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1. Government announces temporary investment allowance and small business PAYG instalment reduction
On 12 December, the Prime Minister issued a press release announcing the provision of a $4.7 billion Nation Building Package to strengthen the Australian economy and create Australian jobs.
The package includes two tax initiatives:
- Introduction of a 10 per cent temporary investment allowance to encourage capital investment by Australian businesses – the allowance will be in the form of an additional tax deduction equal to 10 per cent of the cost of an eligible asset. Eligible assets are referred to as new tangible depreciating assets, which includes most items of plant and equipment over $10,000 which are acquired or ordered by the end of the current financial year.
To be eligible, a taxpayer must start to hold the asset under a contract entered into between 13 December 2008 and 30 June 2009, or start to construct the asset between those times.
The allowance will only apply to new assets and new expenditure on existing assets used in Australia. Assets that have previously been used or held for use will be excluded. Assets must also be installed ready for use by the end of 30 June 2010.
Details of this change are included in the Treasurer’s press release No.141.
- Cutting the quarterly pay-as-you-go (PAYG) instalment payable on 21 January 2009 or 28 February 2009 by 20 per cent - this 20 per cent reduction will be available to ‘small business entities’ as defined in the Income Tax Assessment Act 1997 which are generally those with aggregated turnover of $2 million per annum or less who carry on a business.
The Treasurer explained in a press release that this reduction will more accurately reflect small businesses’ average actual profit growth in the current economic climate and also provide certainty for those taxpayers who may want to vary their instalment down but are reluctant to do so due to unexpected income streams. The measure also relieves them of the cost of doing their own calculations.
The reduction does not, of course, apply to taxpayers who calculate their instalments based on the instalment rate notified by the Australian Taxation Office (ATO). Their payments will automatically adjust when they apply the given rate to their actual income for the quarter.
Details of this change are included in the Treasurer’s press release No.140.
The Institute welcomes these incentives and we are intending to include other possible means of fiscal stimulus in our pre-budget submission. If members have any late comments to add for the pre-budget submission, please email the Tax Group before the end of December. The pre-budget submission is due to be lodged on 16 January 2009.
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2. Carbon Pollution Reduction Scheme: White Paper released
On 15 December, the White Paper was released by the Government which outlines the final design of the Carbon Pollution Reduction Scheme (CPRS) and the medium-term target range for reducing carbon pollution.
The key tax treatments canvassed in the White Paper include:
- Discrete legislative provisions will be developed for the tax treatment of permits.
- The rolling balance method will be used to bring permits to account for income tax purposes.
- The cost of acquiring a permit will be deductible when the taxpayer starts to hold the permit
- If the permit is banked, the effect of the deduction will be deferred until the time the permit is surrendered or sold.
- Taxpayers will be allowed to make an election to use either historical cost or market value to value all permits held at the end of an income year.
- Any proceeds received on the sale of a permit will be treated as assessable income.
- The value of administratively allocated permits issued to emission-intensive trade-exposed entities will be valued at zero at the end of an income year ending before the last surrender date for the emissions year for which they were issued.
- A penalty imposed under the CPRS, including one imposed on a liable party for failing to surrender sufficient eligible compliance permits, will not be deductible.
- TOFA provisions and other tax provisions that could otherwise apply to the acquisition, holding and disposal of permits will not apply. Derivatives of permits that are ‘cash settlable’ may be ‘financial arrangements’ under the draft TOFA legislation.
- There will not be a discrete set of GST rules for CPRS transactions. The normal GST rules will apply, however, the GST law will be amended to confirm that permits and eligible emission units are personal property rights, not real property for GST purposes.
The drafting of the legislation to enact the CPRS is underway and exposure draft legislation is expected to be released for public comment in late February 2009, at which time we will seek member feedback. The Government then intends to introduce the relevant Bills into Parliament in the winter sittings of 2009, with the expectation that the CPRS will begin on 1 July 2010.
