistent accounting treatment of all insurance contracts. AASB17 adopts the new international standard for insurance companies: IFRS17. The tax implications, from a change in accounting standards are as follows. First, the ITAA97…

NSW: Stamp duty rate threshold brackets will be indexed to CPI (see CPI indexing average duty effect over last 30 years)

On Monday 5 Nov 2018, the NSW Treasurer announced that NSW will be the first state or territory in Australia to index Stamp Duty brackets to Consumer Price Index (CPI) guaranteeing everyone in the housing market a fairer deal on future property transactions. He said: “We haven’t seen any significant action on Stamp Duty brackets…

CofT v Pavihi – Federal Court granted the Commissioner an interim injunction, and substituted service, to restrain alleged promotion of illegal early release schemes – involving rollover of benefits to SMSFs for payment outside the ‘payment standards’

The Federal Court has granted the Commissioner an interim injunction to restrain an alleged promoter of an illegal early release scheme from being involved in the establishment of self-managed superannuation funds (SMSFs) and directed that the Commissioner be allowed to serve notice of these proceedings, on the Respondent: Ms Pavihi, by email, as she was…

EE&C Pty Ltd as Trustee for the Tarcisio Cremasco Family Trust v CofT – Deed of settlement effective to contract out of objection rights for taxpayer – no basis for AAT review

In this case, the AAT decided that the terms of a Settlement Deed, which the trustee and the Commissioner executed, prevented the trustee objecting and precluded the AAT reviewing the assessments issued in accordance with that Deed. The taxpayer was the trustee of a family trust. There had been ongoing disputes, audits and negotiations regarding…

Petroleum Rent Resources Tax (PRRT) – Government’s response released – 10 percentage point reduction in ‘exploration’ expenditure uplift & on-shore projects removed from PRRT

On Friday 2 November 2018, the Treasurer released there Government’s final response to the review of the Petroleum Rent Resource Tax (PRRT), commenced in 2016 and conducted by economist: Mike Callaghan. He also issued a Media Release, summarising the result. The PRRT was introduced in 1988 by the Hawke-Keating Labor Government and represented a Federal version…

LCR 2018/8 – Cleaning and courier industries’ new annual contractor reporting obligations – payments from 1 July 2108, first report due 31 July 2019

On Wed 31.10.2018, the ATO released Law Companion Ruling LCR 2018/8 on the recently enacted measure to extend the third party reporting regime to entities in the cleaning and courier industries. The law was amended under the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, which became law on 3 October 2018. ABN…

TD 2018/D6 – the ‘debt/equity’ rules operate on the ‘arm’s length conditions’ deemed to exist, for the purpose of determining if a ‘transfer pricing benefit’ arises under Subdivision 815-B

On Wed 31 Oct 2018, the ATO issued Draft Tax Determination TD 2018/D6, which considers the interaction between the debt/equity rules and Australia’s transfer pricing rules. The Commissioner’s approach is that the debt/equity rules (in Div 974 of the ITAA97) cannot limit the operation of the transfer pricing rules( in Subdiv 815-B) – which appears…

TD 2018/15 – the CGT consequences of granting an easement, profit à prendre or licence over an asset – CGT event D1 (not A1) – limited cost base, no 50% discount, no main residence exemption, no pre-CGT exemption

On Wed 31.10.2018, the ATO issued Taxation Determination TD 2018/15 on the CGT consequences of granting an easement, profit à prendre or licence over an asset. In the Commissioner’s view, CGT-event D1 happens (under s104-35 of the ITAA97) when the right is created, rather than it being a s104-10 CGT-event A1 for a partial disposal…