M o r g a n’ s T a x M o n t h
– May 2014 Developments –
This is a collection of developments in Australian tax law and practice that occurred in May 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
________________________________________________________________________
FEDERAL BUDGET 2014-15
*Budget deficit levy (tax) of 2% to apply for 3 years from 1 July 2014 for incomes over $180,000; FBT rate increase [1]
Medicare levy thresholds for families increased for 2013-14 from $33,693 to $34,367 [2]
*Announced but unenacted measures: further progress – charities; s 25-90; consolidation; foreign residents; etc [3]
*SME instant asset write-off up to $6,500 – small businesses still in limbo over threshold [4]
Reduction in R&D offset rates by 1.5% – refundable from 45% to 43.5% and non-refundable from 40% to 38.5% [5]
Employee share scheme tax rules – reform put on hold [6]
Other tax-related changes flowing from carbon tax and mining tax repeal leave taxpayers in limbo [7]
Mining interest realignments – joint venture partners [8]
Refundable tax offset for “greenfields” exploration costs [9]
Seafarer offset to be abolished [10]
*Option to withdraw excess non-concessional contributions [11]
*Super Guarantee rate will rise to 9.5% from 1 July 2014 (instead of being paused at 9.25%) and then will pause until 30 June 2018 [12]
Age Pension age to increase to 70 by 2035 [13]
Index Pension and Pension Equivalent Payments by the CPI instead of Total Average Weekly Earnings [14]
Hiring Australians 50 years or over – new subsidy for employers [15]
*Inspector-General of Taxation to hear tax complaints [16]
ACTS, BILLS AND ANNOUNCEMENTS
Acts & Bills
*Temporary Budget Repair Levy: Bills introduced [17]
*Tax Laws Amendment (2014 Measures No 1) Bill 2014: GST excess refunds; farm management deposits [18]
*Tax and Superannuation Laws Amendment (2014 Measures No 2) Bill 2014 – Dividend washing; un-enacted measures; Medicare Levy low-income threshold [19]
*Tax and Superannuation Laws Amendment (2014 Measures No 3) Bill 2014 – Mining rights and information – restrictions on deductibility [20]
*Miscellaneous changes to tax laws – draft legislation released [21]
*Thin cap rules to be tightened – draft legislation released [22]
*Foreign resident CGT Principal Asset Test: draft legislation released to match mining information with the mine and stop groups creating duplicate assets [23]
*Foreign resident subject to CGT regime for assets used in Australian ‘permanent establishment’ – draft legislation back to 2006 [24]
Announcements
*National Commission of Audit report released [25]
CASES AND APPEALS
High Court
Full Federal Court
*FCT v Resource Capital Fund III LP (No 2) – Final orders re “principal asset” test [26]
*Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v DCT – Cayman Island liquidators subject to Aust tax debt [27]
Federal Court
*Blank v FCT (No 2) – No grounds to re-open case about assessability of $160m in installments based on failure to consider s 23AG [28] 20
Federal Circuit Court
Administrative Appeals Tribunal (AAT)
*AAT held it did not have jurisdiction to consider credit for PAYG withheld (per Liquidator’s certificate) but upheld penalty for ‘gross carelessness’ [29]
*Re Research Scientist and FCT – Tax credits claimed in years when tax not withheld; penalty reduced to 50% [30]
*Re Thorpe and FCT – AAT rehearing: property development profits assessable, some deductions allowed but 50% shortfall penalty affirmed for recklessness [31]
*Re Lighthouse Financial Advisers (Townsville) Pty Ltd and FCT – GST: legal settlement was not taxable supply [32]
*Re Stevens Nominees (Sydney) Pty Ltd atf SNS Trust v FCT – AAT lacked jurisdiction because matter was already litigated (res judicata) [33]
*Re Qantas Airways Ltd and FCT – FBT: parking provided to staff was subject to tax as customers had to pay at ‘commercial parking stations’ as defined [34]
*Re XVQY and FCT – Plumbers found not to be employees for super guarantee purposes [35]
Other Courts & Tribunals
Appeals
COMMISSIONER’S PUBLICATIONS & NEWS
Decision Impact statements
*ATS Pacific Pty Ltd v FCT – GST on ‘arranging’ supplies to non-resident travel agents – incidental to tourism supplies consumed in Australia [36]
*Rigoli v FCT – Burden of proof not discharged by conceding the Commr’s estimate of income, save for depreciation issues – returned to AAT [37]
*FCT v Ludekens case – Respondents held to be “promoters” of a tax exploitation scheme [38]
*Swanbat case – GST refund paid outside 4 years can’t be recovered by an assessment under s105-55 of the TAA1 [39]
Rulings
*TR 2014/2 – Taxable income of non-resident shipowner/charterer [40]
Determinations
*TD 2014/11 – FBT: car parking threshold for 2014-15 year is up from $8.03 to $8.26 [41]
*TD 2014/12 – Accounting standards necessary for financial reports to qualify for TOFA [42]
Class Rulings & Product Rulings
CR 2014/41-42 – Return of capital; CGT scrip-for-scrip [43]
CR 2014/4 – Goodman Group: Tax Exempt Employee Share Plan [44]
ATO Interpretive Decisions (ATOIDs)
Practice Statements
Tax Alerts
Other ATO news or statements
Updated Large business and tax compliance booklet released by ATO [45]
Student assistance debts – indexation factor is 2.6% [46]
G20 Tax Symposium Tokyo: closing remarks by Commissioner [47]
Promoter penalty regime and recent court decisions: ATO speech says their approach is to ‘disrupt the supply and demand for these products’ [48]
Addressing BEPS – restoring trust in international tax system: speech by Parliamentary Secretary to the Treasurer [49]
BEPS Action Plan – digital economy: ATO speech [50]