The White Paper follows from the Green Paper which was released in July 2008. The Institute lodged a detailed submission on the tax issues arising under the proposed CPRS in response to the Green Paper, as reported in Edition 35/2008 of the Tax Bulletin. While some of our submission points were adopted in the White Paper, a number of our key concerns were not taken up.
A copy of the White Paper and various fact sheets, including one on the taxation treatment of emissions permits, can be accessed via this link.
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3. Season’s greetings and other year end details
The Institute's tax group would like to wish members a very enjoyable, relaxing and safe holiday season and a Happy New Year.
The Institute’s offices will close at midday on 24 December 2008 and re-open on Monday, 5 January 2009. However, the tax team will not be fully staffed until Monday, 12 January 2009. The Institute’s new Tax Counsel, Mr Yasser El-Ansary, will also join us on 12 January.
This is the last Chartered Accountants Tax Bulletin for 2008. The first Bulletin for 2009 is planned for 19 January 2009.
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4. Board of Taxation - Review of tax arrangements applying to Managed Investment Trusts (MITs)
On 18 December, the Institute lodged a submission with the Board of Taxation (the Board) commenting on certain issues and questions posed in its discussion paper entitled "Review of the tax arrangements applying to managed investment trusts". In particular, our submission addresses the conflict between the first two policy principles in the Terms of Reference before considering some of the specific questions that the Board asked in its discussion paper, namely:
- The desirability of extending relevant aspects of the recommended changes to tax arrangements for other trusts
- Potential reforms to the eligible investment business rules in Division 6C of the Income Tax Assessment Act 1936 (ITAA 1936)
- Whether there is a continuing need for the tax integrity rules in Division 6B of the ITAA 1936 and
- The capital versus revenue account treatment of gains and losses made on disposal of investment assets by MITs.
As the Institute has been heavily involved in seeking reforms to Divisions 6B and 6C, the submission includes copies of submissions previously lodged on this topic. For a copy of the Board's discussion paper, go to the Board's website.
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5. NTLG Finance & Investment (F&I) Sub-group meeting
On 12 December, Adam Gibbs (KPMG), Larry Gafinowitz (E&Y), Michael Croker (PwC) and Alexis Kokkinos (Deloitte) attended the NTLG F&I Sub-group meeting as the Institute’s representatives. Matters discussed included:
- TD 2008/D14 will be finalised on 14 January. The ATO advised that they were not planning to revise the ENCO (effectively non-contingent obligation) paper to update for changes on views contained in TD 2008/D14.
- Draft TR 2008/D8 on section 177EA has been approved to issue and will now issue as a draft on 17 December 2008. Some comments have been taken on board by the ATO and the draft ruling has been run by the rulings panel.
- Functional currency rules – Treasury is looking at the issue. The item is considered closed.
- ATOID 2007/197 and 2007/198 – The ATO prepared an internal paper on the issue. A decision is being made by Peter Walmsley as to what advice will be provided by the ATO on the issue. The item will remain open.
- The ATO provided an update on the two ENCO issues discussed at the last meeting, being (1) the limited recourse debt issue, and (2) economic compulsion section 974-135(7) issue.
Members can contact the Tax Group if they require further information on the above.
The agenda paper is here. The formal minutes of the meeting will be published on the ATO website in due course and a link provided in the Tax Bulletin.
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6. TOFA Working Group meeting
On 12 December, Alexis Kokkinos (Deloitte), Tony Stolarek (E&Y), Matt Hayes (KPMG) and Michael Croker (PwC) attended the NTLG F&I Sub-group TOFA Working Group meeting as the Institute’s representatives. Matters discussed included:
- The ATO has identified six or seven major areas that they need to work on in relation to the implementation of TOFA Stages 3 & 4, being (a) specialist recruitment, (b) training and skilling, (c) ongoing management, (d) comprehensive communications strategy, (e) interpretation and advice, (f) compliance, and (g) tax timing (related to returns etc).
- Treasury provided an update saying that they have finished looking at issues and do not appear to be working on further issues in the background. Accordingly, synthetic provisions are not being examined at this stage. They also indicated that the issues that were not incorporated into the recently released TOFA Stages 3&4 Bill would not be collated.
