ATO documents

Draft Taxation Rulings

TR 2017/D7: Income tax: when does a company carry on a business within the meaning of section 23AA of the Income Tax Rates Act 1986?

TR 2017/D8: Income tax: tax treatment of long term construction contracts

Taxation Determinations

TD 2017/21: Income tax: where an Australian corporate tax entity is a partner in a partnership, can the partnership 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997?

TD 2017/22: Income tax: where an Australian corporate tax entity is a beneficiary of a trust, can the trust 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997?

Notices of Withdrawal - Taxation Rulings

The ATO has withdrawn a number of rulings which will form part of a consolidated ruling on the tax treatment of long-term construction contracts (refer TR 2017/D8) under the ATO’s Project Refresh:

IT 2450: Income tax : recognition of income from long term construction contracts

TD 92/131: Income tax: property development: are tender costs to be included in the 'estimated profits basis' calculation under Taxation Ruling IT 2450 and spread over the life of a long-term construction contract, or are they deductible under subsection 51(1) of the Income Tax Assessment Act 1936 in the year in which they are incurred? TD 92/186: Income tax: property development: can a construction contract which runs for less than twelve months be regarded as a long-term construction contract for the purposes of Taxation Ruling IT 2450?

TD 94/39: Income tax: property development: can costs incurred and income derived under the terms of a long-term construction contract be returned on a completed contract basis?

TD 94/65: Income tax: property development: is a 'management reserve' taken into account in calculating notional taxable income under the estimated profits basis of returning income from a long term construction contract?

TD 94/87: Income tax: property development: where the estimated profits method of recognising income from long-term construction contracts (Taxation Ruling IT 2450) is adopted, how is an estimated 'ultimate loss' arising under a contract to be recognised?

Notice of Withdrawal - Draft Goods and Services Tax Determination

GSTD 2017/D1: Goods and services tax: what is excluded from being second-hand goods by paragraph (b) of the definition of that term in Division 195 of the A New Tax System (Goods and Services Tax) Act 1999?

OECD progress report on BEPS Action 5

On 16 October 2017, the OECD released a progress report ‘Harmful Tax Practices - 2017 Progress Report on Preferential Regimes’ which includes the outcome of peer reviews of 164 preferential tax regimes, which have been undertaken by the Forum on Harmful Tax Practices in accordance with the BEPS Action 5 minimum standard.

Case

Keris Pty Ltd (Trustee) v Deputy Commissioner of Taxation [2017] FCAFC 164 (13 October 2017): The Full Federal Court has upheld the constitutional validity of s.255-100 of Schedule 1 of the Taxation Administration Act 1953 (Cth). The taxpayer was the owner of a large tract of land which it intended to subdivide and sell. Prior to this occurring, the Commissioner gave notice to the taxpayer under s.255-105 requiring it to give security to the Commissioner, by means of a mortgage over its real estate assets, “for the due payment of a tax related liability”, being the future GST liability the ATO expected to arise in relation to the sale of the lots. The Court upheld the validity of the notice under s.255-100, distinguishing the requirements in s.255-100 from the statutory contexts of the retention obligations in ss.254 and 255 of the Income Tax Assessment Act 1936 (Cth), as well as the constitutional validity of s.255-100.

Progress of legislation

As at 20.10.17

Bill

Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017

Description

Replaces the former Exploration Development Incentive with the Junior Mineral Exploration Tax Credit.

Status

Introduced into House of Reps 19.10.17.

Bill

Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017

Description

Clarifies that certain corporate tax entities will not qualify for the lower corporate tax rate if, broadly, more than 80 per cent of their assessable income is income of a passive nature.

Status

Introduced into House of Reps 18.10.17.

Bill

Treasury Laws Amendment (2017 Measures No 6) Bill 2017

Description

Amends the GST Act to ensure that supplies of digital currency receive equivalent GST treatment to supplies of money.

Status

Awaiting Royal Assent.

Bill

Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017

Description

Part of Government Housing Affordability Package.

Status

Introduced into the Senate 18.10.17.

Bill

First Home Super Saver Tax Bill 2017

Description

Part of Government Housing Affordability Package.

Status

Introduced into the Senate 18.10.17.

Bill

Treasury Laws Amendment (Housing Tax Integrity) Bill 2017

Description

Part of Government Housing Affordability Package.

Status

Introduced into the Senate 19.10.17.

Bill

Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017

Description

Part of Government Housing Affordability Package.

Status

Introduced into the Senate 19.10.17.

Bill

Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017

Description

Fund the NDIS by amending the Medicare Levy Act 1986 to increase the Medicare levy rate from 2 to 2.5% of taxable income for the 2019-20 income year and later income years.

Status

Introduced into House of Reps 17.8.17.

Bill

Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017

Description

Extends the reduction of the corporate tax rate to 25 per cent by 2026/27 to businesses with turnover of more than $50 million.

Status

Introduced into House of Reps 11.5.17.

Bill

Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017

Description

Similar business test; Effective life assessment on intellectual property.

Status

Introduced into Senate 22.6.17.

Bill

Superannuation (Objective) Bill 2016

Description

Superannuation reform package.

Status

Introduced into Senate 23.11.16. Awaiting passage by Senate.