M o r g a n’ s T a x M o n t h
– November 2013 Developments –
This is a collection of developments in Australian tax law and practice that occurred in November 2013 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
Monthly PAYG payers – Simpler (additional) method registered – first two months based on 1/3rd of last quarter with wash up payment to finish [1]
*Carbon tax repeal Bills introduced [2]
*Mining tax repeal Bill introduced – loss carry-back, low income super contribution abolished; SGC deferred; instant write-off reduced to 1k [3]
Innovation Grants Committee revoked by notice published in the Gazette [4]
Import processing charges to be increased – Bill introduced [5]
*Upfront HECS-HELP payment discount to be abolished – Bill introduced [6]
Announcements
Australian Industry Group does not support repeal of the loss carry-back rules or reduction in SME write-offs but does support repeal of the Mining Tax [7]
*Government announces its position on unlegislated tax and super measures announced press release [8]
*Board of Taxation’s review of Div 7A to be broadened and extended to 31 October 2014: Assistant Treasurer [9]
*OECD seeks comments on draft technical changes to Model Tax Convention [10]
Senate Estimates hears from ATO on various issues including changes in policy of the new Government [11]
*IPA remind taxpayers to take advantage of current $6,500 ‘small business asset write-off’ before it is due to be abolished on 1 January 2014 [12]
*Liechtenstein and San Marino sign multilateral tax co-operation agreement in Jakarta – whilst other countries deposit important documents [13]
*OECD Global Forum moves towards automatic exchange of tax information and transparency [14]
OECD requests public input on tax challenges of the digital economy [15]
CASES AND APPEALS
High Court
*Howard v FCT – special leave granted on one ground and refused on the other [16]
*Sanctuary Lakes Pty Ltd v FCT – taxpayer denied special leave to appeal decision that it was not entitled to deductions totaling id=”mce_marker”8m for golf resort [17]
*Shepherd Australia Ltd v FCT & Anor – taxpayer denied leave to appeal decision that it was not entitled to be endorsed as a DGR [18]
*Milne v The Queen – special leave granted for appeal against conviction for money laundering and tax offences [19]
Full Federal Court
*FCT v AAT and Cancer and Bowel Research Association Inc as trustee for the Cancer and Bowel Research Trust – DGR status: AAT ‘decision’ to remit matter to Commissioner for reconsideration not appealable as its not final [20]
Federal Court
*Hua Wang Bank Berhad & Ors v FCT (No 15) – Wickenby case: Court restricts use of evidence on basis of self-incrimination [21]
*IOOF Holdings Limited v FCT – Retrospective effect of consolidation amendment applied for taxpayer with private ruling in abeyance [22]
*PTTEP Australasia (Ashmore Cartier) Pty Ltd v FCT – Determination of taxable profit under PRRTAA – crude price determined per contract [23]
Federal Circuit Court
Administrative Appeals Tribunal (AAT)
*Re Murray and FCT – Taxpayer had home in Bali, before being arrested on a visit back to Australia – held not resident during visit/detained years [24]
*No deduction for legal expenses to fight ASIC banning order and criminal charges in 2011 (earlier private rulings did not bind the FCT) [25]
Re Allboat Transport Pty Ltd and FCT – No remission of administrative penalty for lack of reasonable care in reporting BAS liabilities [26]
*Re Coshott and FCT – AAT has no power to stay operation of objection review process [27]
*Re Walters and FCT – AAT bound by declaration made on appeal by consent (but without reasons) [28]
*Re Stewart and FCT – Value of stapled securities not assessable; not acquired as part of share scheme [29]
Other Courts & Tribunals
*Thalia Corporation Pty Ltd v Bentleys (SA) Pty Ltd – Fees paid to accounting firm re ATO audit reduced on appeal [30]
Appeals
Roberts v DCT – taxpayer has lodged an appeal against decision that he didn’t have an arguable case for conscious maladministration [31]
COMMISSIONER’S PUBLICATIONS.
Decision Impact statements
Decision Impact Statements: Intoll Management; Park [32]
ATO Decision Impact Statements: Sanctuary Lakes; Fitzroy Services [33]
Rulings
TR 2013/7 – Exemption of foreign income: member of disciplined force [34]
*TR 2013/D6 – whether payments or transfers to shareholders and associates under the Family Law Act are deemed or actual dividends [35]
Determinations
Class Rulings & Product Rulings
CR 2013/78-82 – Worker entitlement fund; separation of business; proposed merger of funds; etc [36]
CR 2013/85-90 – Logbook; portable leave scheme; early retirement schemes [37]
PR 2013/21 – Commissioner will exercise his s35-55 discretion (about non-commercial business losses) for the 2008 Macquarie Almond Investment [38]
CR 2013/91-94 – Transfer payments; early retirement scheme, convertible shares, return of capital [39]
ATO Interpretive Decisions (ATOIDs)
Practice Statements
*PS LA 2013/5 – Collection of consolidated group tax liabilities – joint and several, subject to group being covered by a valid ‘tax sharing agreement’ [40]
*PS LA 2013/6: Collection of indirect tax debts – especially from GST Groups [41]
*ATO releases updated Code of settlement practice [42]
Tax Alerts
*TA 2013/3 – ATO warns professionals misusing discretionary trust partnerships – ‘further guidance’ being developed [43]
Other Commissioner news or statements
ATO provides early engagement to large business for amendments or objections [44]
*Warning over scheme involving stealing information to create payment summaries and collect fraudulent refund [45]
*ATO considering using external company auditors to provide assurance to it on various tax matters [46]
ATO vision for tax administration in the future [47]
GST DEVELOPMENTS
Legislation & Announcements (GST)
Cases (GST)
*MBI Properties Pty Limited v FCT – Commissioner seeks leave to appeal to the High Court that there was no increasing adjustment and no continuing supply from the purchaser of the reversion [48]
