Tax Month – December 2014

M o r g a n’ s   T a x   M o n t h

– December 2014 Developments –

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

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

Liability limited by a scheme approved under Professional Standards Legislation

Table of Contents

 

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Tax and Superannuation Laws Amendment (2014 Measures No 6) Bill 2014 received Royal Assent (Act No 133 of 2014) [1]

*Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014 – introduced [2]

*Treasury Legislation Amendment (Repeal Day) Bill 2014 – passed by the House of Representatives [3]

*Japan-Australia Economic Partnership Agreement: Bills receive Royal Assent and enter into force 15.1.15 [4]

*Additional PAYG withholding where requested by employee – revised withholding schedule registered [5]

 

Announcements

*Financial System Inquiry (by David Murray) – final report released [6]

*MYEFO 2014-15 – Govt releases: tax receipts expected to be down $6bn this year [7]

*New High Court judge to replace Justice Crennan – Justice Nettle [8]

*Senator Sinodinos resigns as Assistant Treasurer [9]

*Australia-Korea FTA to enter into force on 12 Dec 2014 [10]

*”Luxembourg leaks” – Former accounting firm employee charged over [11]

*OECD recommends Australia make greater use of GST and land tax [12]

OECD releases drafts of new elements of International VAT/GST Guidelines [13]

BEPS – OECD releases further drafts on transfer pricing [14]

BEPS – OECD releases 2 more discussion drafts for Actions 4 & 14 [15]

 

 

CASES AND APPEALS

High Court

*Comr of State Revenue v Lend Lease Development Pty Ltd & Ors – Vic stamp duty: land transfers dutiable – Commissioner wins appeal [17]

 

Full Federal Court

*Nelson v FCT – No primary production business being carried on – taxpayer loses appeal [18]

*FCT v Macoun – Pension from World Bank employment assessable: Commissioner’s appeal allowed [19]

*FCT v Qantas Airways Ltd – FBT: meaning of commercial parking station – Commissioner wins appeal [20]

 

Federal Court

*Allan J Heasman Pty Ltd v FCT – No deductions for contributions to employee welfare fund [21]

*John Holland Group Pty Ltd & Anor v FCT – Employee “fly-in fly-out” costs not deductible to employer [22]

*Hua Wang Bank Berhad & Ors v FCT – Companies were resident and liable to tax in Australia on sale of shares – reasons referred to law enforcement agencies to investigate money laundering & tax fraud (‘disgraceful’) [23]

 

Administrative Appeals Tribunal (AAT)

*Re Upson and FCT – Default assessments for drug traffickers upheld – did not prove the assessments were excessive [24]

*Re Pettiford and FCT – CGT: alleged construction costs were not included in cost base of property because they were not actually incurred [25]

 

Other Courts & Tribunals.

*DCT v Keane – Director penalty: DCT obtains summary judgment [26]

 

Appeals

*SPI PowerNet Pty Ltd v FCT – the High Court did not give leave to appeal the disallowance of deductions for payments on acquisition of power grid [27]

*Re Agius and FCT – taxpayer appeals decision that whilst he was non-resident, he had Australian source income [28]

 

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

*Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v DCT – Cayman Island liquidators re Aust tax debt [29]

 

Rulings

*TR 2014/7 – Foreign Income Tax Offset (FITO): source of hedging transactions – source of hedging transactions for the purpose of the s770-75 FITO limit [30]

*TR 2014/8 – Transfer pricing documentation requirements [31]

 

Determinations

*TD 2014/21 – Interest in shares requiring shareholder approval are not “indeterminate rights” for employee share scheme purposes [32]

*TD 2014/25-28 & GSTR 2014/3 – Bitcoin – income tax; CGT, trading stock, foreign currency; GST and FBT treatment [33]

TD 2014/22-24 – Consolidation, rights to future income and residual tax cost setting rules [34]

*TD 2014/D20 – Interest arising from arrangement funding return through connected entities [35]

 

Class Rulings & Product Rulings

Class Ruling – Wotif.com Scheme of Arrangement and payment of a Special Dividend [36]

