T a x T e c h n i c a l – M o n t h l y N e w s
– March 2017 Developments –
This is a collection of developments in Australian tax law and practice that occurred in March 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
Diverted Profits Tax Bills pass Lower House and move to Senate – 40% tax on profits diverted by ‘significant global entities’ to jurisdiction with less than 80% of our tax rate – nasty dispute resolution features too
Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 – passes the Senate with 6 agreed Govt amendments – passing the Govt’s Corp Tax Cut plan: 27.5% in 2017 (sub-$10m turnover); 2018 (sub-$25m) and 2019 (sub-$50m)
Insolvency reforms (the ‘Innovation Package’) – issue of exposure draft proposing exemption from ‘insolvent trading’ for directors in reasonable restructures and a stay on ‘ipso facto’ clauses (triggered by insolvency)
Announcements
Stapled securities: Treasury issues consultation paper
BASE EROSION & PROFIT SHIFTING (BEPS)
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CASES AND APPEALS
High Court
Tech Mahindra Limited v FCT – High Court refused taxpayer’s application to appeal – Full Federal Court decision stands that work performed from Indian PE was taxable in Australia as a ‘know-how’ based ‘royalty’
Full Federal Court
FCT v Normandy Finance and Investments Asia Pty Ltd (No 2) – Full Court: Commissioner awarded only partial costs for “inefficient” running of appeals
Federal Court
Sandini Pty Ltd v FCT CGT: s126-15 breakdown of marriage CGT rollover available for transfer of mining shares from a trust controlled by one former spouse to a trust controlled by the other former spouse under Court order
Administrative Appeals Tribunal (AAT)
Re Walker and FCT – Deductions for travel, accommodation, food not allowed as taxpayer not an itinerant worker
Re Davy and FCT – Work-related travel deductions in excess of actual expenses disallowed – the ‘maximum reasonable amount’ is just an exception from the substantiation amount (and not a license to claim more than incurred)
Re The Study and Prevention of Psychological Diseases Foundation Incorporated and FCT – Revocation of tax exempt status applies from date of original endorsement
Other Courts & Tribunals
DCT v Frangieh (No 3) – Taxpayer fails in claim of conscious maladministration against DCT
Appeals
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COMMISSIONER’S PUBLICATIONS & NEWS
Decision Impact statements
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Rulings
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Determinations
TD 2017/2-6 – FBT rates and thresholds for 2017-18 FBT year
TD 2017/7 – Freshwater crayfish are trading stock
TD 2017/8 – Cost of travelling to have a tax return prepared is deductible – if unrelated purposes of the travel are appropriately apportioned
Law Companion Guides
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Class Rulings & Product Rulings
CR 2017/19-20 – FBT and E-logbook; employment termination payment
ATO Interpretative Decisions
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Practice Statements
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Practical Compliance Guides
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Tax Alerts
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Other ATO news or statements
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GST DEVELOPMENTS
Legislation & Announcements (GST)
GST-free child care for ‘long day care’ and ‘in-home care’ continues to be GST-free after previous determinations by the Minister replaced by new s38-150(e) determination
Cases (GST)
Trustee for the Whitby Trust and FCT – $2m price of option not added to the $26m paid for the purposes of the ‘margin scheme’ – not ‘consideration for [the] acquisition’ of the real property
Re The Norwestern Trust and FCT – GST: GST shortfall validly assessed (because of fraud or evasion) and no remission allowed for the $279k 75% penalty (for failure to lodge) – 13 reminders and still failed to lodge
Rulings, Etc. (GST)
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SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
The Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017 – registered
Cases (Super)
Re Mills v FCT – post-Ward’s case but still no “special circumstances” to remit excess super tax – UK pension into another fund, a year later than intended, pushed the $180k contribution over the limit without the fund knowing
Rulings & Other things (Super)
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR
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BOARD OF TAXATION
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EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.
Tax Inspector-General announces review of PAYG instalments system
TAX PRACTITIONERS BOARD & LEGISLATION
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STATE TAXES
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Cases (State)
Vic Land Tax – Lotus Projects Pty Ltd v Commissioner of State Revenue (Vic) Part of development used as golf course not exempt from land tax – reasons bear examination
Vic land tax: Frontlink Pty Ltd v Comr of State Revenue – taxpayer’s appeal dismissed re primary production exemption – failed largely on failing to discharge onus
Rulings & Other (State)
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OTHER DEVELOPMENTS
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[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.
