Tax Month – June 2014

M o r g a n’ s   T a x   M o n t h

– June 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in June 2014 and which aims at being of relevance to tax lawyers.*

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

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Tax Laws Amendment (2014 Measures No 1) Bill 2014 receives Royal Assent: (1) limited refunds of overpaid GST; & (2) farm management deposits improved [1]

*Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 – Anti-dividend washing, discontinued measures protection [2]

*Tax and Superannuation Laws Amendment (2014 Measures No. 3) Bill 2014 passes House of Reps – restrictions on dedn for mining rights and information [3]

FATCA Agreement Implementation Bill 2014 – passes into law [4]

*Budget deficit levy Bills pass into law [5]

*Paid Parental Leave Amendment Bill pass House of Reps [6]

*Carbon Tax and Mining Tax repeal Acts re-introduced [7]

*Green Army allowance subject to withholding (but no super guarantee) – Regs amended [8]

*Service with ADF in Afghanistan tax-exempt and closure of the AVO (consequential changes): Regulations amended [9]

*Revised Switzerland-Australia Double Tax Treaty signed and draft legislation to make it law released [10]

*Effective life of depreciating assets: new determination made [11]

*Requirement to lodge 2014 returns: legislative instruments made [12]

*Withholding Schedules for 2014-15 year released [13]

 

Announcements

*Tax dispute inquiry announced by House of Representatives Tax Committee [14]

*AUSTRAC signs finance intelligence exchange agreement with Peru [15]

*Abbott Government’s Commission of Audit – final report tabled [16]

*PAYG instalment threshold changes to start on 1 July 2014 [17]

 

 

CASES AND APPEALS

High Court

*Howard v FCT – Damages assessable to taxpayer director personally [18]

 

Full Federal Court

*FCT v Hunger Project Australia – Organisation for relief of hunger found to be a PBI – merely by raising funds and not delivering direct relief [19]

*PTTEP Australasia (Ashmore Cartier) Pty Ltd v FCT – Taxpayer wins appeal on calculation of taxable profit under the PRRT Assessment Act [20]

 

Federal Court

*International Litigation Partners Pte Ltd v FCT – Commissioner denied access to documents in Family Law proceedings [21]

*Re Sisley and FCT – Excess super assessments stand: no special circumstances [22]

 

Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Dempsey and FCT – Taxpayer not an Australian resident for tax purposes [23]

*Re Moignard and FCT – Taxpayer not presently entitled to profit from sale of premises deposited in his account [24]

*Re Power and FCT – Serious hardship claim refused [25]

*Re Huckle and FCT – Serious hardship claim refused [26]

*Re Mack and FCT – Trust distributions through interposed beneficiary a sham – assessments affirmed [27]

*Re Ogden and FCT – Large claims for work-related and investment deductions reduced significantly [28]

*Re Van Gestel and FCT – Alleged identity fraud in BAS: Tribunal has jurisdiction to review [29]

*Re RepairCo and FCT – No deductions for contributions to employee welfare fund – and assessments within time [30]

 

Other Courts & Tribunals

Appeals

*Australian Pipeline Limited as Responsible Entity for the Australian Pipeline Trust v FCT – taxpayer withdraws appeal – entity an ‘associate’ before joining consolidated group [31]

*Blank v FCT (No 2) – taxpayer appealed decision of Edmonds J not to re-open the decision he was assessable on international sums held to be deferred remuneration [32]

*Re Qantas Airways Ltd and FCT – taxpayer appeals adverse car parking FBT assessment decision [33]

*FCT v Resource Capital Fund III LP – taxpayer seeks leave to appeal to the High Court from DTA and valuation decision [34]

*FCT v Darling – Husband has applied for special leave to appeal to the High Court: Commissioner should not have access to Court documents for an audit [35]

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements.

*Fishermen joint venturers not ‘employees’ for super (SGC) purposes: ATO view on AAT case: Re Dominic B Fishing Pty Ltd and FCT [36]

 

Rulings

TR 2014/3 – Income from a ‘permanent establishment’ O/S, represented by substantial equipment, not ‘NANE’ under s23AH unless carrying on business [37]

TR 2014/4 – Effective life of depreciating assets from 1 July 2014 [38]

 

Determinations

*TD 2014/13 – Voting power and the UK DTA [39]

*TD 2014/14 – Deductibility of capital support payments [40]

*TD 2014/15 – R&D: deductibility of design expenditure [41]

*TD 2014/16 – Capital gains: improvement threshold 2014-15 is $40,443 [42]

*TD 2014/17 – Car depreciation limit 2014-15 is $57,466 [43]

*LCTD 2014/2 – Luxury car tax threshold for 2014-15: is $61,884 or $75,375 for a fuel-efficient car [44]

 

Class Rulings & Product Rulings

CR 2014/46 – Capital notes [45]

CR 2014/47-48 – Lifetime care and support scheme; transfer payments [46]

CR 2014/49 – Rugby Union education payments not assessable [47]

CR 2014/50-53 – Return of capital; early retirement schemes [48]

PR 2014/9-11 – Option and loan facility; home buy savings account; timber project [49]

PR 2014/12 – Almond project [50]

 

 

ATO Interpretive Decisions (ATOIDs)

Practice Statements

Draft Practice Statement PS LA 3624 released on Administrative Penalties under s284-75(3) of the TAA1 [51]

