Category Archives: Tax Month – October 2016

Re Moriarty and FCT – third application for release unsuccessful – $440k in liabilities over 7 years, hardship likely but discretion to release not excercised – excessive expenditure, other borrowings, 7 years all lodged late

A taxpayer has been unsuccessful before the AAT in seeking to be released from his tax debts under s340-5 of Sch 1 to the TAA. The chronology of returns and three hardship applications is as follows [taken from paras 7 – 13 of the AAT’s reasons]. In November 2006 Mr Moriarty applied for, and was released…

Re Three Wickets Pty Ltd v Tax Practitioners Board – individual’s and corporate agent’s registration terminated for breach of the ‘fit and proper person test’ triggered by his own failure to lodge ($500k liabilities)

The AAT has affirmed the Tax Practitioners Board decision to terminate a tax agent’s registration and the registration of a company. The Board did so under s 40-15(1)(b) of the Tax Agent Services Act 2009 (TASA) on the basis that the company had ceased to meet the registration requirement in s 20-5(3)(a) of the Act that each…

New Australia-Germany DTA – Bill to give it force of law, in Australia, passed both houses and received Royal Assent as Act No. 64 of 2016

On 13.10.16, the International Tax Agreements Amendment Bill 2016 passed all stages of Parliament and received Royal Assent on 20.10.16 as Act No. 64 of 2016. The Bill amends the International Tax Agreements Act 1953 to give legislative effect to the Agreement between Australia and the Federal Republic of Germany for the Elimination of Double…

Vic taxes – State Taxation Acts Further Amendment Bill 2016 introduced – amend payroll tax on exempt component of vehicle allowances and land tax for ‘absentee’ trusts

On Tuesday 11.12.16, the Victorian Government introduced the State Taxation Acts Further Amendment Bill 2016 (Vic) into the Victorian Legislative Assembly on Tue 11.10.2016 and it had passed the Lower House by the end of October 2016. It proposes to amend the Payroll Tax Act 2007 (Vic) to update the way the exempt rate used in the calculation of…

NSW land tax: Lloyd & Anor v Chief Comr of State Revenue – principal place of residence exemption refused to couple who had not lived in the house for the 4 years since purchase

On Wed 12.10.2016, the NSW Civil and Administrative Tribunal refused a couple’s (the taxpayers) claim for the principal place of residence (PPR) land tax exemption for the 2013 to 2015 land tax years. In October 2012, the taxpayers purchased the subject property. The taxpayers said the house on the property was “uninhabitable” and their initial plan was…

Tech Mahindra Limited v FCT (No 2) – Suppression order refused for unsuccessful taxpayer found to be subject to Australian royalty withholding tax on payments for work done in India

On Wed 12.10.2016, the Full Federal Court refused a taxpayer’s request for suppression or non-publication orders under Pt VAA of the Federal Court of Australia Act 1976, in particular s37AF, in relation to certain information claimed to be confidential information. The Court gave judgment on 22 September 2016 on the substantive issues in the appeal, in Tech…

CR 2016/70-72 – Scrip-for-scrip rollover for merger of OneVue Holdings Limited and Diversa Limited; Scrip-for-scrip rollover for Royal Dutch Shell plc; off-market share buy-back for Telstra Corporation Limited

On Wed 12.10.2016, the ATO issued the following Class Rulings: CR 2016/70: Scrip for scrip roll-over: merger of OneVue Holdings Limited and Diversa Limited. It applies from 1 July 2016 to 30 June 2017. CR 2016/71: Royal Dutch Shell plc. combination with BG Group plc – CGT scrip for scrip roll-over. It applies from 1 July 2015 to 30 June 2016. CR 2016/72:…

TR 2016 /D2 – draft ruling on when an equity distribution received by an Australian corporate tax entity, from a foreign company, is NANE income

On Wed 12.10.16, the ATO issued Draft Taxation Ruling TR 2016/D2 to provide guidance on the participation test in Subdiv 768-A of the ITAA 1997 when working out whether an equity distribution received by an Australian corporate tax entity from a foreign company is not assessable and not exempt (NANE) income. Subdivision 768-A provides that…

‘Backpacker Tax’ – Bills introduced to implement a 19% tax to $37k, a registration system for employers with a 19% withholding rate, reduced visa price, increased passenger movement charge and Parliamentary report

The Governement introduced a package of 4 Bills to implement the ‘backpacker tax’ changes, it announced on 27 September 2016, that will tax working holiday makers in a particular way (most notably by imposing a 19% tax rate from the first dollar of assessable income, up to $37,000, at which point normal resident marginal tax…

NSW: duty and land tax surcharges on ‘foreign persons’ – ruling adopting the extensions to the definition of ‘foreign person’ set out in the Foreign Acquistions and Takeovers Act 1975

The 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the purchase of residential real estate by foreign persons from 21 June 2016. The surcharge is in addition to the duty payable on the purchase of residential property. Foreign persons will no longer be entitled to the 12 month deferral for the…