Greenwoods & Freehills Weekly Tax Highlights - Week Ended 30.7.10
ATO Documents
Released 28.7.10
Class Ruling
CR 2010/31: Income tax: van Eyk Three Pillars Limited: proposed return of capital and share consolidation
CR 2010/32: Income tax: off market takeover of Corporate Express Australia Limited and Special Dividend
Draft Self Managed Superannuation Funds Determination
SMSFD 2010/D1: Self Managed Superannuation Funds: for the purposes of the Superannuation Industry (Supervision) Regulations 1994, can a benefit payable with a cheque or promissory note be 'cashed' at the time the cheque or note is issued?
Fuel Tax Determination
FTD 2010/1: Fuel tax: is apportionment used when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006?
Notice of Withdrawal
FTD 2006/1: Fuel tax: for the purposes of calculating your entitlement to a fuel tax credit what methods can be used to calculate the quantity of taxable fuel that you acquire, manufacture in, or import into, Australia for use in carrying on your enterprise or for use in generating electricity for domestic use?
Released 30.7.10
Interpretative Decisions
ATO ID 2010/140: Excess contributions tax: transitional non-concessional contributions - age based deduction limit - associated employers
ATO ID 2010/141: Consolidation: MEC group - non eligible tier-1 company subsidiary member of a MEC group becoming an eligible tier-1 company member of that same MEC group
ATO ID 2010/142: Employee share scheme: indeterminate rights not fringe benefits
Withdrawn Interpretative Decisions
ATO ID 2001/218: Research Fellowship: Assessability of payments
ATO ID 2001/230: Prepayments
ATO ID 2001/33: Bad Debt to a Deceased Estate (Deductibility)
ATO ID 2001/431: Deduction - Relocation Expenses
ATO ID 2001/605: Motor Vehicle Expenses - leased motor vehicle - deductibility of GST on payment of the residual value
ATO ID 2001/74: Deductions and expenses: Motorised Scooter
ATO ID 2003/558: Lump sum payment in arrears tax offset: lump sum payment of unused sick leave to an ongoing employee
ATO ID 2003/85: Rental deductions: lease of a car park attached to a private residence
ATO ID 2004/715: Non Commercial Losses: other assets test - 'similar rights'
Appeals Update
Commissioner of Taxation v Gloxinia Investments (Trustee) [2010] FCAFC 46 (24 May 2010): The Commissioner has lodged an application for special leave to appeal to the High Court. The Full Federal Court dismissed the Commissioner's appeal from an earlier Federal Court decision that a taxpayer's proposed assignment of leases of residential units would constitute input taxed supplies under Subdivison 40-C of the GST Act.
Tax Cases
Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2010] FCAFC 94 (29 July 2010): The Full Federal Court has found that in order to dispute that a particular scheme produced a “tax benefit” for Part IVA purposes, the taxpayer beared the onus of establishing a particular counterfactual (or alternative postulate) to the scheme that would have produced the same tax result.
In this case, the taxpayer was a family company owned and controlled by two brothers. The Commissioner argued that a tax benefit arose in relation to deductions the company claimed for contributions made to an employee welfare fund on behalf of the brothers, as stipulated in their employment contracts. Prior to the abolition of 100% deductibility for superannuation contributions and the introduction of the “age-based limits” in 1997, the contributions had been made to the brothers’ self-managed funds. The AAT concluded that Part IVA did not apply as the company would have found a way to make the contributions in a tax deductible manner in any event, despite the taxpayer not adducing evidence of any particular counterfactual. The Full Federal Court ordered that the AAT’s decision be set aside and the matter be remitted to the AAT to determine if there was any evidence to support the taxpayer’s counterfactual claim.
Progress of legislation
A Federal Election has been called for 21 August 2010. Those Bills which had not passed through both Houses of Parliament as at 17 July have now lapsed. The lapsed Bills are noted in the table below. Bill Explanatory Memorandum Intro House Passed House Intro Senate Passed Senate Date of Royal assent / Act Number Description Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009 19.11.09 Lapsed Disclosure and Secrecy Provisions Tax Laws Amendment (2010 GST Administration Measures No. 1) Bill 2010 10.2.10 10.3.10 10.3.10 11.3.10 24.3.10/21 GST 17.2.10 13.5.10 13.5.10 17.6.10 28.6.10/75 Division 7A, TFN, Carbon Technology exemptions, DGR Tax Laws Amendment (2010 GST Administration Measures No. 2) Bill 2010 18.2.10 13.5.10 13.5.10 17.6.10 28.6.10/74 GST 17.2.10 13.6.10 15.6.10 17.6.10 29.6.10/79 Tax Law Rewrite Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010 13.5.10 23.6.10 23.6.10 24.6.10 14.7.10/114 Repeal of the FIF Provisions Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) 2010 13.5.10 1.6.10 15.6.10 17.6.10 29.6.10/78 Medicare Levy and Medicare Levy Surcharge 13.5.10 17.6.10 21.6.10 Lapsed Refundable R&D Tax Offsets 26.5.10 23.6.10 23.6.10 24.6.10 29.6.10/90 Managed Investment Trust, Thin Cap, Super Co-contribution Tax Laws Amendment (2010 GST Administration Measures No. 3) Bill 2010 26.5.10 21.6.10 22.6.10 23.6.10 29.6.10/78 GST 26.5.10 23.6.10 24.6.10 24.6.10 6.7.10/100 25.5.10 Lapsed CGT, TOFA, Debt Equity, Foreign Currency Gains and Losses, GST, Managed Investment Trusts and DGR 25.6.10 Lapsed Protocol to the Singapore Treaty 24.6.10 Lapsed Superannuation
As At 30.7.10
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