*ABS releases Taxation Revenue, Australia 2012-13 – various taxation statistics [51]
GST DEVELOPMENTS
Legislation & Announcements (GST)
Tax Laws Amendment (2014 Measures No 1) Bill 2014: GST excess refunds (new Division 142) [52]
*GST: Instrument waiving tax invoice requirements for customers of motor dealers in relation to motor vehicle incentive payments received by the dealer [53]
Cases (GST)
Re Yates and FCT – GST: input tax credit claims mostly refused due to lack of evidence; penalty affirmed [54]
*Re Lighthouse Financial Advisers (Townsville) Pty Ltd and FCT – GST: legal settlement was not taxable supply [55]
*Re Davsa Forty-Ninth Pty Ltd as Trustee for the Krongold Ford Business Unit Trust and FCT – ITC claims mostly denied [56]
Rulings & Other things (GST)
*ATS Pacific Pty Ltd v FCT – GST on ‘arranging’ supplies to non-resident travel agents – incidental to tourism supplies consumed in Australia [57]
SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
*Super choice product dashboard start date deferred to 1 July 2015 [58]
*SuperStream: Govt to extend deadline for super funds receiving contributions under the new standards to 1 July 2015 [59]
*SuperStream data standards: contribution transition-in period extended by 12 months to 30 June 2017 [60]
*Div 293 contributions tax (for those earning over $300k) for defined benefit funds & Unclaimed super – New regulations were registered [61]
Cases (Super)
*Re Mourched and FCT – Person disqualified under SIS Act remained disqualified – no ‘exceptional circumstances’ [62]
*Re Thompson and FCT – Superannuation re-contribution hit with $60,959 in excess contributions tax [63]
Rulings & Other things (Super)
SuperStream start dates: ATO/APRA reminders for super trustees [64]
CARBON TAX & EMISSIONS REDUCTION FUND
MINERALS & PETROLEUM RENT RESOURCE RENT TAX
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR
BOARD OF TAXATION
EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO
*IGoT reviews of (1) ATO debt collection systems and (2) tax practitioner services – terms of reference released [65]
TAX PRACTITIONERS BOARD & LEGISLATION
*Tax Practitioners Board v Kim (No 1) – Tax agent fails to have Board’s proceedings dismissed [66]
*Re Cleary and Tax Practitioners Board – Tax agent registration suspension period increased to 12 months [67]
Tax and BAS agents’ personal tax obligations; beware of tax fraud: TPB [68]
*Re Li and Tax Practitioners Board – Termination of tax agent’s registration confirmed for unwitting involvement in fraud [69]
*Tax Practitioners Board v Dedic – Court makes penalty orders against unregistered tax agent [70]
STATE TAXES
Legislation & Announcements (State)
NSW payroll tax: Rebate under Fresh Start Jobs Action Plan – Bill passes Legislative Assembly [71]
NSW: State Revenue Legislation Amendment Bill 2014 – passed [72]
NSW: State Revenue Legislation Further Amendment Bill introduced [73]
NT Budget 2014-15: First Home Owners Grant increased to $26k (from $25k), the $600k value cap removed, but only for new houses from 1.1.15 [74]
Tasmania: Payroll Tax Rebate for ‘new’ jobs; doubling of First Home Owner Grant given legislative basis: Amendment Bills introduced [75]
Victorian Budget 2014: payroll tax rate to be reduced; life insurance stamp duty to be abolished [76]
Victoria: State Tax and Other Legislation Amendment Bill introduced [77]
Victoria: State Taxation Legislation Amendment Bill 2014 – retrospective changes to the fire services levy, Gambling Regs transitional provisions [78]
WA Budget 2014-15: first homebuyers – property value threshold for first home buyers stamp duty concession reduced [79]
WA land tax: changes to primary producer exemption on the way [80]
WA: Revenue Laws Amendment Bill introduced [81]
Cases (State)
NSW payroll tax: Seovic Civil Engineering Pty Ltd & Ors v Chief Comr of State Revenue – de-grouping allowed [82]
NSW land tax: Jamsapi Pty Ltd v Chief Comr of State Revenue – primary production exemption refused [83]
NSW land tax: Hall & Anor v Chief Comr of State Revenue – Principal Place of Residence concession for new home refused [84]
NSW land tax: Skinner & Anor v Chief Comr of State Revenue – primary production land tax exemption partially allowed [85]
Rulings & Other (State)
Vic payroll tax: 2014 annual reconciliation – SRO video [86]
Vic stamp duty: changes to motor vehicle stamp duty [87]
OTHER DEVELOPMENTS
*AUSTRAC signs finance intelligence exchange agreement with Macao [88]
*Simpler MyTax tax returns to be introduced (‘click and flick’) [89]
Australian experiences of identity crime and misuse: national survey [90]
Senate Committee FoFA inquiry – transcript of public hearing released [91]
*Implementation of FATCA in Australia – Regulation Impact Statement released, but post-implementation review ordered in 5 years [92]
*Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 – introduced [93]
THE END
_______________________________________________________________________________
NB: I have gathered these articles from various sources for the purposes of study and teaching and I have acknowledged the sources. None of this publication should reproduced in breach of copyright belonging to the acknowledged source. The headings to the articles are often mine (and shouldn’t necessarily be attributed to the publisher).
Source Abbreviations: ‘EDTN’ = Electronic Daily Tax News, published by CCH; ‘LTN’ = Latest Tax News published by Thomsons; and ‘Taxvine’ is the weekly publication by the Tax Institute of Australia; Greenfields = Greenfields Financial Services; TaxBar = Melbourne Tax Bar Association Newsletter at www.vicbar.com.au / Members / Bar Associations / Tax
