Tax Month – April 2014

M o r g a n’ s   T a x   M o n t h

– April 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in April 2014 and which aims at being of relevance to tax lawyers.*

F John Morgan
A member of the Victorian Bar (www.FJMtax.com)

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills.

No withholding on payments to US sportspersons with no Australian Tax under the Aust-US DTA – instrument made under s15-15 & s16-180 TAA1 [1]

*Paying dividends: new draft of s254T of the Corporations Act released, changing ‘net assets’ test for pure solvency test, but no change to tax law [2]

Developing country relief funds declared [3]

 

Announcements

Regulation of Coastal Shipping – Options Paper released by MInister [4]

 

CASES AND APPEALS

High Court

*Thiess v Collector of Customs & Ors – No recovery of mistakenly paid customs duty and GST – High Court dismisses taxpayer’s appeal [5]

*MBI Properties Pty Limited v FCT – High Court allowed Commissioner to appeal decision that purchaser of reversion makes no supply to existing lessee [6]

*FCT v Ludekins – High Court refused taxpayers leave to appeal from decision that imposed promoter penalties for repackaged woodlots scheme [7]

 

Full Federal Court

*Batchelor v FCT – Repaid deposit for purchase of a retirement village was not an assessable recoupment [8]

*FCT v Resource Capital Fund III LP – Liability on $58m gain made on sale of shares by foreign resident partnership – Commissioner wins appeal [9]

*SPI PowerNet Pty Ltd v FCT – Electricity transmission business – deduction for State imposts refused – majority disallows appeal [10]

 

Federal Court

*FCT v Altnot Pty Ltd – CGT: maximum net asset value test and excluded assets [11]

Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Yerro and FCT – Car and travel expense claims disallowed [12]

*Re Hulsen and FCT – Serious hardship found, but release of tax debt refused as the release would not alleviate hardship and other debts paid ahead of tax [13]

 

Other Courts & Tribunals

*DCT v Zammitt – Commissioner wins appeal re retrospective DPN amendments [14]

*FCT & Darling and Anor – Commissioner wins appeal: documents filed in Family Court can be used for tax purposes [15]

 

Appeals

*SPI PowerNet Pty Ltd v FCT – Commissioner appeals to Full Federal Court against decision that copyright can be written off on the taxpayer’s valuation [16]

*Re Macoun and FCT – Comm’r appeals to Federal Court against decision that early retirement pension from World Bank was exempt from income [17]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

Rulings

*TR 2014/D3 – Application of new ‘transfer pricing provisions’: s 815-130 of the ITAA97 [18]

*TR 2014/D4 – Transfer pricing: documentation requirements [19]

*MT 2008/2 Addendum – amend ruling on shortfall penalties for taking a position that is not reasonably arguable deemed for transfer pricing [20]

 

Determinations

TD 2007/14 – Adendum A2 – CGT small business concessions: meaning of “liabilities” in calculation of net value of CGT assets [21]

*TD 2007/14 Addendum A3 – CGT: Meaning of “contingent liabilities” for calculation of “net value of CGT assets” following Byrne Hotels case [23]

*TD 2014/8 – Entitlement to franking credit in head company, when franked distribution made by non-member to a trust that is a subsidiary member [24]

TD 2014/9 – FBT: reasonable 2014-15 food and drink amounts for LAFHA recipients [25]

*TD 2014/10 – Dividend washing and anti-avoidance rule in s177EA [26]

TD 2014/D10 – Forex realisation event 4 on repayment of a loan before it becomes the functional currency [27]

 

Class Rulings & Product Rulings

CR 2014/34-35 – Early retirement scheme; demutualisation of society [28]

PR 2014/5-6 – Macquarie trust; equities loan [29]

CR 2014/36-38 – Retail property trust group stapled security; early retirement schemes [30]

PR 2014/7 – Investment loan as part of mortgage reduction program [31]

CR 2014/39 – Microsoft stock plan [32]

 

ATO Interpretive Decisions (ATOIDs)
Practice Statements

PS LA 2003/12 Amendment – CGT treatment of trustee of testamentary trust: ATO amends Practice Statement [34]

