Greenwoods and Freehills Weekly Tax Highlights 1.2.08 - 8.2.08

ATO Documents

Released 6.2.08
Class Ruling
CR 2008/5: Income tax: Selective Capital Reduction: Orica Limited 
CR 2008/6: Income tax: statutory licence roll-over for the replacement of existing water entitlements with new water entitlements under the Water Act 1989 (Victoria) 
Product Ruling
PR 2008/7: Income tax: Organic Apple Project 
PR 2008/8: Income tax: Mediterranean Olives Project 2008 - (Growers not in Joint Venture) 

Released 8.2.08

Interpretative Decisions
ATO ID 2008/25: Superannuation Guarantee: liability of company in liquidation for superannuation guarantee charge in respect of a GEERS advance paid by a third party
ATO ID 2008/26: Superannuation Guarantee: liability of company for superannuation guarantee charge in respect of a dividend paid by a liquidator for unpaid salary or wages
ATO ID 2008/27: Superannuation guarantee: liability of company in liquidation for superannuation guarantee charge in respect of a GEERS advance paid by a liquidator
ATO ID 2008/28: Superannuation guarantee: liability of liquidator for superannuation guarantee charge in respect of a GEERS advance
ATO ID 2008/29: Addition of wine to brandy and whether the finished product is brandy
ATO ID 2008/30: In-house residual expense payment fringe benefit
Withdrawn Interpretative Decisions
ATO ID 2002/128: GST and use of margin scheme by superannuation fund
ATO ID 2003/562: Employee Share Options: taxing rights of UK on gain by an Australian resident taxpayer where the share options were granted to the taxpayer when they were working in the UK
ATO ID 2003/605: Assessability of employment income received by Australian resident working in the United Kingdom
ATO ID 2003/855: Assessability of Australian sourced interest income received by a UK resident
ATO ID 2003/861: Assessability of employment income received by Australian resident working on oil rig in Norway
ATO ID 2003/917: Assessability of interest from UK treasury bonds
ATO ID 2003/1076: Assessability of employment income received from a UK employer by Australian resident working remotely in Australia using the Internet
ATO ID 2007/63 : Consolidations: Foreign Branch Transactions - single entity rule 

The following Tax and related Bills are proposed for introduction in the Autumn 2008 Sittings of Federal Parliament.
Tax Laws Amendment (2008 Measures No 1) Bill 2008 will include superannuation provisions for the terminally ill; deductions for capital expenditure for the establishment of trees in carbon sink forests; equine industry hardship payments; tax-free grants under the Tobacco Growers Adjustment Assistance Programme 2006 to certain tobacco growers; farm management deposit scheme; and political donations.
Tax Laws Amendment (2008 Measures No 2) Bill 2008 will amend various tax Acts.
Tax Laws Amendment (Personal Income Tax Reduction) 2008 will amend the tax laws and the Medicare Levy Act 1986 to provide changes to personal income tax rates, thresholds and the Low Income Tax Offset.
Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2008 will make minor amendments to the Superannuation Act 1976 and the Superannuation (Productivity Benefit) Act 1988 in relation to changes to the earnings base for superannuation contributions to comply with the Superannuation Guarantee (Administration) Act 1992 from 1 July 2008.

Parliament will also decide on the fate of several lapsed bills including Tax Laws Amendment (2007 Measures No 6) Bill 2007 and Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2007.

Woodside Energy Ltd v FCT (No 2) [2007] FCA 1961: The taxpayer has appealed to the Full Federal Court.  The Federal Court had held that over $550m in hedging could not be taken into account to reduce Woodside's "taxable profit" for the purpose of determining its tax liability for petroleum resource rent tax.

Neutral Bay Pty Ltd v DCT; MA Howard Racing Pty Ltd v DCT; Broadbeach Properties Pty Ltd v DCT [2007 ] QCA 312: The Deputy Commissioner of Taxation has been granted special leave to appeal to the High Court.  The Qld Court of Appeal had rejected the Deputy Commissioner's appeal against the setting aside of statutory demands for the payment of outstanding tax.

DCT v Dick [2007] NSWCA 190: The taxpayer has been refused special leave to appeal to the High Court against the decision of the NSW Court of Appeal. The case related to tax liabilities incurred by the director of a company.

Tax Cases

Re O'Brien and FCT, AAT Case [2008] AATA 86, 1 February 2008: The Tribunal has confirmed that Pt IVA applied to deductions claimed by a taxpayer in respect of his investment in 2 olive growing schemes. The Tribunal reached the finding on the basis that the round-robin financing arranged by the promoters of the scheme was the main source of funds for the deductions. The investors were unaware of the financing arrangements.