Tax Month – February 2020

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

– February 2020 Edition –

Tax developments for tax practitioners by a tax practitioner.

 

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

Table of Contents

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Tax Articles

• ATO kicks back on Centrelink’s ‘robodebt’ practice of collecting these purported debts from welfare recipient’s tax refunds
• An EU problem of shareholders getting a double refund of underlying tax, from 2006 to 2011, worth the euro equivalent of $A90 billion – the role of morality in legal interpretation

Legislation

Acts & Bills

• Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 passes Parliament with Senate amendment for 5 year review – attacking ‘creditor-defeating dispositions’, collecting GST estimates and withholding GST refunds
• Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 receives Royal Assent (on 17.2.20)
• Income Tax Assessment Amendment (Exploration for Minerals) Regulations 2020 – Exploration credits allocations for 2020-21 increased by $5m
• Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 – Senate inquiry into Bill which would also change s26-52 prohibition on deductions for foreign bribes (to follow the changes it makes to the criminal law)

Announcements & Drafts

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Cases

High Court

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Full Federal Court

• CofT v Travelex Limited – in a test case the FFC held that taxpayer entitled to interest on the refund of overpaid GST back to 2009 rather than 2012 under the detail in the RBA provisions

Federal Court

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Administrative Appeals Tribunal (AAT)

• Coal of Queensland Pty Ltd v Innovation and Science Australia – R&D – surveys and drilling activities by coal miner were ‘ prospecting, exploring or drilling for minerals’ and not ‘core R&D activities’ under s355-25(2)(b)
• Moltoni v CofT – Commissioner’s refusal to revoke DPO upheld – taxpayer bankrupted over $36m tax liability arising from him being personally assessed on a $21m payment from a company the infamous Mr Oswal controlled to a BVI company the taxpayer controlled
• Schiele v CofT – German working holiday maker not a resident for tax purposes

Other Courts & Tribunals

• Melbourne accountant pleads guilty to creating false invoices – issued to NewSat Limited (adjourned for sentencing)

Appeals

• Burton v CofT – High Court has refused special leave, to the taxpayer, to appeal the decision giving him only a 50% ‘foreign tax credit’ on a capital gain taxed in the US

Rulings

Decision Impact statements

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Rulings

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Determinations

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Law Companion Rulings

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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

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GST 

Legislation & Announcements (GST)

• Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 passes Parliament with Senate amendment for 5 year review – attacking ‘creditor-defeating dispositions’, collecting GST estimates and withholding GST refunds

Cases (GST)

• CofT v Travelex Limited – in a test case the FFC held that taxpayer entitled to interest on the refund of overpaid GST back to 2009 rather than 2012 under the detail in the RBA provisions
• Dobie v CofT – Taxpayer not entitled to input tax credits – lack of documents, on NewStart, not entitled to be registered for GST and 25% penalty correctly imposed

Other (GST)

• GST anniversary: a time to celebrate – or consider a ‘Retail Sales Tax’, which is simpler and has greater integrity – as there are no refunds of input tax credits and no compliance & payments at every stage of supply chain
• Directors Penalty Notice (DPN) regime commences to apply to GST etc on 1 April 2020 – K&L Gates FAQs
• Delays in ATO processing GST property credits – two errors ATO is seeing from lawyers and conveyancers that are contributing to this

Superannuation

Legislation etc. (Super)

• Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 introduced – Eligible rollover funds to exit super industry by 30 June 2021

Cases (Super)

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Other (Super)

• Superannuation – canvassing the very current issue of whether the SGC minimum employer contributions should continue to increase to 12% and other suggestions to increase employee engagement with super
• Government remains committed to increase the SMSF member limit from 4 to 6 but also to increased flexibility measures for members from 65 to 70 years of age
• Self-managed superannuation fund (SMSF) investment strategy – ATO guidance

State Taxes

Legislation & Announcements (State)

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Cases (State)

• Payroll Tax (Vic) – Optical Superstore – High Court refuses leave to appeal the Commissioner’s win in Victorian Supreme Court Court of Appeal

Other (State)

• Vic Transfer Duty – Trusts with ‘foreign’ beneficiaries subject to an 8% uplift of market value – changes in the Victorian SRO’s treatment of discretionary trusts – ‘foreign beneficiaries’ now must be excluded in the deed (effective 1 March 2020)

Other Developments

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

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Base Erosion & Profit Shifting & OECD

• OECD releases a report on Transfer Pricing Guidance on Financial Transactions

Board of Taxation

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Inspector General and other external supervisors

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Miscellaneous

• Arrests made in J5 investigations into money laundering using cryptocurrencies – IRS media releases
• J5 tax chiefs ‘day of action’ and subsequent ‘joint communique’ about closing the net on global tax evasion

Tax Practitioners Board

• TPB review of CPE including a proposal to increase the hours required by over 30% – submissions due 18 March 2020