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

– October 2017 Developments –

This is a collection of developments in Australian tax law and practice that occurred in October 2017
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 & Draft Legislation

Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017 – small turnover companies can now maintain the higher 30% tax and franking credit rate if 80% or more of their income is ‘passive income’ as defined in s23AB of the Rates Act

Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 – residential depreciation limits, no residential travel deductions; Foreign Acquisitions and Takeovers Bill – vacancy fees imposed on foreign owners leaving residential premises vacant for 6 months pa

Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 – refundable tax offsets or franking credits to shareholders of Junior Miners that surrendered some of the tax losses

Treasury Laws Amendment (Whistleblowers) Bill 2017 – Exposure Draft for consultation – uniform provisions under the Corporations Act and parallel taxation related provisions

Black economy – draft legislation to ban ‘sales suppression technology’ and extending the ‘Taxable Payment Reporting System’ to the cleaning and courier industries



BEPS Action 5 implementation sees governments rapidly dismantling harmful tax incentives worldwide: OECD

Operation of the MAAL – ATO ‘clarifies’ the effect of its evidence before the Senate Estimates Committee – which was that the MAAL had been very effective


High Court

Thomas v CofT – High Court gives Commissioner leave to appeal adverse franking credit streaming decision – based on Qld Supreme Court declaration of beneficiaries’ rights

Citizen 7 High Court decision – Canavan and Xenephon survive; Joyce, Ludlam, Nash, Roberts and Waters ineligible – it is necessary to have taken all steps reasonably required by foreign law to renounce his or her citizenship of a foreign power

Full Federal Court

Keris Pty Ltd (Trustee) v DCT – Security deposit notice for estimated ‘future’ GST held to be valid even though the subdivision had not gone ahead, the sales had not occurred and the margin scheme might affect the amount of GST

Shord v FCT – old s23AG exemption for ‘foreign service’ or foreign tax offsets – taxpayer established that there had been procedural unfairness in establishing that he was not an ’employee’ when working overseas

Federal Court

Hawkins v FCT – Taxpayer won a judicial review of the AAT’s refusal to require the Commissioner to produce further documents about the compensation on termination of a car leasing fleet contract

Administrative Appeals Tribunal (AAT)

Moignard and C of T – Taxpayer beneficiary assessable to only 1/3rd of the trust’s property profit under default beneficiary’ clause argument

Other Courts & Tribunals



Decision Impact statements


TR 2017/D7 – Lower 27.5% corporate tax rate: draft ruling on the ‘carrying on business’ requirement, which largely ignores the distinction between ‘passive investment’ and active business activities (2016-17 only – if sub-80% passive amendments pass) 

TR 2017/D8 – Tax treatment of long-term construction contracts – Accruals basis or estimated profits basis (AASB 15) – IT 2450 and related determinations replaced


TD 2017/21 and TD 2017/22 – Foreign equity distributions to corporate partners and corporate beneficiaries for the purposes of establishing a 10% ‘participation interest’ under Subdiv 768-A

TD 2017/19 Addendum – Reasonable meal allowance amounts for truck drivers – reasonable daily amount for employee truck drivers for meals ($55.30) with 3 separate amounts for breakfast ($24.25), lunch ($27.65) and dinner ($47.70)

Law Companion Guides

Class Rulings & Product Rulings

ATO Interpretative Decisions

Practice Statements

Practical Compliance Guides

Tax Alerts

Other ATO news or statements

ATO’s focus on the cash economy and hidden economy – in the name of ‘protecting honest businesses’

ATO appears at Senate Estimates Committee hearing and responds on multiple issues – including making BEPS CbC reports public (“no-one would give us any [reports]”, says Commissioner)

ATO analysis of the ‘gap’ between theoretical amounts of tax payable and that actually collected: GST – 7.3%, Large Corporate Income Tax – 5.8%, PAYGw – 1.9%, SG – 5.2%

AFP discloses a 76 year old man has been charged with fraud and evading payment of $30m in taxes – maximum penalty: 10 years in jail


Legislation & Announcements (GST)

Treasury Laws Amendment (2017 Measures No 6) Bill 2017 – digital currency will be treated the same as foreign currency for GST purposes from 1 July 2017

GST: meaning of ‘incidental valuable metal goods’ – Minister determines when dealers can still be entitled to an Input Tax Credits for acquisitions from unregistered persons under the revised Div 66

Cases (GST)

Rulings, Etc. (GST)


Legislation, Announcements etc. (Super)

Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 – ‘first home buyer’ and ‘downsizer’ superannuation concessions

Superannuation Accountability Measures 1 & 2 Bills and Strengthening Trustee Arrangements Bill – Senate committee reports recommend they be passed – including the 1/3rd independent directors and chairman requirement

Cases (Super)

Rulings & Other things (Super)






Legislation & Announcements (State)

ACT: Revenue Legislation (No 2) Bill introduced – further refines the ACT ‘Barrier Free’ duty payment arrangements for transfers of land, declarations of trust and commercial leases with premiums (amongst other things)

Cases (State)

NSW payroll tax: JP Property Services Pty Limited v Chief Comr of State Revenue – no payroll tax on payments under cleaning subcontractor agreements as they were not ’employment agency contracts’ under the purposive interpretation accepted by earlier Court decisions

Vic Land Tax – North West Melbourne Recycling Pty Ltd v Comr of State Revenue – taxpayer overpaid land tax by $244,486.87 on land with $1 value – Commissioner’s ‘technical bar’ argument fails

Rulings & Other (State)


Productivity Commission’s 5 year review – revenue measures include land tax to replace stamp duty; States raise taxes for their own spending; collect HECS from estates; reform alcohol taxes (nothing to ‘write home about’)


[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.

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