Tax Month – November 2014

M o r g a n’ s   T a x   M o n t h

– November 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in November 2014 and which aims at being of relevance to tax lawyers.*

F John Morgan
A member of the Victorian Bar (www.FJMtax.com)

Liability limited by a scheme approved under Professional Standards Legislation

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Tax and Superannuation Amendment (2014 Measures No 6) Bill 2014 – passes House of Representatives [1]

Customs (Korean Rules of Origin) Regs made [2]

Japan-Australia Economic Partnership Agreement: Bills pass Reps [3]

Freeze on income thresholds for Medicare levy surcharge – Bill passed [4]

*Trusts and phoenix taskforces info sharing; defence force tax exemption: regs amended [5]

*Publication of company tax information to start 1 year earlier if Private Member’s Bill passes (2012/13 year onwards) [6]

 

 

Announcements

Employee incentive schemes: ASIC disclosure relief expanded [7]

*China and Australia complete negotiations for Free Trade Agreement; revised DTA to follow [8]

*BEPS: OECD releases discussion drafts on Action 7 (Artificial avoidance of PE status and Action 10 (transfer pricing guidance of management fees etc.) [9]

*Institutional investors back global tax reform modernisation and transparency at G20 Summit [10]

*Developing countries to play greater role in BEPS project [11]

*G20 Leaders endorse reporting standard on tax info, commit to finalise BEPS in 2015 [12]

*Asia-Pacific tax administrators plan to tackle multinational profit shifting [13]

*Asia-Pacific tax taskforce announced to share compliance tactics [14]

*BEPS discussion draft released on preventing treaty abuse [15]

OECD releases 2013 mutual agreement procedure statistics [16]

 

 

CASES AND APPEALS

High Court

Full Federal Court

 

 

Federal Court

*DCT v Vasiliades & Ors – Asset freezing orders issued including against a trust in which it was alleged Mr Vasiliades had a contingent interest [17]

 

 

Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Watson and FCT – No hardship release: circumstances of taxpayer’s own making [18]

Re Jones and FCT – Work-related expenses denied [19]

Re Farshidian and FCT – Dependant spouse tax rebate denied [20]

*Re Agius and FCT: Taxpayer not a resident, but derived Australian-sourced income [21]

*Re Byrt and FCT – Proceeds from sale of mining tenements assessable as ordinary income [22]

*Re The Trustee for the Confidential Trust and FCT – Minor trust beneficiaries not excepted persons and taxed at 45% [23]

 

 

Other Courts & Tribunals

*DCT v Shears – Default judgment against taxpayer stands [24]

 

 

Appeals

*MBI Properties Pty Ltd v FCT – High Court hears appeal against decision that after the grant of a lease there is no ongoing ‘supply’ [25]

*Lend Lease Development Pty Ltd & Ors v Comr of State Revenue – HC hearing – construction payments to vendor NOT ‘transfer’ consideration [26]

*Re Scanlon and FCT – ETP’s were not taken into account as liabilities for the purpose of the maximum net asset value test [27]

*FCT v Australian Building Systems Pty Ltd (in liq) & Anor – Commissioner applies for special leave re Liquidator’s s254(1)(d) for CGT [28]

FCT v Desalination Technology Pty Limited – relevant R&D expenditure ‘incurred’ [29]

 

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

ATO Decision Impact Statements: ATS Pacific; Retirement Village Operator; PTTEP Australasia [30]

ATO Decision Impact Statements: Gleeson; Bentivoglio [31]

 

Rulings

*TR 2014/6 – Transfer pricing “reconstruction” power – actual commercial or financial relations and what wholly independent parties would do [32]

*TR 2005/7 Addendum – regarding ‘partnership salary’ agreements in a ‘Corporate Limited Partnership’ [33]

 

Determinations

*TD 2014/D18 – Non-resident investing in debt interests – s974-80(1)(d) of the ITAA 1997 [34]

*TD 2014/D19 Meaning of interest held by ultimate recipient for the purposes of s974-80(2) of the ITAA 1997 [35]

 

Class Rulings & Product Rulings

Class Ruling re: ‘scrip for scrip’ rollover and Product Ruling re: AgriWealth Softwood Timber Project [36]

Class Rulings on expiry of leases & membership funding of research development [37]

Class Rulings on FBT, Capital Reallocation and Return of Capital – Addendum to Tax Ruling on Retirement Villiages [38]

 

ATO Interpretive Decisions (ATOIDs)

*ATO ID – Is a term deposit a qualifying forex account? [39]

 

 

