Greenwoods & Freehills Weekly Tax Highlights 27.7.07-3.8.07
ATO Documents
Released 1.8.07
Class Rulings
CR 2007/71: Income tax: deductibility of the Special Category Membership offered by the Hunter Business Chamber
CR 2007/72: Income tax: treatment of payments received under the Securing our Fishing Future package:[atonl ] * Assistance for Skippers and Crew
Product Ruling
PR 2007/73: Income tax: tax consequences of investing in JPMorgan Dividend Advance Resettable Warrant Instalments Series IQA, IQB May 2007 Product Disclosure Statement - cash applicants and secondary market purchasers
Taxation Rulings
TR 2007/7: Income tax: consolidation: errors in tax cost setting amounts of reset cost base assets
Addenda
Taxation Determination
TD 2000/49: Income tax: are payments made by members of a body corporate in respect of that membership subject to Pay As You Go withholding?
Taxation Ruling
TR 2002/9: Income tax: withholding from payments where recipient does not quote ABN
Released 30.7.07
Law Administration Practice Statement
PS LA 2007/20: Exercise of the Commissioner's discretion under section 109RB of Division 7A of Part III the Income Tax Assessment Act 1936 to disregard a deemed dividend in respect of the 2001-02 to 2006-07 income years. Tax Office to appeal decision on GST and security deposits
Appeals Update
Released 3.8.07
Reliance Carpet Co Pty Ltd v FCT: The Tax Office has announced that it is seeking special leave to appeal to the High Court in this matter. The Full Federal Court found that no GST was payable on the forfeiture of a security deposit.
Japanese Double Tax Agreement
Released 3.8.07The Treasurer has announced that Australia and Japan had agreed in principle on a new double tax agreement. The main features include:
- Changes to the the general 15% withholding tax rate.This will be replaced with a zero rate where the recipient is a company with ownership interests of at least 80%, a 5% rate where the recipient is a company with ownership interests of at least 10%, but less than 80% and 10% for other recipients;
- A zero interest withholding tax rate will apply to financial institutions and government institutions resident in the other country;
- Royalty withholding tax will be reduced from 10% to 5%.
- Limitation of Transfer Pricing review periods
- Prescribed time frames for the creation of a permanent establishment where an enterprise is engaged in the exploration for or exploitation of natural resources
- Introduction of ‘Income from Real Property’ and ‘Alienation of Property’ clauses
Tax Cases
Tyco Australia Pty Ltd v FCT [2007] FCA 1055, Federal Court, 20 July 2007: The Federal Court rejected the Commissioner's treatment of fees paid over three years as capital payments incurred to create a business structure. The court has instead found that the fees which were service agreements for security monitoring were on revenue account and therefore deductible.Progress of Legislation
As at 3.8.07
|
Bill |
Intro House |
Passed House |
Intro Senate |
Passed Senate |
Date of Royal assent / Act Number |
Description |
|
International Tax Agreements Amendment Bill (No 1) 2007 |
29.3.07 |
|
|
|
|
Treaties with France and Norway |
|
Tax Laws Amendment (2007 Measures No 4) Bill 2007 |
21.6.07 |
|
|
|
|
Foreign tax credit quarantining rules , Trustee beneficiary reporting, Family trust elections, Investment in instalment warrants by super funds, Simpler super, Deductible Gift recipients |
|
Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 1) 2007 |
21.6.07 |
|
|
|
|
|
|
Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 2) 2007 |
21.6.07 |
|
|
|
|
|
|
International Tax Agreements Amendment Bill (No 2) 2007 |
21.6.07 |
|
|
|
|
Treaty with Finland |
|
Superannuation Legislation Amendment Bill 2007 |
21.6.07 |
|
|
|
|
Commonwealth Superannuation |