T a x T e c h n i c a l – M o n t h l y N e w s
– March 2016 Developments –
This is a collection of developments in Australian tax law and practice that occurred in March 2016
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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You are free to use this material, provided you include a link back to the article on this site.
ACTS, BILLS AND ANNOUNCEMES
Acts, Bills & Draft Legislation
Tax Laws Amendment (Norfolk Island CGT Exemption) Bill 2016 – now law
Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015 – receives Royal Assent – Offences created of dealing with accounting documents dishonestly
Higher Education Loan Program (HELP) – notice setting repayment income thresholds and repayment rates
Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 received Royal Assent
Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 – Early Stage Investment Companies: 20% tax offset on up to $200k investments & 10-year CGT exemption
Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016 – introducing a ‘remedial power’ for the Commissioner to exercise by legislative instrument
Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2016 – received Royal Assent as Act No 23 of 2016 – inserting new Subdiv 396-C (after the FATCA provisions)
Announcements
The objective ‘superannuation’ is to be enshrined in law – discussion paper released (creating a ‘savings pool’ already been achieved)
MIT Bills – Senate committee recommends they be passed
‘Backpackers’ Tax’ – Government announces a review of their 2015 Budget Measure to impose treat temporary working holiday makers as non-residents (32.5% tax rate from $1)
OECD releases standardised electronic format for exchange of BEPS Country by Country (CbC) reports of tax information
CASES AND APPEALS
High Court
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Full Federal Court
Seymour v FCT – AAT’s original decision, that taxpayers’ evidence in Part IVC proceedings could be given by video link, overturned, first by the Federal Court and also on appeal
Financial Synergy Holdings Pty Ltd v. Commissioner of Taxation: cost base of asset deemed to be acquired before 20 September 1985 to be calculated as at the actual date of acquisition (taxpayer wins)
Rigoli v. Commissioner of Taxation – Full Court agreed that the taxpayer failed to discharge his onus by only relying on the report the Commissioner used to raise the default assessment
Federal Court
Orica Ltd v FCT – Federal Court found that interest deductions for an international ’round-robin’ were denied by Part IVA
Administrative Appeals Tribunal (AAT)
Re Zhang and FCT – 216 deposits in the taxpayer’s bank account ultimately treated as director’s income
Re The Trustees of the WT & A Norman Superannuation Fund and FCT – AAT finds that s177EA operated to cancel the ‘imputation benefits’ from an SMSF’s ‘dividend washing’ transactions
Other Courts & Tribunals
DCT v Frangieh (No 2) – Secrecy provisions not breached by ATO when tax return tendered in civil matter
Appeals
Appeals news: Cable & Wireless appeals; Agius & Kafitaris discontinue appeals
Re Miley and FCT – Small Bus CGT relief: AAT decided that taxpayer passed the $6m test by applying a discount to actual proceeds on the basis that it was a non-controlling interest (despite control passing by others joining to sell all the shares)
COMMISSIONER’S PUBLICATIONS & NEWS
Decision Impact statements
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Rulings
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Determinations
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Law Companion Guides
LCG 2015/D1 – Purpose, nature and role of ATO’s Law Companion Guidelines – whenever a new law introduces a new regime or unfamiliar concept etc.
LCG 2016/D2 and LCG 2016/D3 – Small Business Restructure Rollover – guide on consequences of rollover and meaning of ‘genuine restructure of an on-going business’
Class Rulings
CR 2016/12 & 13 – No car parking fringe benefit; in-specie distribution on demerging is not a dividend (and anti-streaming rules will not apply)
CR 2016/18-20; PR 2016/2 & addendum – FBT salary packaging arrangements; liquidation of forest MISs; CommBank PERLS VIII Capital Notes; investing in ‘ANZ Cobalt’ and GST on dentist’s supplies
ATO Interpretative Decisions
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Practice Statements
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Practical Compliance Guides
PCG 2016/D1 – Practical Compliance Guidelines – Draft to introduce the ATO’s new product: advising defacto ‘safe harbours’ in terms of allocating audit resources (‘swim between the flags’)
Tax Alerts
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Interpretation of statutes – guidance from Courts (TCN)
Statutory interpretation – ATO releases Episode 10 of ‘interpretation NOW’
Other ATO news or statements
Austrac proposes to increase the threshold value of shares sold for charitable purposes from $500 to $10,000 – but wishes to consult about the AML/CTF risks
GIC & SIC rates: ‘base rate’ 2.28%; SIC 5.28% (br+3%pts); GIC 9.28% (br+7%pts) – 1 April to 30 June 2016
Significant entities ($1b global turnover) who may be affected by the Multinational Anti-Avoidance Law – should contact the ATO by 31 March 2016
ATO releases tax information on over 300 Australian-owned private companies
Car expense deductions: ATO information about the move to a single 66¢/km rate from 1 July 2015, with alternative 3 rate option for the 2016 FBT year (ended 31 March 2016)
GST DEVELOPMENTS
Legislation & Announcements (GST)
Taxation and Superannuation Laws Amendment (2016 Measures No 1) Bill 2016 – ‘Netflix’ changes to GST etc. – update on passage to legislation
GST – taxing digital imports (Netflix tax) & cross-border amendments – Committee reports in favour of passing the Bill
Cases (GST)
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Rulings, Announcements, Etc (GST)
GSTD 2016/D1 – GST: incorrect increasing adjustments for supplies – the Commissioner proposes to rule that Div 142 would preclude a refund unless the ‘excess’ has been refunded to the recipient
SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
Treasury Legislation Amendment (Repeal Day 2015) Bill 2016 – Sched 1 removed (SGC simplifications removed)
Superannuation Legislation Amendment (Choice of Fund) Bill 2016 – freedom to chose superannuation fund extended to employees under enterprise agreements / workplace determinations made after 1 July 2016
Cases (Super)
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Rulings & Other things (Super)
Indexed superannuation rates and thresholds for 2016-17 – calculated by adjustment under the recently released ‘AWOTE’ index numbers
Treaty residence of pension funds – OECD releases discussion draft on its model treaty
SMSF and collectables – I July 2016 deadline looming for storing them etc (SIS Reg 13.18AA)
SME employers to be ready for electronic ‘SuperStream’ contributions to superannuation funds by 30 June 2016 – ATO reminder
SMSFs that receive trust distributions – ATO is reviewing for ‘non-arm’s length income’ purposes (beware)
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR
ACNC will be retained by the Government (Earlier announcement reversed)
BOARD OF TAXATION
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EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.
External scrutiny of ATO: Tax Inspector-General submission to Parliamentary Committee
TAX PRACTITIONERS BOARD & LEGISLATION
Change in tax agent practice structure – TPB advises technical requirements for agents
STATE TAXES
Legislation & Announcements (State)
NSW: State Revenue Legislation Amendment Bill introduced – widen Council payroll tax exemption; make further provision for ‘corporate reconstruction’ duty relief
Cases (State)
Qld payroll tax: Can Barz Pty Ltd & Anor v Comr of State Revenue & Ors – garnishee notices to purchasers of trust property invalid
Rulings & Other (State)
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OTHER DEVELOPMENTS
Forestry & Agricultural MIS – Senate Economics Committee’s report after the collapse of Timbercorp, Great Southern and others – 24 recommendations
[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; ‘TTI Vine’: The Tax Institute’s Tax Vine.
