Greenwoods & Freehills Weekly Tax Highlights - Week Ended 20.11.09

ATO Documents

Released 18.11.09

Class Rulings
CR 2009/64: Income tax: employment termination payment: New South Wales Lotteries Corporation
CR 2009/65: Income tax: CSIRO - National Indigenous Study Awards
CR 2009/66: Income tax: amendment of terms of Reset Exchangeable Securities and Preference Shares: Insurance Australia Group Limited

Released 20.11.09

New Interpretative Decisions
ATO ID 2009/137: Capital allowances: granting a right of use - other than a taxable purpose
ATO ID 2009/138: Managed investment trust withholding rate under Subdivision 12-H of Schedule 1 to the Taxation Administration Act 1953 
ATO ID 2009/139: Custodians' managed investment trust withholding rate under Subdivision 12-H of Schedule 1 to the Taxation Administration Act 1953
ATO ID 2009/140: Residual fringe benefits: free travel on bus - private use
ATO ID 2009/141: Entertainment facility leasing expenses: hire of a marquee
ATO ID 2009/142: Taxation of Financial Arrangements: financial arrangement - is a forward purchase contract 'cash settlable' under paragraph 230-45(2)(e) of the Income Tax Assessment Act 1997

Practice Statement
PS LA 2009/9: Conduct of Tax Office litigation

Tax Case

LeasePlan Australia Limited v Commissioner of Taxation [2009] FCA 1309 (13 November 2009):  The Federal Court has found that a taxpayer was entitled to input tax credits under s.66-5(1) of the GST Act in respect of acquisitions of  second hand motor vehicles. In particular, the issue was whether the taxpayer made the acquisitions “for the purpose of sale”. In this regard, the taxpayer purchased the vehicles from private individuals, to whom they were then leased back. At the end of the lease of a vehicle, the vehicle would be sold to the lessee or to another third party. The  Federal Court considered that s.66-5(1) did not contain a “sole” or “dominant” purpose test, and on the facts found that the sale of the vehicles was “a” purpose of their acquisition sufficient for s.66-5(1), albeit the taxpayer also had the purpose of leasing the vehicles.

Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009

Introduced 19.11.09 

Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009 and an accompanying explanatory memorandum have been introduced into Parliament. The Bill consolidates the tax disclosure and secrecy provisions in the tax laws. 

Legislative Update

Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 received Royal Assent on 16.11.09. The Bill becomes Act No. 114 of 2009.

The House of Representatives passed both the Tax Laws Amendment (Budget Measures No. 2) Bill 2009 and the Income Tax (TFN Withholding Tax (ESS)) Bill 2009 on 16.11.09. 

Progress of Legislation

As at 20.11.09