Australian Taxation Office

New or updated materials on ATO website, including:

Multinational tax package

Last week's passage of the Government's multinational tax package brought with it a new financial reporting requirement for multinationals operating in Australia, as well as the expected new multinational anti-avoidance law, increased penalties for tax avoidance and transfer pricing schemes, and new transfer pricing documentation standards (including Country-by-Country reporting). This TaxTalk Alert provides an overview of the key measures contained in the Bill as passed, whilst this Straight Away Alert from PwC's assurance practice focuses on the new financial reporting obligation for multinationals.

Managed Investment Trust Regime

This Tax Talk Alert highlights the key features of the new tax regime for Attribution Managed Investment Trusts (AMITs) and the related amendments (for which legislation was introduced into Parliament last week), issues to be considered and next steps before the start date of new regime.

Commissioner Statutory Remedial Power

Treasury has released exposure draft legislation to implement the Commissioner's statutory remedial power. The Commissioner's power, to apply from Royal Assent of the amending Bill, would allow a modification to the operation of the law to address unforeseen or unintended outcomes in administration. Comments can be made until Friday 15 January 2016.

Government response to tax disputes inquiry

The Government's response to the House of Representatives Standing Committee on Tax and Revenue inquiry into Tax Disputes was tabled in Parliament last week. The Committee made five recommendations to Government, including the creation of a new Second Commissioner - Appeals to head up a new Appeals area within the ATO. The Government has stated that it does not support a legislative approach to the separation of the tax appeals area of the ATO from the compliance area, and that this separation has already been achieved without the need for legislative separation. The Government has largely rejected the other four recommendations. The remaining recommendations from the inquiry were to the ATO, which has yet to make a formal response.

Labor Party Innovation Policy

The Australian Labor Party announced its policy to encourage innovation on Friday, which contains a range of new tax concessions for investors in start-ups. Called the Australian Angel Investment Scheme, the scheme will provide:

  • An upfront 50 per cent tax deduction for an investment up to a maximum of $200,000 per year.
  • Investors can ‘carry back’ tax relief if they don’t reach the maximum $200,000 cap in any particular year.
  • Full capital gains tax exemption for equity held in the startup venture for more than three years.
  • Any realised losses following investment in the scheme can be deducted against wage and salary income.
  • Deferral of capital gains tax on investments if the investor directs a prior capital gain into a new startup venture.

The Government is due to release its Innovation Statement today.

International tax

  • Japan implemented consumption tax on the provision of certain electronic services by non-residents to Japanese consumers with effect from 1 October 2015. This Japan Consumption Tax Update sets out the compliance obligations for non-resident supplies as a result of the implementation of the rules and some practical issues.