Greenwoods & Freehills Weekly Tax Highlights - Week Ended 27.11.09

ATO Documents

Released 25.11.09

Class Rulings
CR 2009/67: Fringe benefits tax: health services provided by Good Health Solutions Pty Ltd
CR 2009/68: Income tax: payments received under the New South Wales Private Native Forestry Industry Assistance Program: Business Exit Assistance
CR 2009/69: Income tax: early retirement scheme - Port Waratah Coal Services Limited 
Product Rulings
PR 2009/58: Income tax: FEA Plantations Project 2010 - EcoAsh Woodlot option
PR 2009/59: Income tax: FEA Plantations Project 2010 - EcoAshclear Woodlot option
PR 2009/60: Income tax: FEA Plantations Project 2010 - Blended Woodlot (Upfront contribution option)
PR 2009/61: Income tax: FEA Plantations Project 2010 - Blended Woodlot (Annual contribution option)

Released 20.11.09

New Interpretative Decisions
ATO ID 2009/143: Taxation of Financial Arrangements: financial arrangements - offsetting contracts - requirements under subsection 230-530(4) of the Income Tax Assessment Act 1997
ATO ID 2009/144: Capital gains tax: testamentary trust - trustee can choose to be assessed on capital gains

Withdrawn Interpretative Decisions
ATO ID 2001/545: Superannuation Contributions Tax: Financial Year Used for Reporting Surchargeable Contributions
ATO ID 2002/436: Non-quotation of a member's tax file number (TFN) for a particular superannuation account and the application of surcharge
ATO ID 2002/727: Superannuation contributions tax: adjusted taxable income 

Tax Case

South Steyne Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 155 (20 November 2009): In this test case concerning the character of supplies for GST purposes, the Full Federal Court considered the character of supplies made in relation to 83 serviced apartments that were separately leased, but collectively managed by a management company. In a majority decision, the Court held that granting the leases was input-taxed (on the basis that it was the supply of residential accommodation), that no new supplies arose for GST purposes as a result of leases continuing after three of the apartments were sold, and that the sale itself was GST-free on the basis that it was the sale of a going concern (as expressly stated in the sale contract).

Tax Laws Amendment (2009 Measures No. 6) Bill 2009

Introduced 25.11.09 

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 and an accompanying explanatory memorandum have been introduced into the House of Representatives. The Bill contains a number of amendments including:

- abolishing the “trust cloning” exceptions to CGT events E1 and E2 and providing a limited roll-over for the transfer of assets between fixed trusts with the same beneficiaries;
- amendments to the rules surrounding the mergers of complying super funds;
- amendments to the taxation of life insurance companies;
- updating the list of deductible gift recipients;
- prescribing the eligibility criteria for payments to flood victims; and
- changing the excise rate on blended high strength spirits.

International Tax Agreements Amendment Bill (No. 2) 2009

Introduced 25.11.09 

International Tax Agreements Amendment Bill (No. 2) 2009 and an accompanying explanatory memorandum have been introduced into Parliament. The Bill contains the necessary amendments to bring into force the new tax treaty with New Zealand, a second protocol to the tax treaty with Belgium, and an agreement for the allocation of taxing rights with Jersey. For an in-depth analysis of the New Zealand component of the Bill please refer to G&F's latest Tax Brief.

Tax Laws Amendment (2009 GST Administration Measures) Bill 2009

Introduced 25.11.09 

Tax Laws Amendment (2009 GST Administration Measures) Bill 2009 and an accompanying explanatory memorandum have have been introduced into Parliament. The Bill reflects a number of recommendations made by the Board of Taxation in its recent review of GST administration. The Bill will:

- provide a four year limit for claiming input and fuel tax credits;
- allow residents of Australia's external territories to claim refunds of GST/WET;
- expand the types of entities entitled to use the simplified accounting procedures;
- treat an overpaid refund to a taxpayer as a liability; and
- ensure that the GST treatment of a supply to an associate without consideration will be treated as an input-taxed supply, a GST-free supply or a financial supply.

Legislative Update

Tax Laws Amendment (2009 Measures No 5) Bill 2009 has passed through both Houses of Parliament and now awaits Royal Assent.

Progress of Legislation

As at 27.11.09