 

Tax Alerts

Other ATO news or statements

Project Wickenby: AUSTRAC funds flow analysis 2012-13 [52]

ATO ready to trial external compliance assurance process: ATO Commissioner [53]

Audit improvements from outside the ATO will be adopted more widely in the ATO: Commissioner’s speech [54]

Individuals warned to get work-related deductions right: ATO [55]

*Tax Office website updates – including administrative treatment for abolition of $6,500 write-off which has not yet been repealed [56]

*External compliance assurance process: ATO releases more details [57]

*AUSTRAC releases Circular on ATO Project DO IT (Do it before 19.12.14) [58]

*ATO steps up data mining program to target offshore tax evaders [59]

*Div 7A: private company loans – 2014-15 benchmark interest rate is 5.95% (down from 6.20%) [60]

*GIC and SIC rates for Jul-Sep 2014 quarter are 9.69% and 5.69% respectively [61]

*PAYG instalments – GDP adjustment for 2014–15 is 4% [62]

*2013-14 tax return forms, schedules, and accompanying guides released [63]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

*Tax Laws Amendment (2014 Measures No 1) Bill 2014 receives Royal Assent: (1) limited refunds of overpaid GST [64]

 

Cases (GST)

*Re Dotrac Pty Ltd & Ors and FCT – GST: no enterprise re property development, so input tax credits refused [65]

*Re North Sydney Developments Pty Ltd and FCT – GST: taxpayer’s letter to the ATO was a sufficient s105-55 ‘stop the clock’ notification of ITC entitlement [66]

Re Advent 7 Pty Ltd and FCT – ITC claims denied as they were not substantiated [67]

 

Rulings & Other things (GST)

Fishermen joint venturers not ‘employees’ for super (SGC) purposes: ATO view on AAT case: Re Dominic B Fishing Pty Ltd and FCT [68]

 

SUPERANNUATION DEVELOPMENTS

 

Legislation, Announcements etc. (Super)

 

Cases (Super)

*Re Vuong and FCT – Super accessed early assessable, but penalty remitted [69]

Rulings & Other things (Super)

 

 

CARBON TAX & EMISSIONS REDUCTION FUND

Carbon Tax repeal Acts re-introduced [70]

 

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

The Mining Tax repeal Act re-introduced [71]

 

 

AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR

ACNC repeal Bill should be passed on recommendation of Senate committee divided along party lines [72]

*ACNC reminders for charities – lodge their 2013 Annual Information Statement by 30.6.14 or risk removal from register and loss of tax exemption [73]

 

 

BOARD OF TAXATION

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

*Transfer pricing report by IGoT released by Minister – ATO management of these issues criticised [74]

ATO risk identification re high wealth individuals can be improved: ANAO [75]

Measuring effectiveness of ATO compliance activities can be improved: ANAO review [76]

*Large business and high wealth individual tax disputes: IGT review [77]

*Administration of the ABR can be improved: ANAO report [78]

ANAO releases report on audit of agencies’ ICT systems to prevent cyber attacks [79]

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

‘Tax (financial) advisers’ may register with the TPB (by notifying) between 1 July 2014 to 31 December 2015 or provide a disclaimer [80]

Registration requirements for tax (financial) advisers – draft regs released [81]

Ayles v Tax Practitioners Board – Court confirms refusal to register – humanities degree not relevant [82]

 

 

STATE TAXES

Legislation & Announcements (State)

ACT: payroll tax and land tax changes: Amendment Bills introduced [83]

NSW Budget 2014-15: abolition of business taxes; WorkCover; first homebuyers [84]

Qld Budget 2014-15: family farm succession planning; home land tax exemption; etc [85]

Tas: Payroll Tax Rebate; First Home Owner Grant: Amendment Bills update [86]

Vic: Budget and Other Measures Bill receives Royal Assent [87]

WA: Revenue Laws Amendment Bill update [88]

WA: Taxation Legislation Amendment Bill 2014 introduced to narrow the definition of ‘fourth limb’ charities – so ‘Chamber of Commerce’ can’t qualify [89]

 

Cases (State)

NSW land tax: Vartuli & Anor v Chief Comr of State Revenue – primary production land tax exemption refused [90]

NSW land tax: Vowles Properties Pty Ltd v Chief Comr of State Revenue – primary production land tax exemption denied [91]

NSW land tax: R&E Drafting Pty Limited v Chief Comr of State Revenue – primary production exemption refused [92]

 

Rulings & Other (State)

Qld: request for Commissioner assessment – Public Ruling updated [93]

Qld payroll tax: 2013-14 annual return available for completion, lodgement and payment by 21 July 2014 [94]

SA stamp duty: off-the-plan concession changes [95]

Vic payroll tax: 2013-14 Annual Reconciliation is available to be lodged and paid by 21 July [96]

 

 

OTHER DEVELOPMENTS

FoFA amendments: Senate committee recommends Bill be passed, but provisions be clarified [97]

FoFA amendments: Govt sets out the way forward [98]

FoFA amendments: Regulation registered to implement time-sensitive changes [99]

*Automatic exchange of tax info re financial accounts: Treasury discussion paper [100]

*ACCC takes action against tax agent travelling to Indigenous communities [101]

 

 

THE END
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