Tax Month – March 2018

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

– March 2018 Developments –

This is a collection of developments in Australian tax law and practice that occurred in March 2018
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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ACTS, BILLS AND ANNOUNCEMENTS

Acts, Bills & Draft Legislation

• Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 2) Bill 2018 – CGT changes – excluding non-residents from ‘main residence’ exemption; avoiding double counting for Div 855 ‘principal asset’ test; additional 5% discount for ‘low cost housing’
• Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018 – proposing 6 measures: the ‘deductible liabilities measure’; the ‘deferred tax liabilities measure’; the ‘securitised assets measure’; the ‘churning measure’; the ‘TOFA measure’ and the ‘value shifting measure’
• Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 – Senate Economics Legislation Committee Report: pass it, review its operation later (and still no ‘bounty’)
• Treasury Laws Amendment (2018 Measures No 2) Bill 2018 – various amendments to the requirements for venture capital tax concessions – Early Stage VCLP and ‘Early Stage Innovation Companies’ & Committee Report

Announcements

• Labor’s proposal to abolish refunds of unused franking tax off-sets & subsequent exemption for pensioners – protests from SMSFs and self-funded retirees continue
• Immediate 20% write-off for assets over $20,000 proposed by Labor, with remaining 80% depreciated from the first year – not Div 43 capital works, R&D items or passenger cars
• KPMG’s report on the ‘black economy’ – 10 steps for the ATO to collect missing revenue

BASE EROSION & PROFIT SHIFTING (BEPS)

• Common Reporting Standard (CRS) avoidance – OECD adopts tax disclosure rules for advisors as an ‘anti-avoidance’ approach
• EU proposing to ‘go it alone’, in taxing ‘digital’ services, whilst waiting for OECD/G20 multi-lateral initiatives to tax these services
• Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018 – to give force of law to the MLI in Australia, which in turn defines when it comes into force and takes effect

CASES AND APPEALS

High Court

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Full Federal Court

• DCT v Rennie Produce (Aust) Pty Ltd (in liq) – ATO s355-10 (old s264) notice to produce documents ‘trumps’ liquidator’s “Harman obligation” not to use documents produced, under other proceedings, for another purpose

Federal Court

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Administrative Appeals Tribunal (AAT)

• MWYS v CofT – Profits within a ‘dual listed’ structure, were only CFC attributable, on purchases from the Australian side of the structure because the dual-listed companies were not CFC ‘associates’
• LLUN v CofT – AAT finds that a string of tax haven transactions created tax liabilities – Funding for Deregistered Vanuatu company; NZ capital gain; Rollover of NZ Welfare Fund into Samoan Super Fund, including a ‘guest appearance’ by Hua Wang Bank Berhad
• Coventry v CofT – DFAT employee’s overseas earnings exempt from Australian tax, under s23AG, because diplomatic immunity was not ‘the only’ reason for no Pakistani tax (and draft DIS)

Other Courts & Tribunals

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Appeals

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COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

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Rulings

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Determinations

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Law Companion Rulings

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Class Rulings & Product Rulings

• Product Ruling PR 2018/4 – Perpetual WealthFocus Fund; on electing into the ‘Attribution Managed Investment Trust (AMIT) regime – ‘single unit’ structure respected for CGT purposes

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

• Capital Gains Tax (CGT) withholding regime – ATO updates its webpage on ‘clearance certificates’ for trustees
• Promoter of ‘tax exploitation’ R&D tax schemes ordered to pay $4.25m in civil penalties and give undertakings

GST DEVELOPMENTS

Legislation & Announcements (GST)

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Cases (GST)

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Rulings, Etc. (GST)

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SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

• Labor’s proposal to abolish refunds of unused franking credit tax off-sets – provoking an avalanche of debate and howls of protest from SMSFs and self-funded retirees

Cases (Super)

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Rulings & Other things (Super)

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

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BOARD OF TAXATION

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EXTERNAL SUPERVISORS – IGT, JCPAA & ANAO etc.

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TAX PRACTITIONERS BOARD & LEGISLATION

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STATE TAXES

Legislation & Announcements (State)

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Cases (State)

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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’.