- The Institute raised an issue in relation to the interaction of PAYG and TOFA in the first year of transition (when elections were made after the first periods of instalment payments). The ATO stated that it believed it could get to a practical result on the reading of the words and would look to provide some administrative guidance on this issue.
- The professional bodies agreed to begin work on forming a TOFA register of issues, which would identify all issues relating to TOFA that were uncertain under the current Bill (or that related to technical amendments required). However, the ATO and Treasury did not want to receive such a list at this time.
- The ATO stated that it could not provide technical advice on issues, but that should not stop members from providing issues to the ATO (which could be considered in the background during the time up to Royal Assent of the Bill).
Members can contact the Tax Group if they require further information on the above.
The agenda of the meeting is here. A copy of the terms of reference of the Working Group is here.
The formal minutes of the meeting will be published on the ATO website in due course and a link provided in the Tax Bulletin.
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7. Joint submission on draft determination
The Institute has lodged a joint submission, available on the Institute website, on the following draft Taxation Determination:
TD 2008/D16 – Income tax: is interest on a loan fully deductible under section 8-1 of the Income Tax Assessment Act 1997 when the borrowed moneys are settled by the borrower on trust to benefit the borrower and others?
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8. Damages for defamation not ordinary income - Commissioner of Taxation v Sydney Refractive Surgery Centre Pty Limited [2008] FCAFC 190
The Full Federal Court (Ryan, Edmonds & Gordon JJ) has held that an award of damages for defamation did not constitute income according to ordinary concepts for the purpose of s 6-5 of the ITAA97, notwithstanding that the amount was calculated solely by reference to lost profits.
The taxpayer received the damages for injury to its business reputation as a result of defamatory publications in April and May 1998 about the nature and quality of its laser eye surgery services. The Supreme Court determined the damages calculated by reference to the taxpayer’s loss of profits but on the basis that the damages award itself would not be assessable as ordinary income.
In dismissing the Commissioner’s appeal, the Court observed that ‘[w]hether a payment of compensatory damages is assessable must be determined by looking to the nature of the cause of action in respect of which the payment is made, rather than the way in which damages are calculated’. In this case, the Court found that the damages were for impairment of the taxpayer’s earning capacity through damage to its business reputation and that business reputation was in the nature of a capital asset.
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9. Capital contribution not reflected in the state or nature of shares at time of disposal - National Mutual Life Association of Australia Limited v Commissioner of Taxation of the Commonwealth of Australia [2008] FCA 1871
The Federal Court (Middleton J) has dismissed the taxpayer’s appeal against the decision of the Commissioner to not allow a capital contribution of almost £43 million in the reduced cost base of shares disposed of because the amount was not reflected in the state or nature of the shares at the time of their disposal.
In brief terms, the taxpayer made a capital loss from the sale of shares held in its wholly owned UK subsidiary. The amount of that loss, then under Pt IIIA Div 3 of the Income Tax Assessment Act 1936, depended on whether the capital contribution formed part of the reduced cost base of the shares under s 160ZH(3)(c). This provision includes in the reduced cost base capital expenditure incurred for the purpose of enhancing the value of the asset and that is reflected in the state or nature of the asset at the time of disposal of that asset.
The Commissioner contended that the ‘value’ of an asset is different from its ‘state or nature’ and that an increase in the asset’s value, resulting from the capital expenditure, is not, of itself, sufficient to meet the requirement that the expenditure be ‘reflected in the state or nature of the asset at the time of disposal’.
The Court agreed with the Commissioner, finding that the concept of state or nature does not include a share’s value. Rather, ‘[t]he ‘nature’ of a share refers to the bundle of rights (and obligations) attaching to a share … being the inherent qualities of a share. Those rights exist, and may be exercised, irrespective of their value. The ‘state’ of a share does not refer to its ‘value’, but refers to other matters, such as whether a share is fully paid up or not’ [at para 53]. In reaching this view, Middleton J also found some assistance in the approach taken by the UK authorities where ‘value’ has been determined to fall outside the concept of ‘state or nature’ in similar legislation The Court also rejected that taxpayer’s submission that an anomaly arose from this construction.
