Category Archives: Tax Month – October 2018

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…

Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 becomes law accelerating 25% company tax rate by 5 years for ‘base rate entities’ (Sub-$50m turnover & no more than 80% passive income)

The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 received Royal Assent on 25.10.2018, as Act 135 of 2018 and becomes law. The Government introduced the Bill into Parliament on 16.10.18 and passed both houses on 18.10.18. It implements the proposal to accelerate the reduction of the tax rate for corporate tax…

Regime to centralise ‘business registers’; starting with ASIC transferring 34 registers to the ABR (ATO); ‘Director Identification Number’ requirement to be created – draft legislation released

On 1 October 2018, Treasury released draft legislation proposing to implement its 2018-19 Federal Budget measures to modernise business registers and introduce Director Identification Numbers (DIN). SUBMISSIONS were due by 26 October 2018 (and are now closed). The legislative package, includes: The draft Commonwealth Registers Bill 2018 (Bill 1) – which establishes a statutory regime by which Commonwealth agencies…

Draft legislation to prevent deductions for repayment of principal on ‘concessional loans’ owed by previously exempt State and Territory Bodies on becoming taxable (eg. privatised)

On 12 October 2018, Treasury draft legislation to progress a measure announced in the 2018-19 Budget, that relates to State and Territory tax exempt entities, that become taxable, after 8 May 2018. This is described as an ‘integrity’ measure and is designed to stop such entities getting tax deductions on repayment of pre-privatising concessional loans. The deductions…

Draft Legislation – Assignments of Partnership Interests precluded from getting Div 152 ‘small business CGT relief – only assignments when the assignee becomes a partner will remain eligible

ON Monday 15.10.2018, Treasury released draft legislation to give effect to its 2018-19 Budget measure to remove access to the small business CGT measures for partners that (in the main case) assign part, or all of their interest in the partnership – which was done in the well known Everett [1980] HCA 6 and Galland [1984]…

Draft legislation to disallow certain deductions in relation to vacant land – unless used in carrying on a business or incurred by a company etc (unintended consequences for ‘residential premises?)

On Monday 15.10. 2018, Treasury released draft legislation to give effect to its 2018-19 Federal Budget measure to disallow deductions for expenses associated with holding vacant land, except in specified circumstances. Treasury’s explanation for the measure is [para 1.6 of the Draft EM] is: 1.6 As the land is vacant, there is often limited evidence…

Draft Anti-avoidance rules for circular trust distributions – Sch 2F ‘family trusts’ type entities to be removed from trusts ‘excluded’ from Div 6D ‘closely held trust’ Regime (sort of)

On Friday12 October 2018, the Government  released draft legislation to give effect to its 2018-19 Budget measure to extend a specific anti-avoidance rule for closely held trusts engaging in circular trust distributions to  ‘family trusts’ (but note, these are discretionary trusts that have made the ‘family trust’ election under (under s272-80 of Sch 2F to…

Vic duty: MD Commercial Pty Ltd & AJ Commercial Pty Ltd v Comr of State Revenue – transfers of land not exempt under s 35(1)(a) as a transfer for the transferor without a change in beneficial ownership – taxpayers lose appeal

The Victorian Supreme Court has granted taxpayers leave to appeal but then dismissed that appeal in a matter concerning exemption from duty of transfers of land under s 35(1)(a) of the Duties Act 2000 (Vic). Under the will of their deceased mother, two sons were entitled to the residue of their mothers estate, which included land…

Satyam Computer Services Ltd v CofT – DTA a sword not shield – Indian company taxable on DTA ‘royalties’ outside Australia’s withholding tax scope – because the DTA deemed those receipts to have an Australian ‘source’, so as to be assessable as ‘ordinary income’

On a ‘case stated’, the Full Federal Court held that an Indian company, was taxable, on payments it received, from Australian customers, under the Australia – India Double Tax Agreement, because that DTA changed the Australian domestic tax law, to give these payments an Australian ‘source’. This case is very important, as it was fought…