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






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]



*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]




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]



*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]




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]



*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]



*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]




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]




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]




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





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




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)




New Treasury Secretary appointed – Mr John Faser [69]

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




: I have gathered these articles from various sources for the purposes of study and teaching and I have acknowledged the sources. None of this publication should reproduced in breach of copyright belonging to the acknowledged source. The headings to the articles are often mine (and shouldn’t necessarily be attributed to the publisher).

Source Abbreviations: ‘EDTN’ = Electronic Daily Tax News, published by CCH; ‘LTN’ = Latest Tax News published by Thomsons; and ‘Taxvine’ is the weekly publication by the Tax Institute of Australia; Greenfields = Greenfields Financial Services; TaxBar = Melbourne Tax Bar Association Newsletter at www.vicbar.com.au / Members / Bar Associations / Tax

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