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10. Liquidator not personally liable for GST on post-appointment sale of new residential premises - Deputy Commissioner of Taxation v PM Developments Pty Ltd [2008] FCA 1886
The Federal Court has granted a declaration that a liquidator was not personally liable to the Deputy Commissioner (the Commissioner) for GST or any related general interest charge on the sale of new residential premises under a contract entered into after the winding up order.
PM Developments Pty Ltd (PMD) was ordered to be wound up on 5 July 2007 and pursuant to that order a liquidator was appointed. At the time of the appointment, one unit (Lot 8) out of a development of eight remained to be sold. The title to Lot 8 was held by PMD and at no time was it vested in the liquidator. PMD subsequently entered into a contract for sale of Lot 8 at a price of $1,755,000 inclusive of GST.
The Commissioner issued a private ruling to the liquidator that the liquidator was liable for the GST under Division 147 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act). At the hearing, the Commissioner referred to the explanatory memorandum (EM) as confirmation of the intention to make liquidators personally liable.
The Federal Court held that there is nothing in Division 147 which deems a representative to carry on the enterprise of the incapacitated entity nor to make its supplies and acquisitions such that a liquidator is rendered personally liable. Logan J stated that the EM is no substitute for the statutory language, especially where a taxing statute is concerned. The imposition of a tax must be in plain terms particularly where it is contrary to the position under general law and section 9-5 of the GST Act. His Honour noted that the EM was incorrect, since at general law, liquidators and receivers do not carry on the business of an incapacitated corporation, and that this is only true of bankruptcy for individuals.
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11. Part IVA applies to tax incentive scheme - Green v Commissioner of Taxation [2008] AATA 1116
The Tribunal has upheld the Commissioner’s objection decision to disallow deductions for licence fees, training fees, management fees, marketing fees, pre-paid interest and short-term finance charges on borrowings incurred in relation to a “tax incentive” scheme known as the Oracle International Project (“the Project”).
The Tribunal concluded that in accordance with its decisions in the lead cases concerning the same Project, the deductions were allowable under s 8-1 but Part IVA applied to deny the deductions. It also dismissed the taxpayer’s contentions that assessments could not be amended outside the four-year timeframe because in this case Part IVA was found to apply.
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12. Small remission of shortfall penalty warranted as tax agent’s actions were imprudent but not deceitful – Nitram Consulting Pty Ltd v Commissioner of Taxation [2008] AATA 1119
The Tribunal has varied the decision of the Commissioner concerning the imposition of a shortfall penalty for lack of reasonable care, finding that a small reduction from 25 per cent to 20 per cent was warranted.
The applicant sold its interest in a hotel-tavern for $957,000 inclusive of GST, issued a tax invoice to the purchaser, lodged a BAS for the relevant quarter and reported GST on the sale as $87,000. The applicant’s new tax agent subsequently amended the BAS, by reducing the GST payable on the sale to nil, despite having a copy of the contract which stated the supply was taxable. The Commissioner queried the amendment, assessed GST, and imposed a shortfall penalty for a careless false and misleading statement. No refund of the GST was actually paid to the applicant.
The Tribunal stated that the mere fact that no harm has been done is not of itself a matter to be taken into account. However, special circumstances are not required before the discretion to remit can be exercised. The Tribunal found it compelling that the tax agent admitted advising the applicant to lodge the amended BAS in the expectation the ATO would contact the applicant for further information. While the Tribunal noted that this approach was incorrect and imprudent, it was satisfied that there was no intention to deceive the ATO, such that a small reduction in the penalty was warranted.
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13. Brady King Pty Ltd v Commissioner of Taxation (No 2) [2008] FCA 1918
The decision in Brady King Pty Ltd v Commissioner of Taxation (No 2) [2008] FCA 1918 was handed down by Middleton J in the Federal Court in Melbourne on 18 December. The issue for determination was whether the valuation obtained by the applicant complied with the requirement of section 75-10(3) of the GST Act 1999. A summary of this decision will be provided in the next issue of the Tax Bulletin.
