Tax Month – April 2018

T a x  T e c h n i c a l  –  M o n t h l y  N e w s

– April 2018 Developments –

This is a collection of developments in Australian tax law and practice that occurred in April 2018
which aims to be relevant to tax practitioners.[i]

Compiled By

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 & Draft Legislation

• Remedial Power – Determination extends the Small Business Restructure Roll-over ‘direct tax’ relief to depreciating assets – so they could not be a deemed dividend (for instance)

Announcements

• Stapled structures – Integrity measures package announced – with a detailed document
• 2018-19 Budget – Treasurer abandons extra 0.5% Medicare Levy (stay at 2.0%) and flags other tax cuts to keep Federal taxes under 23.9% of GDP
• ABS 2016/17 Australian tax statistics – Income tax largest (33% of total taxes) and fastest growing at 6.0%
• CPI for March 2018 quarter increased 0.5 over the December 2017 quarter (inflation 1.9% for the full year) – relevant for FBT

BASE EROSION & PROFIT SHIFTING (BEPS)

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CASES AND APPEALS

High Court

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Full Federal Court

• Hart v CofT – attempt to divert trust’s legal practice income through a ‘loss company’ failed – director assessed personally on a ‘present entitlement’ to the income and Part IVA – 50% penalties upheld too

Federal Court

• DCT v Josway Hospitality Pty Ltd – Winding up order set aside because of s160(1) ‘doubt’ that the posted ‘statutory demand’ arrived – accountant’s affidavit pivotal
• CofT v International Indigenous Football Foundation Australia Pty Ltd – ‘promotor penalties’ for R&D ‘tax exploitation schemes’ – company and director ‘contravened’ and $4.25m in civil penalties (interesting circumstances)
• Stojic v DCT – director fails in action to ‘judicially review’ the Commissioner’s decision to refuse payment (of DPN liabilities) by instalments – no need to give director notice of a need for security

Administrative Appeals Tribunal (AAT)

• PSJF v CofT – Deductions for $37k of employee photographer’s work-related expenses denied in the absence of requisite substantiation and doubts about underlying deductibility
• MMFT v CofT – Taxpayer fails on 3 default assessments & the 75% ‘failure to lodge’ penalty – PSI, PAYGw, Rental Losses, Motor Vehicle deductions, flight deductions, phone/internet

Other Courts & Tribunals

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Appeals

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COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

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Rulings

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Determinations

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Law Companion Rulings

• LCR 2018/D1 – Purchaser’s obligation to pay a GST ‘withholding’ amount on a taxable supply of newly constructed ‘residential premises’ and certain ‘potential residential land’ or land – draft Ruling on operation of new law

Class Rulings & Product Rulings

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ATO Interpretative Decisions

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Practice Statements

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Practical Compliance Guides

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Tax Alerts

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Other ATO news or statements

• Four Corners and Fairfax story of various alleged ATO abuses – one being an ATO whistle blower, his treatment, whether the new ‘whistleblower’ Bill would have helped
• ATO’s Superannuation Clearing House has experienced delays in processing contributions – SG and Fair Work assurance to affected employers

GST DEVELOPMENTS

Legislation & Announcements (GST)

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Cases (GST)

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Rulings, Etc. (GST)

• LCR 2018/D1 – Purchaser’s obligation to pay a GST ‘withholding’ amount on a taxable supply of newly constructed ‘residential premises’ and certain ‘potential residential land’ – draft Ruling on operation of new law

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

• SMSF auditor registration fee – proposed 18 fold increase, from 1 July 2018, as part of the AISC ‘fee for service’ changes

Cases (Super)

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Rulings & Other things (Super)

• ASIC updates guidance on AFS licensing requirements for accountants (Tax & BAS agents) who give advice about SMSFs (Self-Managed Superannuation Funds)
• SMSF Association’s Statement regarding disciplinary proceedings against financial planner: Sam Henderson for potential $500k loss from his advice – exposed in Banking Royal Commission

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

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BOARD OF TAXATION

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EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.

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TAX PRACTITIONERS BOARD & LEGISLATION

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STATE TAXES

Legislation & Announcements (State)

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Cases (State)

• NSW land tax: Moore v Chief Commissioner of State Revenue – Lot 2 was exempt from Land Tax, its dominant use was primary production by servicing commercial cultivation on the more dominant Lot 1

Rulings & Other (State)

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OTHER DEVELOPMENTS

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[i]           Sources – abbreviations: ‘ATOlpr’: ATO Legal Professions Relationships emails; ‘IT’: Inteliconnect Tracker (CCH); ‘LCA’: Law Council of Australia; ‘LTN’: Latest Tax News (Thomson Reuters); ‘Sievers’: Chris Sievers’ GST post (www. http://chrissievers.com); ‘TBA’: Tax Bar Association Newsletter; TX: Tax Week (Thomson Reuters); ‘Vine’: The Tax Institute’s ‘Tax Vine’.