*Professional Admin Service Centres Pty Ltd v FCT – No input tax credits for litigation funding provided to Nick Petroulias’ criminal defence [49]
*Re Zarev and FCT – GST registration restored (computer repair business) but assessments stand – ITC private and/or no invoices [50]
Re Trustee for the Grewal Property Trust and FCT – GST input tax credits partially disallowed – claim that substantiation failed because of flooding [51]
*Re Snugfit Australia Pty Ltd and FCT – Supply of sleep apnea product held to be GST-free as an item 82 night-time positioning equipment modification [52]
Rulings & Other things (GST)
*ATO interim view on MBI Properties case – No Increasing GST adjustment on sale of apartment GST-free (as no supply by purchaser of reversion) [53]
*AP Group Ltd v FCT – Interim Decision Impact Statement on vehicle incentive payments case [54]
CR 2013/83-84 – GST-related Class Rulings: input tax credits of waste contractors [55]
GSTR 2013/D2 – GST and moveable home estates: ATO welcomes feedback [56]
GST online import threshold – no change, but possible decision by next March [57]
SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
Low income superannuation contribution abolished and SGC increase to 12% deferred 2 years, with Bills to repeal the Mining Tax [58]
Cases (Super)
*Ioppolo & Hesford v Conti – SMSF: surviving trustee not obliged to appoint executor of deceased member as a trustee and he distributed her death benefits to himself despite directions to the contrary in her will [59]
*Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v FCT – Superannuation contributions surcharge constitutionally valid for Victorian MPs (but contributory fund) [60]
*Albrecht v FCT – Superannuation surcharge held constitutionally valid against WA police officers (police not important enough) [61]
*Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd – decision that the director breached his duties in making super contribution being appealed [62]
Rulings & Other things (Super)
*SPAA calls for increase in concessional super contributions cap than the current $25k/$35k regime [63]
ASIC warns real estate industry about recommending property investment through SMSFs without being appropriately licenced [64]
ASIC Commissioner update on SMSF advice and disclosure requirements [65]
*TD 2013/22 – Excess superannuation contributions – use of suspense accounts and reserving strategies [66]
Superannuation Discussion Paper on Regulation and Governance issued by Assistant Treasuer [67]
ASIC paper SMSF advice is “too narrowly focused” says ICAA [68]
Government prefers a regulatory “light touch” re SMSFs [69]
CARBON TAX
Carbon tax repeal Bills introduced [70]
MINERALS & PETROLEUM RENT RESOURCE RENT TAX
Mining tax repeal Bill introduced – loss carry-back, low income super contribution abolished; SGC deferred; instant write-off reduced to id=”mce_marker”k [71]
*Further time to lodge 2013 MRRT return in light of mining tax repeal for certain entities: Instrument made [72]
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS COMMISSION (ACNC)
*Charities: Extension granted for 2013 Annual Information Statement from 31.12.13 to 31.3.14 [73]
BOARD OF TAXATION
EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO
*Tax Inspector-General to review ATO’s administration of valuation matters [74]
TAX PRACTITIONERS BOARD & LEGISLATION
*Tax Practitioners Board v Hinckfuss – Unregistered tax agent fined $32,000 [75]
Tax Practitioners Board releases updated CPE requirements [76]
Tax Practitioners Board – says labour hire firms may be required to register if the client can reasonably expect to rely on their services for tax obligations [77]
*Tax Practioners Board issues information sheets giving guidance for tax agents and BAS agents on the ‘reasonable care’ penalty requirement [78]
STATE TAXES
Legislation & Announcements (State)
ACT: Payroll Tax Amendment Bill 2013 (No 2) awaits notification – $4,000 concession for employers who hire school leavers with a disability [79]
NSW land tax: increase in tax threshold for 2014 from $406,000 to $412,000 [80]
Qld: reduced royalties to promote mining investment in Galilee Basin [81]
SA: Stamp Duties (Off-the-plan apartments) Amendment Bill introduced [82]
SA: succession duties; off-the-plan apartments; housing construction grants: Bill updates [83]
Vic: State Taxation and Financial Legislation Amendment Bill 2013 – update [84]
Cases (State)
NSW stamp duty: Baptist Union of New South Wales v Chief Comr of State Revenue – no express trust, so duty exemption denied [85]
Rulings & Other (State)
NSW Govt responds to land valuation system inquiry [86]
Qld: impact of refund on unpaid tax interest for another outstanding liability – Public Ruling [87]
Qld stamp duty: transfers to local governments; beneficiary trust interest – Public Rulings released [88]
SA: housing construction grant extended – Revenue Rulings issued [89]
Tas: First Home Builder Boost increased from $8k to $23k – and after adding a $7k First Home Owner Grant, there is $30k of assistance [90]
WA: interim assessments; duties – easements; etc – Commissioner’s Practices [91]
WA land tax: Govt moves to change law to tighten exemption [91]
OTHER DEVELOPMENTS
*Chartered accountants vote in favour of trans-Tasman Institute [92]
ASIC launches online hub to support small business [93]
Interest rates – no change – stay at 2.5% [94]
Australian Code of Ethics for Accountants: APES 110 amended to align it with the international code [95]
Productivity Commission inquiry into Child Care to examine everything, including possibly tax breaks as form of support [96]
*Australian Electoral Commission has now petitioned the High Court for orders that the election of the 6 WA senators is ‘absolutely void’ – new election likely [97]
Britain may tax foreign property investors: Deputy PM [98]
David Murray to head Financial System inquiry; draft terms of reference released [99]
THE END
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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