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14. Travelex Ltd v Commissioner of Taxation (No 2) [2008] FCA 1961
The decision in Travelex Ltd v Commissioner of Taxation (No 2) [2008] FCA 1961, on the characterisation of a supply of foreign currency banknotes, was handed down by Emmett J in the Federal Court in Sydney on 19 December. A summary of this decision will be provided in the next issue of the Tax Bulletin.
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15. Taxation Rulings
TR 2008/10 - Petroleum resource rent tax: application of Petroleum Resource Rent Tax Assessment Regulations 2005 to an integrated gas-to-liquid operation.
This ruling was released in draft form as TR 2008/D4.
The joint submission lodged by the Institute and various other professional bodies on the draft ruling, and the ATO’s response, is available on the Institute website.
TR 2008/List - Income tax and other taxes: Determinations, Rulings, notices of withdrawal, addendum and erratum issued in 2008.
Addenda
TR 96/12A - Addendum - Income tax: objections against income tax assessments
TR 2007/11A - Addendum - Income tax: withholding tax and related implications for a non-resident head lessor or hire-purchase provider of substantial equipment where the equipment is obtained by another non-resident entity that subleases, subprovides or leases it for use in Australia.
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16. Taxation Determinations
TD 2008/29 - Income tax: consolidation: capital gains: do the core consolidation rules in Division 701 of the Income Tax Assessment Act 1997 modify the effect of the CGT contract rules if an entity contracts to buy or sell a CGT asset and the contract settles after the entity becomes, or ceases to be, a member of a consolidated group?
This ruling was released in draft form as TD 2008/D9.
TD 2008/30 - Income tax: consolidation: capital gains: for the purposes of Part 3-90 of the Income Tax Assessment Act 1997, is the CGT asset that an entity has contracted to buy from another taxpayer an asset of the entity at a time it joins or leaves a consolidated group, if the contract is not completed at that time?
This ruling was released in draft form as TD 2008/D10.
TD 2008/31 - Income tax: consolidation: capital gains: for the purposes of Part 3-90 of the Income Tax Assessment Act 1997, is the CGT asset that an entity has contracted to sell to another taxpayer an asset of the entity at a time it joins or leaves a consolidated group, if the contract is not completed at that time?
This ruling was released in draft form as TD 2008//D11.
TD 2008/32 - Income tax: value of goods taken from stock for private use for the 2008-09 income year
This ruling was not previously released in draft.
The joint submissions lodged by the Institute and various other professional bodies on these draft determinations, and the ATO’s response, is available on the Institute website.
Withdrawal
TD 2007/16W - Notice of Withdrawal - Income tax: can section 177EA of the Income Tax Assessment Act 1936 apply to the issue of 'dollar value' convertible notes of the type described in this Taxation Determination?
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17. Draft Taxation Determinations
TD 2008/D18 - Income tax: employee share schemes: for the purpose of subsection 139CD(6) of the Income Tax Assessment Act 1936, does a taxpayer become the holder of a beneficial interest in shares merely by acquiring a contractual right to obtain shares in a company (the particular, individual shares not being ascertained at the time)?
TD 2008/D19 - Income tax: Division 7A: in exercising the discretion under subsection 109Y(2) of Division 7A of Part III of the Income Tax Assessment Act 1936 to substitute an appropriate value for a private company's assets, can the Commissioner take into account the value of the company's assets not shown in the company's accounting records?
The Institute will be preparing or co-ordinating the preparation of a submission to the ATO in respect of these Draft Taxation Determinations. If you have any comments, please email them to us at the Tax Group by 20 January 2009.
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18. Draft Goods and Services Tax Ruling
GSTR 2008/D5 - Goods and services tax: new residential premises and adjustments for changes in extent of creditable purpose
The Institute will be preparing or co-ordinating the preparation of a submission to the ATO in respect of this Draft Goods and Services Tax Ruling. If you have any comments please email them to us at the Tax Group by 3 February 2009.
Addendum
GSTR 2003/3A - Addendum - Goods and services tax: when is a sale of real property a sale of new residential premises?