*PS LA 3672 (Draft) – Transfer pricing: administration of penalties [35]

*PS LA 3673 (Draft) – Transfer pricing: ATO guidance to staff on reviewing documentation [36]

 

Tax Alerts

Other ATO news or statements

*Small Business Super Clearing House – ATO takes over responsibility [37]

ATO data-matching: childcare payments; Qld grant payments [38]

Online selling via eBay: ATO data-matching program [39]

*ATO’s Offshore Voluntary Disclosure Initiative (OVDI) – Project ‘DO IT’ (Disclose Offshore Income Today) – gets early results [40]

CPI: March quarter 2014 indexation factor for FBT purposes – running at 2.9% to the year ended 31 March 2014 [41]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

Cases (GST)

*re Living Choice Australian Limited and FCT – Retirement village developer allowed partial ITC claims – 13% creditable purpose [42]

 

Rulings & Other things (GST)

GSTD 2014/D1 – GST-free supply of credit card facility for use overseas [43]

*GSTD 2014/D2 – Property rent below yield guarantee and adjustment events [44]

*PS LA 2005/2 (GA) on when margin scheme can be selected after the supply – amended to vary references [45]

Governments endorse new OECD Guidelines on applying VAT across borders [46]

*GSTR 2014/D1 – GST: Commissioner’s views on motor vehicle incentive payments after AP Group Ltd case [47]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

 

Cases (Super)

*Re Dominic B Fishing Pty Ltd and FCT – Super guarantee: Fishing crew members not “employees” as engaged in joint venture [48]

 

Rulings & Other things (Super)

Financial System Inquiry: Reserve Bank says super fees too high [49]

*TD 2014/7 – Segregation of superannuation fund bank accounts now possible (ATO’s changed its view) [50]

 

 

CARBON TAX & EMISSIONS REDUCTION FUND

 

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

 

 

AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR

Most charity info statements completed on time: ACNC [51]

*ACNC review reveals charity governance concerns [52]

 

 

BOARD OF TAXATION

 

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

Inspector-General of Taxation launches Twitter account [53]

New IGT work program announced [54]

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

Tax Practitioners Board v Dedic – Court orders injunctive relief against unregistered tax agent [55]

TPB regulation of ‘tax (financial) advisers’ – update [56]

Tax and BAS agent presentation videos: Tax Practitioners Board [57]

 

 

STATE TAXES

ACT: Duties (Commercial Leases) Amendment Bill 2014 awaits notification – it will impose ‘premium-based’ duty on leases [58]

 

Legislation & Announcements (State)

Vic: State Taxation Legislation Amendment Bill 2014 – update [59]

 

Cases (State)

ACT payroll tax: HJA Holdings Pty Ltd & Ors v Comr for ACT Revenue – grouping decision mainly affirmed [60]

ACT land tax: Hay v Comr for ACT Revenue – taxpayer’s circumstances “extreme in nature”, so penalties reduced [61]

NSW stamp duty: Al-Saeed and Associates Pty Ltd v Chief Comr of State Revenue – “declaration of trust” – trust deed dutiable, but interest to be remitted [62]

NSW payroll tax: Starr Partners Pty Ltd v Chief Comr of State Revenue – grouping decision affirmed [63]

NSW land tax: Favello Pty Ltd & Ors v Chief Comr of State Revenue – primary production land tax exemption refused [64]

Rulings & Other (State)

 

OTHER DEVELOPMENTS

Official interest rates left on hold at 2.5% [65]

Treasury Secretary ponders a greater role for indirect taxes [66]

Corporate tax base not being eroded: report [67]

*New EU rules on statutory audits of public interest entities: 10 year mandatory rotation, ban on providing tax advice and other ‘black list’ services [68]

*Australia and Japan conclude a Free Trade Agreement [69]

*Australia signs Free Trade Agreement with South Korea [70]

OECD releases comments received on BEPS draft on digital economy [71]

Australia and the US sign agreement on FATCA and enabling Act will follow [72]

 

THE END
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