Tax Month – February 2022

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

– February 2022 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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Legislation

Acts & Bills

• Bill introduced to allow the AAT to stay ATO collection proceedings whilst the AAT reviews the Commissioner’s objection decision
• Modernising Business Communications Bill introduced – allowing electronic execution of documents, sending documents etc.
• Budget super measures and temporary full expensing of capital expenses – Bill passed
• Bill to introduce CCIV & Super ‘retirement income covenant’ – report of Senate Committee (pass the Bill promptly)

Announcements & Drafts

• Covid-19 Rapid Antigen Tests (RATs) costs to be made deductible (if work related) and FBT exempt – Assistant Treasurer announces

Cases

High Court

• ZG Operations v Jamsek – on the same day the High Court reached the opposite conclusion to the CFMEU case (on an ’employee/contractor’ issue) but for the same ‘primacy of contract’ reasons
• CFMEU (and contractor) v Personal Contracting Pty Ltd – High Court holds contractor was an ’employee’ (despite ‘contractor’ label) but basis for this finding was ‘seismic’
• Employee vs independent contractor: High Court rules contract is the source of the analysis (not subsequent conduct)
• Appeals update: Peter Greensill Family Co Pty Ltd (taxpayers’ High Court special leave refused)

Full Federal Court

• Facebook Inc v Australian Information Commissioner – Facebook carried on business in Australia by installing cookies on local computers and providing Australian ‘app’ developers and interface

Administrative Appeals Tribunal (AAT)

• Whiddon v CofT – Foreign source gain from share swap assessable as ordinary income for taxpayer who had become resident
• Mobbs v CofT – Payments and shares issued to a company providing individual’s services as a director, treated as individual’s income

Rulings

Rulings

• Draft TR 2022/D1 and Draft PCG 2022/D1 – ATO’s well signalled s100A and Trust ‘reimbursement agreements’ guidance

Determinations

• TD 2022/D1 – Division 7A: revised ATO view on UPEs and sub-trusts

Practical Compliance Guides

• ATO releases long awaited new guidelines for professional firms but uncertainty remains for many – PCG 2021/4

Other ATO news or statements

• ATO consultation report – for months of December 2021 and January 2022

Superannuation

Legislation etc. (Super)

• Budget super measures and temporary full expensing of capital expenses – Bill passed

Cases (Super)

• CofT v Coronica – ATO wins appeal on SMSF trustee disqualification

Other (Super)

• AIST call to cap super balances at $5m – the existing system is ‘inequitable’ and ‘unsustainable’
• AIST calls on Government to use Budget to improve super system
• SMSF Association’s Pre-Budget Submissions – simplify super TBCs & TSB caps; NALE; index SB CGT thresholds; non-geared unit trust rules; and unused concessional cap

State Taxes

Cases (State)

• Perpetual Corporate Trust Ltd v Commissioner of State Revenue (SA) –  student accommodation exempt from SA land transfer duty – 1 semester stays too short to be ‘residential’ (GST meaning adopted)

Other Developments

COVID-19 related matters

• North Australian Contracting Pty Ltd v CofT – No JobKeeper benefits because associated entities were not part of the same group and could not carry on the same business
• Tax deductibility of COVID-19 test expenses – what is the existing law and are the proposed ITX and FBT changes necessary (yes)
• Covid-19 Rapid Antigen Tests (RATs) costs to be made deductible (if work related) and FBT exempt – Assistant Treasurer announces
• Update on JobKeeper data – to protect secrecy of taxpayer data, Commissioner proposes alternative data go to Senate Committee

Miscellaneous

• Tax Institute’s pre-budget submissions – 25% rate for all companies, standard deduction for work related expenses, replace FBT, uniform State and Federal ‘worker’ definition, etc.

Tax Articles

• Section 100A, Division 7A & Tax Alert on trust distributions to family members: the new guidance – TR 2022/D1, PCG 2022/D1, TA 2022/1 & TD 2022/D1
• ‘Alarm bells ringing’ on ATO trusts tax crackdown – reimbursement agreements, deemed dividends & distributions to adult and minor children
• Section 100A and Division 7A: looking back down the path to the ATO’s imminent new draft guidance (for consultation)

 

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ATW – Australian Tax Week (CCH); LTN – Latest Tax News (Thomson Reuters); TaxVine – The Tax Institute weekly email.