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19. Draft Taxation Ruling
TR 2008/D8 - Income tax: application of section 177EA of the Income Tax Assessment Act 1936 to non-share distributions on certain 'dollar value' convertible notes
The Institute will be preparing or co-ordinating the preparation of a submission to the ATO in respect of this Draft Taxation Ruling. If you have any comments please email them to us at the Tax Group by 17 February 2009.
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20. Draft Wine Equalisation Tax Rulings
WETR 2008/D1 - Wine equalisation tax: the operation of the wine equalisation tax system
WETR 2008/D2 - Wine equalisation tax: operation of the producer rebate for other than New Zealand participants
The Institute will be preparing or co-ordinating the preparation of a submission to the ATO in respect of these Draft Wine Equalisation Tax Rulings. If you have any comments please email them to us at the Tax Group by 3 February 2009.
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21. Self Managed Superannuation Fund Determination
SMSFD 2008/3 - Self Managed Superannuation Funds: is there any restriction in the Superannuation Industry (Supervision) legislation on a self managed superannuation fund trustee accepting from a member a binding nomination of the recipients of any benefits payable in the event of the member's death?
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22. Class Rulings
CR 2008/87 - Income tax: scrip for scrip roll-over: exchange of shares in Bandanna Coal Pty Ltd for shares in Enterprise Energy Ltd
CR 2008/88 - Income tax: off-market share buy-back: Lion Selection Limited
CR 2008/89 - Income tax: scrip for scrip roll-over: exchange of shares in Sunshine Gas Limited for shares in Queensland Gas Company Limited
CR 2008/90 - Income tax: demerger of Iron Road Limited by Adelaide Resources Limited
CR 2008/91 - Income tax: provision of security camera systems to Queensland taxi service licence holders
CR 2008/92 - Income tax: exchange of units in Connell Wagner Holdings Trust for shares in Connell International Group Limited
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23. Product Rulings
PR 2008/72 - Income tax: Great Southern 2009 High Value Timber Project (ABL Nominees Pty Ltd Finance)
PR 2008/73 - Income tax: Rewards Group Premium Timber Project 2009
Withdrawal
PR 2007/84W - Notice of Withdrawal - Income tax: tax consequences of borrowing in relation to the Momentum Investor Funding Product (Post 30 June 2007)
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24. ATO Interpretative Decisions
ATO ID 2008/166 - GST and motor vehicle industry incentive payments: fleet sales support - margin support - discretionary payments
Withdrawals
ATO ID 2001/63 (Withdrawn) - 'Tainted' Share Capital
ATO ID 2008/114 (Withdrawn) - GST and change in extent of creditable purpose where new residential premises are constructed for sale but subsequently rented
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25. Practice Statement
PS LA 2008/19 - Request for amendment of income tax assessments
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26. Legislation update
The following tax-related Bills have received Royal Assent:
- Tax Laws Amendment (Luxury Car Tax – Minor Amendments) 2008 - 11 December
- Tax Laws Amendment (Education Refund) 2008 - 9 December
- Tax Laws Amendment (2008 Measures No. 5) 2008 - 9 December
- Same-Sex Relationships (Equal Treatment in Commonwealth Laws – General Law Reform) 2008 - 9 December
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27. Legislative instruments
The following legislative instruments were released during the past week:
- A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2009 (No. 1) was registered on the Federal Register on 15 December 2008.
The Determination lists the taxes, fees and charges which are exempt from GST, commencing from 1 January 2009.
The Explanatory Statement is available here.
- The Taxation Administration Amendment Regulations 2008 (No. 4) were registered on the Federal Register on 18 December.
The regulations amend the Taxation Administration Regulations 1976 to support the implementation of the Government's temporary residents' superannuation measure.
Broadly, the measure provides that the superannuation benefits of a person who was a temporary resident, where at least six months have passed since the person’s temporary visa ceased to be in effect and they have left Australia, are to be treated as unclaimed superannuation.
These Regulations commence on the day after they are registered.
The Explanatory Statement is available here.
