DCT v Wilson – DPN liability for director of construction company – despite shareholder/director agreements to avoid PAYGw liability by not hiring employees, broken by the other directors, in their area of geographic responsibility and timely meetings to appoint an administrator or liquidator (where he was outvoted)

The NSW District Court has rejected a director’s defences to a director’s penalty notice (DPN) for $111,798. The defendant was the director of a construction company, formed in April 2015. Its activities were mainly conducted in Western Australia. The company lodged BASs in respect of the periods 1 April 2015 to 30 June 2015 and 1 July 2015 to 30 September 2015. The BASs identified…

PCG 2018/7 – restructuring out of arrangements likely to offend the new ‘anti-hybrid rules’ – 6 examples where the ATO will NOT apply Part IVA and a list of ‘low risk’ features (for deploying audit resources)

Practical Compliance Guideline PCG 2018/7, issued on Thursday 25.10.2018. It sets out the ATO’s compliance approach to restructures out of existing hybrid arrangements to avoid the potential application of the hybrid mismatch rules. The anti-hybrid rules, will generally take effect from 1 January 2019, and they address certain hybrid arrangements that exploit differences in the tax treatment…

IGT’s report – no evidence of systemic internal fraud or corruption in the ATO – report prompted by ATO fallout following the high profile ‘Project Elbrus’ investigation – IGT made 13 recommendations to ATO & 1 to Government (all accepted, at least in part)

The Inspector-General of Taxation (IGT), Mr Ali Noroozi, has announced the release of his report into the ATO’s fraud control management. The review arose because of the concerns surrounding Operation Elbrus (a major phoenixing operation conducted by the son of a senior tax officer), including allegations of tax fraud that may be associated to abuse of position…

Watson v CofT – Super Div 293 tax upheld against AIRC Vice President – legislation giving him the same status as a judge did not make him a judge for the purposes of the s293-190 exemption and did not offend s72(iii) of the Constitution

The AAT has upheld superannuation Division 293 tax assessments against a former Vice President of the Australian Industrial Relations Commission (AIRC) after ruling that he was not a “judge” for the purposes of the exemption under s 293-190 of the ITAA 1997. The taxpayer, the Hon Graeme Watson, is a former Vice President of the Australian…

Inspector General’s last (2017/18) Annual Report – covering its recent Complaints/Ombudsman Role and Systemic Reviews recently completed or ‘in progress’

The Inspector-General of Taxation released its 2017-18 Annual Report on 18 October 2018. The Inspector-General, Ali Noroozi, confirmed that this would be his last Annual Report, following his decision not to seek another term. The themes in the Annual Report included the following. The creation of the IGT in 2003 to investigate systemic problems in the ATO –…

SM Ho & Ors c CofT – GST on sale of properties – Lot 1 only 50% leased, only 50% GST-free; Lot 2 unleased and not input taxed; Lots 3&4: ‘margin’ can’t be calculated using development costs

A taxpayer has been unsuccessful in contesting GST assessments, relating to the sale of 4 properties. They imposed $265,296 of GST plus substantial further amounts of shortfall penalties, before considering, also, interest based penalties. The facts were these: The taxpayer bought 2 existing terrace properties (Lots 1 & 2) in 2001 – one used commercially…

ASIC appoints liquidators to 17 abandoned companies, assisting 32 employees access up to $570k in unpaid entitlements (and to investigate reasons for their failure and redress)

ASIC has assisted employees gain access to the Government’s ‘Fair Entitlements Guarantee scheme (Entitlements Scheme) by exercising its wind-up powers and appointing liquidators to 17 abandoned companies in the 12 months to 30 September 2018. Because ASIC appointed the liquidators, employees of these 17 companies can now apply to recover owed unpaid employee entitlements. The 17 abandoned…

Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 progresses – AMIT technical changes; update the list of DGRs and add indigenous language promotion; IP licensing subject to restrictive trade practices law

On 20.9.2018, the Government introduced the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 in the House of Representatives, where it sat until debated and passed on 17 October 2018 (and it moved to the Senate the next day). It proposes the following amendments: AMIT technical amendments – would amend the TAA, ITAA 1997, ITAA…

Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018 – new s26-105 to deny deductions for wages etc if PAYG amounts not withheld; amendments to s396-55 extend reporting obligations to contractor payments in the road freight, IT, security & investigation or surveillance industries

On 20.9.18, the Government introduced the Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018 in the House of Representatives and on 17 Oct 2018, it the Lower House and moved (the next day) to the Senate. The Bill proposes: to insert a new s26-105 into the ITAA 1997 that will deny an income tax…

Super fund ‘downsizer’ contributions – industry asks ATO what to do with ‘ineligible’ contributions received since the 1 July 2018 start to this regime

In a recent meeting of the Superannuation Administration Stakeholders Group, the industry representatives requested further advice, from the ATO, on the action required for ‘downsizer’ contributions that are subsequently found to be ineligible contributions. Currently there is a 13 month turnaround period for the ATO to determine whether the contributed amounts are ‘ineligible’, and this delay…