T a x T e c h n i c a l – M o n t h l y N e w s
– July 2017 Developments –
This is a collection of developments in Australian tax law and practice that occurred in July 2017
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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COMPILING NOW
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ACTS, BILLS AND ANNOUNCEMENTS
Acts, Bills & Draft Legislation
Draft ‘housing affordability’ law – to implement a ‘First Home Super Saver Scheme (where up to $30k can be withdrawn from a superannuation fund to pay a deposit on a first residence) and also a ‘Main Residence Downsizing Scheme’ (where up to 2 people can make a non-concessional superannuation contribution, of up to $300k each)
CGT changes – excluding non-residents from the ‘main residence’ exemption; imposing CGT on non-residents for CGT events happening to their ‘membership interests’ by calculating ‘taxable Australian real property (TARP) under the ‘principal asset test’ in s855-30 on an ‘associate inclusive’ basis
Tax Administration Act – exposure draft of ‘re-landscaped’ regulations released for feedback – substance is not meant to change
Announcements
Adult Beneficiaries of ‘discretionary trusts’ will be taxed at a minimum rate of 30% under a Labor Government – avoiding the bulk of income splitting without grasping the nettle of taxing (all) trusts as companies
BASE EROSION & PROFIT SHIFTING (BEPS)
OECD releases its updated 2017 Transfer Pricing Guidelines for multinational enterprises and tax administrations – application of the “arm’s length principle” post BEPS changes
OECD releases draft contents of 2017 update to OECD Model Tax Convention – seeking comments on particular portions
OECD releases The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) Matching Database – software beta version
OECD & G20 release report on ‘Branch Mismatches’ – where different jurisdictions have different rules for recognising branches or allocating profits between them (similar issues to ‘Hybrid Mismatches’)
CASES AND APPEALS
High Court
Anglo American Investments Pty Ltd v DCT – High Court refuses special leave to appeal – attempting to defend collection on the basis allegations of ‘conscious maladministration’ (from using illegally obtained material to assess) ineffective because judicial review on this point not commenced
Full Federal Court
Federal Court
Nelson v FCT – trustee taxpayer failed to injunct s353-10 notices, to give sworn evidence, because she failed to establish a prima facie case that the interviews would imperil the integrity of an imminent Part IVC appeal against s100A assessments (relating to gifted trust income entitlements) – s14ZYA notice given to determine the trustee’s objection within 60 days
Administrative Appeals Tribunal (AAT)
Other Courts & Tribunals
Appeals
Taxpayers appeal in Normanby Finance (loan shams); Sunraysia Harvesting (PAYGw avoidance) and Peter Sleiman Investments (Default Assessments) and the Commissioner appealed in Hacon (Private Ruling Request declined)
COMMISSIONER’S PUBLICATIONS & NEWS
Decision Impact statements
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Rulings
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Determinations
Law Companion Guides
LCG 2017/D6 – ATO’s guidance on the new ‘similar’ business rule for carrying forward company tax and capital losses under the ‘innovation’ Bill passing through Parliament
Class Rulings & Product Rulings
CR 2017/44: scrip-for-scrip roll-over; CR 2017/45: returns of share capital; CR 2017 2017/46: demerger roll-over
ATO Interpretative Decisions
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Practice Statements
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Practical Compliance Guides
PCG 2017/13 – Div 7A: Unpaid Present Entitlement (UPE) sub-trust invested in 7 year interest only loan to main trust maturing in 2017 or 2018 fYears must be repaid or refinanced on a complying 7 year principal and interest loan
Tax Alerts
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Other ATO news or statements
ATO advice on how the ‘Common Reporting Standard’ (CRS) affects ‘Not-for-Profit’ organisations
ATO now accepting Country-by-Country lodgements electronically
ATO investigating unexpected tax refunds
ATO garnishees and freezing orders – ATO is seeking feedback and wishes to consult
GST DEVELOPMENTS
Legislation & Announcements (GST)
VM 2017/D1 – Goods and Services Tax: Valuable Metals Market Value Determination 2017 – a draft determination of the s86-10(3) method by which taxpayers may determine the ‘market value’ of ‘Valuable Metals’ in goods supplied for the purposes of determining whether there is a s86-5 ‘reverse charge’ liability of the recipient of the goods
Cases (GST)
GH1 Pty Ltd, in Liquidation and Commissioner of Taxation – AAT denied ITC’s in the face of the Commr’s audit evidence that the credits related to earlier work and credits already claimed – ‘tax invoices’ and MYOB accounting entries do not evidence a supply in the period and Comm’r has no evidentiary onus – related party taxpayers should have given evidence
Rulings, Etc. (GST)
GSTD 2017/1 – GST: supply of credit card facility – use of card overseas is GST-free
SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017 & related SCG Bill – an exposure draft of legislation to increase accountability of superannuation funds – especially poorly performing ‘MySuper’ funds and to stop salary sacrificed super counting towards the employer’s SGC mandatory minimum level of employer super contributions
Superannuation Complaints Tribunal (SCT) to be amalgamated with other bodies into the new ‘Financial Complaints Authority’ to commence 1 July 2018
Cases (Super)
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Rulings & Other things (Super)
Super fund mergers and wind-ups: APRA guidance finalised
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR
ACNC revokes charity status of 3 organisations: African Australian Network Limited; Global Helping Hands Foundation – Australia; Immigrant Womens’ Health Information Service Inc. for reasons it can’t state because of its secrecy obligations
BOARD OF TAXATION
EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.
IGT releases new newsletter – ‘IGoT News!’ – covering complaints handling, their reviews, the ATO’s fraud control management; other IGT reviews; taxpayer engagement; unpaid superannuation; taxpayer rights and protection; engaging with the tax profession
IGT has extended the time for making submissions on its investigation into fraud control in the ATO (until 4 Aug 2017)
TAX PRACTITIONERS BOARD & LEGISLATION
TPB statement regarding its approach to recognised professional associations – eligibility via membership or directly if RPA fails accreditation
Appointments to the TPB – including Ms Sotiropoulos: a Tax Barrister at the Victorian Bar
STATE TAXES
Legislation & Announcements (State)
Cases (State)
Rulings & Other (State)
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OTHER DEVELOPMENTS
CPI: 0.2% increase for the June quarter 2017; 1.9% increase for year to 30 June 2017 – relevant for indexation factor for FBT purposes
[i] Sources – abbreviations: ‘ATOlpr’: ATO Legal Professions Relationships emails; ‘IT’: Inteliconnect Tracker (CCH); ‘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; TX: Tax Week (Thomson Reuters); ‘Vine’: The Tax Institute’s Tax Vine.