- The Acts Interpretation (Registered Relationships) Regulations 2008 were registered on the Federal Register on 15 December.
The purpose of the Regulations is to prescribe State and Territory relationship registration laws, and the kinds of relationships registered under those laws, which will be recognised as ‘registered relationships’ for the purposes of section 22B.
These Regulations commence on the day after they are registered.
The Explanatory Statement is available here.
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28. Recent ATO publications
Booklets and publications
The Tax Agent magazine index of articles March 2008 - December 2008 - Index of articles in the The Tax Agent magazines from March 2008 until December 2008.
2008 changes to the margin scheme - Fact sheet of the legislative changes to the margin scheme which received royal assent on 9 December 2008.
Removal of the CGT Trust Cloning Exemption - Entry in the new legislation webpage.
ATO industry benchmarks - Industry endorsed benchmarks for concreting, floor sanding and polishing, painting, roofing and taxis.
Metal roofing benchmarks and examples - Industry endorsed benchmarks for metal roofing.
Roof guttering benchmarks and examples - Industry endorsed benchmarks for roof guttering.
New withholding arrangements for managed fund distributions to foreign residents - New withholding arrangements for managed fund distributions to foreign residents.
GST and grants - Information about the treatment of grants for GST purposes.
Administration
eLink 48/08 - Bulletin to inform tax practitioners of the most recent updates to ato.gov.au including a lead article titled 'Tax practitioner webcast'. Issued on 10 December 2008.
eLink 49/08 - Bulletin to inform tax practitioners of the most recent updates to ato.gov.au including a lead article titled 'Holiday season'. Issued on 17 December 2008.
Tax agent technology survey 2008 - The tax agent technology survey 2008 seeks to gain an understanding of whether our products and services meet your needs.
Tax Office shutdown over Christmas-New Year period - Broadcast sent on 18 December 2008 to inform tax agents that all Tax Office systems and services will be unavailable from 4.00pm EDST Wednesday 24 December 2008 until Monday 5 January 2009 while we complete essential maintenance at our data centres.
The BAS service provider - edition 18, September 2008 - Issued 2 September 2008. This edition includes information about The Compliance program 2008-09, Metal roofing industry benchmarks, processing of GST refunds and useful links and key dates for BSPs and their clients.
A better way - Information on new products and services to support a knowledgeable and self-sufficient tax profession. Updated in December, with information on the 2009 Tax agent services guide.
Taxation of Financial Arrangements
Taxation of financial arrangements (stages 3 and 4) - Taxation of financial arrangements (stages 3 and 4) new legislation page.
Taxation of financial arrangements overview - Overview information on the taxation of financial arrangements (TOFA) reforms with links to more detailed information on specific measures.
Large Business Advisory Group
Large Business Advisory Group: membership - Membership listing for the Large Business Advisory Group.
Large business online bulletin: December 2008 - Large business online bulletin featuring several news articles, the latest speeches and media releases.
Capital Allowances
Capital allowances: Scenic and sightseeing transport assets - draft effective lives - This document makes available for comment draft effective lives for scenic and sightseeing transport assets (chair lifts, ski lifts, cable cars etc). Comments should be made by 16 January 2009.
Foreign Exchange
Foreign Exchange - Foreign Exchange new legislation page.
Securitisation vehicles and foreign currency rules - Securitisation vehicles and foreign currency rules new legislation page.
SIC
Shortfall interest charge (SIC) rates - Updated to include shortfall interest charge (SIC) rates announced for the third quarter of the 2008-09 income year.
GIC
General interest charge (GIC) rates - Updated to include general interest charge (GIC) rates announced for the third quarter of the 2008-09 income year.
Non-profit
Non-Profit News Service No. 0229 - Claiming GST credits on reimbursements to employees, officers, agents and volunteers - Dec 2008. Your organisation can claim a GST credit when it reimburses employees, officers, agents and volunteers for their out of pocket expenses when certain requirements are satisfied.
Superannuation
Finding lost super - information for super providers - Information about finding lost super using SuperMatch and SuperSeeker.