Class Rulings: capital reallocation, demerger, early retirement scheme, rollover [37]

Class Rulings: Return of (share) Capital & Transfer of assets [38]

 

ATO Interpretive Decisions (ATOIDs)

ATOIDs – Capital Allowances, undeducted construction expenditure, related party non-commercial limited recourse borrowing [39]

ATOIDs: above-average special professional income; employers admin of ESS; Consolidation – Right to Future Income; Commission paid to executor [40]

 

Practice Statements

*PS LA 2011/27 (on ‘U turns’) updated after Macquarie Bank decision – dealing with when the ATO should only apply its view of the law prospectively [41]

*PS LA 2014/2 – Administration of transfer pricing penalties [42]

*PS LA 2014/3 – Simplifying transfer pricing record keeping [43]

*PS LA 2014/4 – Failure to produce document necessary for assessment (75% of shortfall) – ATO administration of regime including remission power [44]

 

Tax Alerts

Other ATO news or statements

Tax obligations of tax agents: ATO compliance action [45]

ATO rental property review letters made clearer [46]

Private health insurance rebate – double claims: ATO amended assessments [47]

*GIC and SIC rates for Jan-Mar 2015 quarter [48]

*Motor vehicle registries: ATO data matching program [49]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

GST Recipient Created Tax Invoice (RCTI) Determination amended – to allow for one training program provider closing in favour of a new one [50]

 

Cases (GST)

*FCT v MBI Properties Pty Ltd – s135-5 GST increasing adjustment – Court holds that the purchaser of a reversion still makes supplies to the lessee [51]

 

Rulings, Determinations & Other things (GST)

*GSTR 2014/2 GST treatment of ATM fees and surcharges to cover credit and debit card fees [52]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

*Pass-through of super contributions data; ADF tax exemption – reg made [53]

 

Cases (Super)

*DCT v Lyons Monetary penalties for breach of SMSF rules – sole purpose test, in-house assets test, etc [54]

 

Rulings & Other things (Super)

*SMSFs – related party limited recourse borrowing arrangements on non-commercial terms could give rise to Non-Arms length Income (‘NALI’) [55]

SMSF industry continues to grow, according to ATO statistics [56]

 

 

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

ACNC extended the date for lodgment of the 2014 Annual Information Statement to 31 January (because of office closure over Christmas) [57]

*ACNC template constitution for small charitable companies limited by guarantee [58]

 

 

BOARD OF TAXATION

*Board of Taxation appointments – Mr Michael Andrew as Chair; Peggy Lau Flux, Mark Pizzacalla and Craig Yaxley as members [59]

 

 

EXTERNAL SUPERVISORS – IGT; OMBUDSMAN, JCPAA & ANAO

TAX PRACTITIONERS BOARD & LEGISLATION

Tax (financial) advisers – Australian tax law and commercial law requirements: TPB [60]

 

 

STATE TAXES

Legislation & Announcements (State)

Tas: stamp duty; land tax; first home builders boost: Bills receive Royal Assent [61]

WA: Taxation Legislation Amendment Bill 2014 – various amendments made by Legislative Council – then returned to Legislative Assembly [62]

 

Cases (State)

NSW land tax: Paspaley v Chief Comr of State Revenue – principal place of residence exemption refused [63]

NSW payroll tax: Chief Comr of State Revenue v Seovic Civil Engineering Pty Ltd & Ors – grouping provisions – Commissioner wins appeal [64]

NSW payroll tax: Levitch Design Associates Pty Ltd ATF Levco Unit Trust v Chief Comr of State Revenue – exception to “relevant contract” for most years applied [65]

Vic stamp duty: Comr of State Revenue v Lend Lease Development Pty Ltd & Ors – land transfers dutiable – Commissioner wins appeal [66]

WA land tax: Galati-Rando & Anor and Comr of State Revenue – rural business exemption partially allowed [67]

 

Rulings & Other (State)

 

 

OTHER DEVELOPMENTS

New Treasury Secretary appointed – Mr John Faser [69]

*OECD revenue stats – Australia compared with the OECD averages [70]

 

THE END
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