Tax Month – January 2022

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

– January 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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COVID-19 related matters

• MJ and IT Holdings Pty Ltd v CofT – no ‘cash flow boost’ available – $25k journaled directors payment breaches integrity rule
• RWPY v CofT – Promotional makeup artist not eligible for JobKeeper – not carrying on a business
• DGSC v CofT – individual was not eligible for JobKeeper benefit as self-employed because she first gave notice to her part-time employer
• FFYS v CofT – Individual suffering decline in AirBnB bookings not entitled to ‘JobKeeper’ – not a ‘business- and ‘input taxed’ receipt outside ‘decline in turnover’ test
• Yazdani v CofT – Small business gardener not entitled to JobKeeper because he had no ‘taxable supplies’ in the r11(8) period
• JobKeeper – new amending regulations to allow payments after 31.3.22 etc.

Legislation

Acts & Bills

• Draft Legislation to extend the power of the AAT to pause or modify ATO debt recovery action – Treasury consultation
• Certain clinical trials to be accepted as core R&D activity – draft determination and explanatory statement for consultation
• Employee share schemes: changes to regulatory requirements in Corporations Act – draft legislation

Cases

Full Federal Court

• CofT v Shell Energy Holdings Australia Ltd – immediate s40-80 deduction for $2.3b costs of acquiring interests in the ‘Browse’ exploration project – ATO loses appeal

Administrative Appeals Tribunal (AAT)

• Buzadzic v CofT – AAT upholds amendments to husbands assessments (unexplained deposits, Div 7A dividends etc.) but allowed the appeal of the wife (deposits belonged to husband)

Rulings

Decision Impact statements

• Addy case – ATO issues decision impact statement on its loss in the High Court – ‘backpacker tax’ struck down as ‘discriminatory’ under DTA (brace yourself Mr Commissioner)

Other ATO news or statements

• McDonald’s conviction for failure to deliver documents as required by notice

GST 

Cases (GST)

• Decleah Investments Pty Ltd & Anor v CofT – GST: taxpayer’s margin scheme valuation confirmed – despite discounting from actual sales and expenses

Rulings, Etc. (GST)

• When does a renovation make used residential premises new again – a 50% Canadian statutory solution?

Superannuation

Cases (Super)

• ASIC v Statewide Superannuation Pty Ltd – Statewide Super ordered to pay $4m penalty for letting group life cover laps, misleading members about this, charging premiums and not reporting it
• Khanna v CofT – No deduction for personal super contribution – taxpayer gave fund s290-170 notice over 1 year late (no discretion to extend)
• The Trustee For Virdis Family Trust t/a Rickard Heating Pty Ltd v CofT – Super guarantee: plumber an “employee” under extended meaning
• Frigger v Trenfield (No 10) – Certain assets not held in SMSF so divisible among creditors of bankrupt estates

Other (Super)

• Actuaries’ suggestions to improve the ATO’s ‘MySuper’ comparison tool and extend it to ‘choice’ funds

State Taxes

Cases (State)

• Vic Duty – ANO Property Pty Ltd v Comr of State Revenue – Transfer of farm for benefit of SMSF denied exemption from land transfer duty under the Family Farm Exemption – no ‘relatives’ as beneficiaries

Other Developments

Base Erosion & Profit Shifting & OECD

• OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations – guidance on the application of the “arm’s length principle”
• OECD releases ‘Pillar Two’ model rules for 2022 local introduction – minimum 15% international tax (2nd of ‘two-pillar’ response to digitalisation of economy)

Inspector General and Ombudsman and other external supervisors

• IGTO invites submission on its 3 investigation – ATO’s management of objections; exercise of its general powers of administration; and exercise of the Remedial Power

Miscellaneous

• Tax Institute’s ‘State of Tax Policy Report: December 2021’ (for Members Only)
• Electronic surveillance reform – should the ATO be given ‘bugging’ powers?
• What’s on the radar for 2022 – some technical issues to follow

Tax Practitioners Board

• Cerrah v TPB – AAT confirms Board’s decision to deregister tax agent but it reduced the 5 year ban on reapplying to 4 years
• Thanabalasingam v TPB – employee working remotely, no evidence of supervision and ‘supervisor’ was deregistered for lack of supervision

 

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