Tax Month – December 2018

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

– December 2018 Developments –

This is a collection of developments in Australian tax law and practice that occurred in December 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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Legislation

Acts etc.

• Treasury (No 4) Bill 2018 – Senate passes with Government amendments for more DGRs
• Enterprise Incentives (No 1) Bill 2017 – Senate amendment to remove self assessed depreciation for in-house software and IP assets
• Whistleblower Protections Bill passes Senate with 58 Government amendments
• Reform of the PRRT – uplift rate for expenditure and removing ‘onshore’ projects – draft legislation

Announcements

• Redundancy and early retirement scheme payments – Change to extend the current 65 age cap to match Age Pension eligibility
• Labor would give employees a right to chase their own super and increase ‘fines’ for under-reporting to the ATO

Cases

High Court

• WA stamp duty: Placer Dome Inc. case – High Court finds ‘landholder’ duty payable – land exceeded 60% as there was no ‘legal’ goodwill
• CofT v Tomaras – High Court finds Family Court can order Tax Comr to substitute husband for wife re tax debts

Full Federal Court

• CofT v Cassaniti – Full Federal Court affirms PAYG amounts were “withheld” from salary or wages and the employee was entitled to tax credits under s18-15 of the TAA53

Federal Court

• DCT v Pedley (No 2) – DPN liability stands – instalments not applied to company debts with ‘parallel’ liability for director

Administrative Appeals Tribunal (AAT)

• Queensland Maintenance Services case – AAT found ‘renovation compensation’ and ‘management fee’ expenses were not deductible

Other Courts & Tribunals

• —

Appeals

• —

Rulings

Decision Impact statements

• —

Rulings

• —

Determinations

• TD 2018/16 – Compensation for Child Sexual abuse not assessable

Law Companion Rulings

• LCR 2018/D8 – Reporting to ATO – extended to new types of sub-contractor payments
• LCR 2018/D9 & PCG 2018/D9 – Hybrid mismatch rules: ATO guidance on structured arrangements

Class Rulings & Product Rulings

• —

ATO Interpretative Decisions

• —

Practice Statements

• —

Practical Compliance Guides

• PCG 2018/8 – Commissioner will not apply audit resources to the 28.5% and 27.5% reduced company rate issues
• PCG 2018/D3 finalised as PCG 2018/9 on ‘central management and control’ – extending the ‘no ATO audit’ period to 30 June 2019
• LCR 2018/D9 & PCG 2018/D9 – Hybrid mismatch rules: ATO guidance on structured arrangements

Tax Alerts

• —

Other ATO news or statements

• ‘Earn-out arrangements’ – ATO releases Discussion Paper on the tax treatment of rights that don’t qualify for the ‘look through’ approach provided for under Subdiv 118-I
• GIC (8.94%) and SIC (4.94%) for the January – March 2019 quarter
• Corporate tax transparency report for the 2016–17 income year for public companies $100m turnover; private $200m
• Large corporate groups income tax gap – latest figures to 2015-16 – down  to $1.8b or 4%
• Swiss bank accounts – Commissioner gets list of holders

GST 

Legislation & Announcements (GST)

• NZ to impose GST on the foreign supplier of low-value imported goods from 1 October 2019 – Bill introduced

Cases (GST)

• —

Rulings, Etc. (GST)

• GSTD 2018/D1 – Credit card providers’ acquisitions only partly creditable

Superannuation

Legislation etc. (Super)

• SIS Regs amended to allow 1 year exemption from ‘work test’ for recent retirees

Cases (Super)

• Decision Impact Statement on Aussiegolfa case – non-arm’s length tenant, did not breach SMSF’s s62 ‘sole purpose test’ but ‘in-house asset’ test breached because the Sub-Trust was the relevant ‘fund’ for ‘related party’ definition purposes
• Williams v IS Industry Fund Pty Ltd – Super death benefit payable to the LPR as father had not been in an ‘interdependency relationship’ with his deceased son

Rulings etc. (Super)

• APRA takes action against IOOF for failing to act in best interests of superannuation members etc.
• SMSF auditors must verifying market values in an SMSF balance sheets
• LCR 2018/D10 – Super funds: proposed extension of NALI provisions to ‘non-arm’s length expenditure’

State Taxes

Legislation & Announcements (State)

• SA: 2018 Budget Bill receives Assent
• WA: Revenue Bills introduce major changes

Cases (State)

• NSW Payroll Tax – Chief Comr of State Revenue v Boss Constructions (NSW) Pty Ltd – estoppel (to avoid Commissioner’s unconscionable change of position) could not alter the statutory 21 day period for setting aside a Statutory Demand
• Qld payroll tax – Xede Pty Ltd & Ors v Comr of State Revenue – law didn’t allow a ‘sub-group’ of 4 dependent companies, to be excluded from the remaining 10 companies in a prima-facie group – even though relevantly independent of them
• Vic Duty – Rotary Club of Melbourne Inc. not a charity and land transfer duty payable – promoting “high ethical standards in business and professions” not relevantly ‘charitable’
• WA stamp duty: Placer Dome Inc. case – High Court finds ‘landholder’ duty payable – land exceeded 60% as there was no ‘legal’ goodwill

Rulings & Other (State)

• Vic: Vacant residential land tax’ and ‘absentee owner surcharge’ notifications due by 15 January 2019

Other Developments

Australian Charities & Not-for-Profits Commission (ACNC)

• —

Base Erosion & Profit Shifting (BEPS)

• EU compromise on ‘temporary’ digital tax blocked by group of European countries as 4 December 2018 deadline looms – whilst various states introduce their own or are getting ready to
• France determined to tax digital giants, from 2019, if there is no EU-wide agreement

Board of Taxation

• —

Inspector General; National Audit Office, JCPAA

• —

Miscellaneous

• Foreign owners forced to sell 316 homes for $380 million, since ATO policed illegal acquisitions in 2015

Tax Practitioners Board

• —

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[i]           Sources – abbreviations: ‘KPMG’: KPMG Daily Tax News; ‘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; ‘TaxVine’: The Tax Institute’s ‘TaxVine’.