Foreign companies that may be controlled by an Australian entity should review their decision-making based on the Australian Taxation Office (ATO) Taxation Ruling, TR 2018/5 (TR 2018/5). It is timely for Australian groups with foreign-incorporated subsidiaries to consider whether they are appropriately managing tax residency risk by re-visiting and/or implementing tax residency protocols and ensuring that they can be applied practically.
This week the government released the Board of Taxation report on a new tax residency model for individuals with a position that further analysis and consideration on the key recommendations is required before the Government takes a position.
The recent Federal Court decision of Pintarich v Deputy Commissioner of Taxation  FCAFC 79 considered whether from the Australian Taxation Office (ATO) purportedly remitting the taxpayer’s amounted to a ‘decision’ by the Commissioner of Taxation (Commissioner).
As 30 June rapidly approaches, taxpayers and their advisors face not knowing whether a 30% or 27.5% tax rate applies to certain companies for the 2018 income year.
The Commissioner of Taxation (Commissioner) has power pursuant to section 255-15(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA) to permit a taxpayer to pay off its tax debts by instalments in accordance with a payment arrangement. The recent Federal Court decision of Stojic v Deputy Commissioner of Taxation  FCA 483 (Stojic), which dismissed an application by the sole director and shareholder of the taxpayer company to review a decision by the Commissioner to decline to exercise that power, provides two important lessons.
On 29 March 2018 the Treasury Laws Amendment (2018 Measures No. 1) Act amending the Taxation Administration Act 1953 (the Act) received Royal Assent.
A key focus of the Federal Budget was on personal income tax cuts, and measures aimed at large companies and the black economy.
On 8 February 2018, the Government released for public consultation exposure draft legislation to implement the 2017 Budget announcement to improve the integrity of the small business capital gains tax (CGT) concessions.
In Commissioner of Taxation v Miley, the Federal Court overturned a decision of the Administrative Appeals Tribunal (AAT) concerning the method for valuing shares in applying the maximum net asset value (MNAV) test in s 152-15 of the Income Tax Assessment Act 1997.
The recent case of FCT v Hacon illustrates the practical difficulties in obtaining a private ruling that depends on assumptions about future events - in particular, in the context of the application of the anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936.
From 1 July 2018 purchasers of new residential premises or of new subdivisions of potential residential land that are taxable supplies will be required to pay 1/11th of the purchase price directly to the Australian Taxation Office (ATO) at settlement, if the exposure draft legislation released by the Government on 6 November 2017 passes in its current form. Subject to limited exceptions under proposed transitional rules, the new GST withholding obligation will apply even if a vendor applies the GST margin scheme.
Uncertainty had arisen earlier this year as to whether companies with passive investments (including ‘bucket’ companies) would be eligible for the lower company tax rate of 27.5% based on the requirement in section 23AA of the Income Tax Rates Act 1986 that they were “carrying on a business.”
The Australian Taxation Office (ATO) published the final version of the Practical Compliance Guidelines (PCG) 2016/16, which provides guidance in relation to what will be considered by the Commissioner when exercising his discretion to treat an interest in the income or capital of a trust as being a fixed entitlement, and by extension whether a trust is a fixed trust for most tax law purposes.
In the case of MSAUS v FC of T the Administrative Appeals Tribunal (AAT) recently held that Division 135 of the A New Tax System \Goods and Services Tax Act (GST Act) did not apply to impose an increasing adjustment (an amount of GST on an otherwise GST-free transaction) to the sale of leased residential apartments.
As previously reported here, the Government introduced a Bill into Parliament to increase the aggregated turnover threshold for small business entities seeking to access small business tax concessions to less than $10 million and to reduce the corporate tax rate for small business entities to 27.5% from the 2016/17 income years.
In RGGW and Commissioner of Taxation  AATA 238, the Administrative Appeals Tribunal (AAT) held that tax losses were not available to a corporate partner in a property development partnership due to poor evidence to support its claim for losses.
The High Court of Australia has recently allowed an appeal against a decision of the Victorian Court of Appeal and found that the Commissioner of State Revenue (Commissioner) was not under a duty to issue amended assessments and refund an excess amount of land tax that was erroneously been paid by a taxpayer.
The Full Federal Court of Australia denied the application of the CGT small business 50% active asset reduction on the basis that an unusual activity carried on by an associated entity to the taxpayer contributed to the aggregated annual turnover of the taxpayer and associated entity to be more than $2,000,000.
As set out in our previous article, the deadline for ensuring non-commercial related party limited recourse borrowing arrangement (LRBA) loans are rectified to reflect commercial terms is 31 January 2017. This date is fast approaching and SMSF trustees must take immediate action to ensure compliance with the ATO’s guidelines set out in PCG 2016/5.
On 10 October 2016, the Federal Government released an Exposure Draft to amend the debt and equity rules in Division 974 of Income Tax Assessment Act 1997 for the purpose of implementing recommendations made by the Board of Taxation in its April 2015 report Review of the Debt and Equity Tax Rules.