Tax Month – November 2021

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

– November 2021 Edition –

‘Tax Developments’ for tax practitioners by a tax practitioner.

 

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

Table of Contents

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COVID-19 related matters

• The Public Health and Wellbeing (Pandemic Management) Bill 2021 – Dan’s dangerous ‘overreach’ pandemic powers – The Victorian Bar’s submissions
• Vic – COVID-19 Mandatory Vaccination (Workers) Directions (No 8) – from 26.11.21 work from home unless you’re double vaxxed (or have work relating to courts)

Legislation

Acts & Bills

• Bill introducing a new ‘Corporate collective investment vehicle’ regime (with flow through tax treatment) and also loss carry back, ESS, retirement income covenant and DGR changes
• No 5 Bill passed – film related copyright expenditure – changes made
• Virtual meetings and electronic communication Bill passes House, with amendments

Announcements & Drafts

• Multi-Lateral Instrument (MLI): synthesised text of Australia-Denmark Double Tax Treaty
• DTA with Chile – synthesised text of ‘Agreement’ after working in the Multi-Lateral Instrument (MLI) common form changes
• Second Commissioner of ATO appointed – Kirsten Fish (Chief Tax Counsel and acting 2nd Commissioner)

Cases

High Court

• Addy Case – High Court finds for Taxpayer, striking down the higher ‘backpacker tax’ under the UK-Aust DTA requirement not to discriminate based on nationality
• Addy v CofT – High Court rules “backpacker tax” does not apply to UK national who is Australian tax resident – ATO loses
• British waitress; Addy, wins High Court challenge to discriminatory backpacker tax – a wider view
• High Court overturns 3 decisions of new High Court tax judge when he was a Federal Court judge

Full Federal Court

• CofT v Virgin Australia Regional Airlines Pty Ltd – FBT: airline provided car parking fringe benefits to pilots etc – ‘business premises’ was not where duties performed (in the air)

Federal Court

• Sibai v CofT – Taxpayer loses appeal on scope of his ‘onus of proof’ – it was not limited to just the amendment amounts
• The Buddhist Society of Western Australia Inc v CofT (No 2) – decision to revoke ‘school building fund’ DGR status set aside, under ADJR part of action (failed under Part IVC)

Administrative Appeals Tribunal (AAT)

• Dezfoolian v CofT – Interest derived overseas assessable – exchange rate questions and forex losses in subsequent years
• Sanderson v CofT – Australian based in Malaysia an Australian tax ‘resident’ and thus assessable on receipts found to be foreign source income

Other Courts & Tribunals

• New Federal Jurisdiction for the Magistrates’ Court of Victoria – following ‘Meringnage’ case denying VCAT federal jurisdiction because it is not a ‘court’ (17.11.21 Webinar)

Rulings

Practical Compliance Guides

• PCG 2017/2 updated – Simplified transfer pricing record-keeping options: 2021-22 interest rates – 1.83%

Other ATO news or statements

• LIV tells ATO there is a ‘counterbalancing offence’ it could commit – even by finalising its ‘protocol’ for claiming ‘Legal Professional Privilege’ in terms that ‘overreach’ the actual law
• The ‘counterbalancing offence’ point gets some oxygen in the AFR – in relation to the ATO exerting ‘undue influence’ on lawyers from the point when they initially claim legal professional privilege
• ATO draft ‘Legal Professional Privilege Protocol’ for claiming privilege (‘overreach’ or not) – LCA Submission
• ATO ‘Organisational Structure’ (29.11.21) – including division of ‘Review and Dispute Resolution’ into two

GST 

Cases (GST)

• Southern Global Group Pty Ltd v CofT – Taxpayer fails to prove bank deposits were loans (GST)
• Belconnen Lakeview Pty Ltd v Lloyd – No loss caused by misleading representation in relation to GST status on sale of unit
• M3K Services Pty Ltd v CofT – no refund of excess GST – because it was ‘passed on’ to customers (would be a ‘windfall’)

Superannuation

Legislation etc. (Super)

• New CCIV Bill also introduces the ‘Retirement Income Covenant’ amendments for non-SMSF Super Funds
• Registered Superannuation Entities (RSEs) – Corporations Amendment (Portfolio Holdings Disclosure) Regulations 2021 finalised

Cases (Super)

• FYYB v CofT – SMSF penalty upheld for breach of borrowing rules – $32k remitted down to $7,500

Other (Super)

• Super ‘choice’ of investments sector: APRA information paper reveals underperformance and extension of its ‘Heatmap’ product to this sector

State Taxes

Cases (State)

• NSW payroll tax: E Group Security Pty Ltd v NSW State Revenue – security company not liable to payroll tax where security guards not integrated into its clients’ work forces

Other Developments

Australian Charities & Not-for-Profits Commission (ACNC)

• ACNC regulation disallowed in Senate – because it exposed charities to deregistration for lobbying (if it involved civil disobedience)

Inspector General and Ombudsman and other external supervisors

• History of the Taxpayers’ Charter – IGTO encourages public to share their views on how the Charter could be improved

Miscellaneous

• Crypto-asset related investment products: ASIC regulatory guidance
• CPI: September quarter 2021 index number 0.8% higher than June (3% annual)
• Statutory ‘unconcionability’ – does it apply to the ATO (just putting it out there…)?

Tax Articles

• Current employment tax challenges – STP Phase 2, digital everything; FBT, FIFO, ‘otherwise deductible’ test, ‘car parking fringe benefits’; Payroll Tax, ‘relevant contractor’ and ‘wages’ definitions

Tax Practitioners Board

• Vac Corporate Pty Ltd v TPB – Tax agent’s registration suspended for 3-months for ‘recklessly’ saying SMSFs were audited (but conduct needlessly described as ‘dishonest’)
• TPB announces new CPE requirements – starting 1 July 2022TPB announces new CPE requirements – starting 1 July 2022

 

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ATW – Australian Tax Week (CCH); LTN – Latest Tax News (Thomson Reuters); TaxVine – The Tax Institute weekly email.