Greenwoods & Freehills Weekly Tax Highlights 1.4.11

ATO Documents

Released 30.3.11

Class Ruling
CR 2011/34: Income tax: off market takeover of Ammtec Limited
Product Rulings
PR 2011/7: Income tax: Macquarie Almond Investment 2011 - Early Growers  
Taxation Determinations
TD 2011/2: Fringe benefits tax: for the purposes of section 135C of the Fringe Benefits Tax Assessment Act 1986 , what is the exemption threshold for the fringe benefits tax year commencing on 1 April 2011?
TD 2011/3: Fringe benefits tax: for the purposes of section 28 of the Fringe Benefits Tax Assessment Act 1986 what are the indexation factors for valuing non-remote housing for the fringe benefits tax year commencing on 1 April 2011?
TD 2011/4: Fringe benefits tax: for the purposes of Division 7 of Part III of the Fringe Benefits Tax Assessment Act 1986 , what amount represents a reasonable food component of a living-away-from-home allowance for expatriate employees for the fringe benefits tax year commencing on 1 April 2011?
TD 2011/5: Fringe benefits tax: what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2011?
TD 2011/6: Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2011?
Addendum
TD 2004/62: Income tax: consolidation tax cost setting rules: how does subsection 701-30(2) of the Income Tax (Transitional Provisions) Act 1997 modify the step 3 amount under section 705-90 of the Income Tax Assessment Act 1997?  
Withdrawn Goods and Services Tax Advice
GSTA TPP 025: Goods and services tax: what are the registration requirements for resident agents acting for non-residents?
GSTA TPP 028: Goods and services tax: what should be the content of a tax invoice issued by or on behalf of an entity that adopts a simplified accounting method? 
GSTA TPP 029: Goods and services tax: what amount should appear in a tax invoice that relates to a contract subject to a retention?
GSTA TPP 035: Goods and services tax: can an agent issue a tax invoice on behalf of a principal?
GSTA TPP 040: Goods and services tax: can an agent for a partnership of trusts use its own name and the partnership's ABN on valid tax invoices? 
GSTA TPP 048: Goods and services tax: which name and ABN should appear on a tax invoice when a trustee makes a taxable supply in its capacity as trustee?
GSTA TPP 086: Goods and services tax: is a partnership entitled to an input tax credit for an acquisition if the relevant tax invoice contains the name of only one partner?
GSTA TPP 087: Goods and services tax: is a partnership entitled to an input tax credit for an acquisition if the relevant tax invoice contains the name of only one partner, and that partner is reimbursed by the partnership for the cost of the acquisition?
 
Released 31.3.11

Practice Statement
Draft PS LA 2843:  Exercise of the Commissioner's discretion under section 109RB of Division 7A of Part III of the Income Tax Assessment Act 1936 to either disregard a deemed dividend or to permit a deemed dividend to be franked 
 
Released 1.4.11

Withdrawn Interpretative Decisions
ATO ID 2003/854: Assessability of Australian sourced dividend income received by a UK resident
ATO ID 2005/349: Assessability of income derived by a New Zealand resident taxpayer from leasing a ship fully crewed and supplied for use in Australian fishing waters
ATO ID 2006/129: The application of the Business Profits Article in relation to the Dividend Article in the double tax agreement between Australia and New Zealand (the New Zealand Agreement)
ATO ID 2007/77: Assessability of payments made by an Australian entity to a New Zealand resident under a licence agreement 
ATO ID 2009/17: A compulsory subscription payable from foreign earnings in a foreign country under a legislative decree is not income tax

Announced 30.3.11

The Assistant Treasurer has announced that the Board of Taxation will review the consolidation rights to future income and residual tax cost setting rules. The Board of Taxation is requested to examine the operation of the rights to future income and residual tax cost setting rules with a view to clarifying their scope. The Board will also propose changes to limit the scope of the rules, if necessary, and advise on the date of effect of those proposed changes (including whether they should apply retrospectively).

Roy Morgan  Research Pty Ltd v Commissioner of Taxation [2010] FCAFC 52 (26 May 2010): The High Court has reserved judgement in relation to Roy Morgan Research’s appeal against the decision of the Full Federal Court. The taxpayer had previously challenged the constitutional validity of the Superannuation Guarantee (Administration) Act 1992. 

Tax Cases

Sent  and Commissioner of Taxation [2011] AATA 198 (25 March 2011): This case relates to the establishment of an executive share trust that was used by Primelife to convert present and future bonus entitlements of its then managing director into shares.  Broadly, the presently accrued and future bonus payments were directed to the executive share trust which then acquired Primelife shares that would vest after a certain period. The AAT held that, of the bonus entitlements which had been directed to the trust, the only part which was ordinary income in the hands of the executive was that part which related to services that had already been provided at the time of the establishment of the trust.  The AAT also held that Part IVA did not apply.

Progress of legislation