Tax Alerts

Other ATO news or statements

*Div 7A ‘corrective action’ and the Commissioner’s 109RB discretion – usually making a ‘complying loan’ agreement and making ‘catch-up payments’ [40]

*No “red flag” for taxpayers coming forward under Project DO IT – ATO more concerned with those who don’t come forward than with those who do [41]

*Commissioner says ATO is rethinking its compliance approaches – including seeking ‘declaratory relief’ [42]

*Share transactions from 20 September 1985 to 30 June 2016 from share registry companies: ATO data-matching program [43]

Cash economy in Geelong and Wagga Wagga – ATO statement [44]

Project DO IT: ATO scenarios on dealing with offshore structures [45]

Building and construction industry: last chance for 2013-14 Annual Report due on 21 July 2014 to be lodged without penalties [46]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

Cases (GST)

*MBI Properties Pty Ltd v FCT – High Court hears appeal against decision that after the grant of a lease there is no ongoing ‘supply’ [47]

*Re Ryan and FCT – Input tax credit claims partly allowed [48]

*RV Investments (Aust) Pty Ltd as Trustee for the RV Unit Trust v FCT – burden of proving creditable acquisition on taxpayer and no question of law [49]

*Re Giuseppe Caporale Structural Engineers Pty Ltd and FCT – GST: Some ITC claims allowed: partial win for taxpayer [50]

 

Rulings, Determinations & Other things (GST)

*GSTR 2014/D5 – GST: development lease arrangements and government agencies – when there are supplies for consideration [51]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

Cases (Super)

*ASIC seeks court order to stop property promoter from providing unlicensed financial product advice on SMSFs [52]

*Re Hope and FCT – Excess super contributions tax – no relief for late contributions via clearing house [53]

 

Rulings & Other things (Super)

*SMSFD 2014/1: Superannuation transition to retirement pensions – partial commutation [54]

*Releasing excess concessional contributions from super – operation and ATO timing [55]

SMSF compliance and regulation update: ATO speech [57]

*Small business super clearing house expansion; choice of fund changes: Government announcement [58]

 

 

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

*Charity financial info to be made publicly available (in the one place and free of charge: ACNC [59]

*Charity registration revoked for 408 missing charities: ACNC [60]

*Health promotion charity: ACNC seeks comments on ACNC Commissioner’s Interpretation [61]

 

 

BOARD OF TAXATION

EXTERNAL SUPERVISORS – IGT; OMBUDSMAN, JCPAA & ANAO

ANAO releases report on ATO admin of Annual Compliance Agreements (ACA’s) [61]

ANAO releases report on ATO contact centres [62]

IGT releases 2 follow-up reports [63]

Oversight of the ATO: second parliamentary report released [64]

 

TAX PRACTITIONERS BOARD & LEGISLATION

*Tax Practitioner Board approved course lists updated [65]

Re Frugtniet and Tax Practitioners Board – practitioner appeals 5 year ban to the Federal Court [66]

 

STATE TAXES

Legislation & Announcements (State)

NSW land tax: increase in tax threshold for 2015 [67]

NSW payroll tax: rebate under Fresh Start Support: Amendment Bill No 2 introduced [68]

Qld: Revenue and Other Legislation Amendment Bill introduced [69]

SA: Stamp Duties (Off-The-Plan Apartments) Amendment Bill – introduced [70]

Tas: stamp duty; land tax; first home builders boost: update on Bills [71]

WA: modernisation of primary production land tax exemption: Bill introduced [72]

 

Cases (State)

NSW land tax: Ferella & Anor v Chief Comr of State Revenue – primary production exemption refused by NSW Court of Appeal [73]

*NSW payroll tax – Newcastle Airport Ltd v Chief Comr of State Revenue – assessments revoked because wages exempt as paid by a ‘council’ [74]

Vic – Duty – Lend Lease Development Pty Ltd v Comr of State Revenue –whether payments to the vendor for construction works were part of the consideration for the land transfer? [75]

Vic land rich duty provisions: Denison Funds Management Ltd v Comr of State Revenue – assessment confirmed on “reconstruction” of property trusts [76]

 

Rulings & Other (State)

Qld payroll tax: employment agencies and workers on-hired to government [77]

Vic payroll tax: reduced penalty for voluntary disclosure of payments to private security industry licensees as exempt ends after 30.11.14 [78]

 

 

OTHER DEVELOPMENTS

Foreign Acquisitions and Takeovers Regs amended re Korea and Japan FTAs [79]

FoFA regulations disallowed by Senate [80]

Enhanced register of financial advisers: draft reg released [81]

Foreign Investors to pay administration fee to FIRB – recommendation by Parliamentary Committee [82]

 

 

THE END
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