Category Archives: Tax Month – October 2018

PCG 2018/6 – GST: ‘swim between the flags’ guidance on an inbound tour operator (travel agent) acts as an ‘agent’ for the Australian Product Provider (eg. hotel operator) – so their profit is GST-free

On Wed 10.10.2018, the ATO issued Practical Compliance Guideline PCG 2018/6 on when compliance resources will not be applied to check whether an inbound tour operator is acting as an agent for GST purposes. This is ‘swim between the flags’ guidance and is finalising the draft PCG 2018/D7 (see related Tax Technical article). This is…

LCR 2018/7 – explains the s26-31 ban on deducting residential rental property travel expenses for other than for companies etc. and other than in carrying on a business

On Wed 10.10.2018, the ATO issued Law Companion Ruling LCR 2018/7 on non-business travel costs incurred in relation to residential rental properties. From 1 July 2017, individuals, SMSFs and “private” trusts and partnerships can no longer deduct such costs (s 26-31 ITAA 1997). The ruling provides guidance on the meaning of key terms in s 26-31, and on…

Tax treatment of compensation paid to individuals from financial institutions for faulty advice or improperly charged fees, etc. – Commissioner posts guidance on website (in light of the Hayne Royal Commission into the Financial Services Industry)

With the Hayne Royal Commission into the financial services industry in full swing, exposing significant misfeasance in the Banking, insurance, financial advice and superannuation sectors, there is much talk of the compensation being paid or accelerated. With this in mind, on 8 October 2018, the ATO posted an advice page, on its website, about how…

ASIC recommends SMSF policy reforms – Answers to questions on notice to the Parliamentary Joint Committee on Corporations and Financial Services

ASIC has put forward a range of policy solutions for self-managed super funds (SMSFs) to be considered by the Parliamentary Joint Committee on Corporations and Financial Services. In response to Questions on Notice following the ASIC Oversight hearing on 17 August 2018, ASIC said the following policy solutions could be considered by the Committee in terms of: Member…

‘Feminine hygiene products’ to be GST-free – consultation on the definition (removing the ‘tampon tax’)

On 8 October 2018, Ministers: O’Dwyer (for Women), Hunt (for Health) and Freidenberg (Treasurer) announced the Government is getting on with the job of removing the Goods and Services Tax (GST) on feminine hygiene products, following the State Treasurers approving this change in the GST base. The proposed definition, which includes tampons, pads and cups,…

ATO guidance on new ‘electronic sales suppression tools’ bans – characteristics; offences; fines; administrative penalties and transitional rules for possessing such tools

The ATO has uploaded a page on its website to give more detail about ‘electronic sales suppression tools’ (Suppression Tools) the Treasury Laws Amendment (Black Economy Taskforce Measures No 1) Bill 2018 banned them from 4 October 2018. (See related Tax Technical article about the passage of that Bill into law.) Characteristics of an ESST The ATO…

IGT’s ‘Valedictory Speech’ included calls for the Government address his outstanding recommendations, including: to appoint an independent board to control the ATO; creation of an independent appeals branch under a new 2nd Commissioner and to rename the IGT as the ‘Taxation Ombudsman’

The outgoing Inspector-General of Taxation (IGT), Mr Ali Noroozi, has called on the Government to implement various of his outstanding recommendations, in a valedictory speech, on 4 October 2018. This was to mark his retirement. The primary recommendation was that recommendation that the Government (and Parliament) establish an independent management board to oversee the ATO.…

Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 passes into law – introducing offences and penalties for ‘sales suppression tools’ and adding ‘cleaning’ and ‘courier’ payments as reportable to the ATO

On 3 October 2018, the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018 received Royal Assent as Act no. 121 of 2018. See the previous Tax Technical article about the Bill’s introduction to Parliament. Schedule 1 – sales suppression tools – of the Act prohibits the production, distribution and possession of sales suppression…

CofT v Sharpcan Pty Ltd – Full Federal Court held that $600k that a pub paid for 10 year statutory ‘gaming machine entitlements’ were s8-1 deductible (as not ‘capital’) or deductible on a 5-year ‘blackhole’ write-off basis (if it was a capital expense)

A majority of the Full Federal Court has dismissed the Commissioner’s appeal against an AAT decision allowing a $600k deduction, for expenditure on gaming machine entitlements (GMEs), allocated by the State of Victoria. The Court held that this expense was deductible under s8-1 of the ITAA97 or, in the alternative (if the expense was ‘capital’…

Draft legislation for 1 Year exemption from the ‘Work-test’ for 65 – 74 year old recent retirees, with a superannuation balance under $300,000 – $25k concessional and $100k non-concessional caps continue (but not 3 year ‘bring forward’)

On 2 October 2018, the Government has released draft legislation to give eligible older Australians additional flexibility to contribute more into superannuation as they move into retirement – as announced in the 2018-19 Budget as part of the More Choices for a Longer Life package. Currently, there is a ‘work test’ hurdle, which is that individuals…