SuperUpdate December 2008 - This edition includes information about the draft ruling on interest deductions for certain uncommercial trust arrangements, the new super publications and forms listing, the new eSAT, recent changes to super law for temporary residents, invalid TFNs and fund-capped contribution limits.
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29. Agricultural managed investment schemes – test case decision
On 19 December, the Commissioner issued a press release in response to the Full Federal Court decision on the agricultural managed investment schemes (MISs) test case which clarified the law in relation to deductions for contributions to registered MISs.
The Federal Court decision accepts that investments in MIS arrangements which are broadly similarly to the test case are deductible. The Commissioner noted that these arrangements do not involve features such as non-recourse or round-robin funding in mass-marketed schemes that were disallowed by the courts in cases such as Howland-Rose & Ors v FC of T and Vincent v Commissioner of Taxation.
Also, the ATO will withdraw its current income tax ruling and draft GST ruling on this topic and will work with industry to finalise 2009 product rulings as soon as possible.
A new income tax ruling will be published in the new year. The ATO expects to release a decision impact statement shortly, and does not intend to lodge a request for special leave to appeal the case.
The test case will be reported in a future edition of the Tax Bulletin in due course.
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30. Global Roaming Services and GST
On Friday 19 December, Treasury released exposure draft legislation and an explanatory material proposing to amend the GST Act to ensure that supplies of global roaming services provided to visitors to Australia remain not subject to GST.
Details of the draft legislation and the explanatory material can be accessed here.
Treasury has invited comments from interested parties on the draft legislation. The closing date for submissions is Tuesday, 27 January 2009. If members would like to provide comments, please email the Tax Group by 20 January 2009.
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31. Administrative penalty on the late lodgement of annual investment income reports – draft regulations released
On 12 December, the Treasury issued draft regulations amending the Income Tax Regulations 1936 to provide the Commissioner with the option of imposing an administrative penalty on investment bodies that lodge their annual investment income reports after the due date.
The regulations are amended so that investment bodies which lodge their annual investment income reports after the due date may be liable to pay an administrative penalty as an alternative to being prosecuted through the court system under section 8C of the Taxation Administration Act 1953.
The Treasury is inviting comments by 30 January 2009. The Institute may lodge a submission on the proposed amendments to the Regulations. If members have any comments, please send them to the Tax Group by 16 January 2009.
The draft regulations and the consultation paper are available here.
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32. No GST to be charged by ATM providers on transaction fees – proposed law change
On 18 December, the Assistant Treasurer, the Hon Chris Bowen MP, issued a press release announcing that GST law changes would be made to ensure that no customers will be charged GST on automatic teller machine (ATM) transaction fees when ATM owners start charging ATM users directly for withdrawals from 3 March 2009.
Under a new payment system reform, first announced by the Reserve Bank of Australia (RBA) on 31 August 2007, bilateral interchange fees paid by financial institutions to ATM owners will be abolished and ATM owners will have an option to charge ATM fees to users directly.
If the GST law was not amended, when the reform commences on 3 March 2009, customers using ATMs owned by approved deposit-taking institutions (ADIs) would not have been charged GST on transaction fees, while customers using ATMs not owned by ADIs would have been subject to GST. The proposed change of the GST law aims to prevent any GST anomalies that would arise from the reform.
The States and Territories have approved this change to the GST law.
The Treasury is inviting comments on the Policy Design Paper before 31 December 2008. Further consultation will occur on the draft legislation in due course. Members wishing to provide comments are requested to send them to the Tax Group.
Further details, including a copy of the Policy Design Paper can be accessed via this link.
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33. Resignation and new appointment of High Court Judge
On 10 December, a media release was issued by the Attorney-General’s office (AG’s office) announcing that the Hon Justice Michael Kirby AC CMG has advised the Governor-General of his intention to resign from the High Court, effective from midnight of Monday 2 February 2009.
On 15 December, the AG announced the Government’s decision to recommend to the Governor-General the appointment of Justice Virginia Margaret Bell as a Justice of the High Court, with effect from 3 February.
The relevant press release is available here.
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