ATO documents

CR 2018/8: Income tax: deductibility of funds contributed by Australian Taxation Office employees to the Australian Services Union Taxation Officers' Branch Litigation Fund CR 2018/9: Income tax: bonus share plan: Cedar Woods Properties Limited

Draft practical compliance guideline

PCG 2018/D2: Diverted profits tax

Tax cases

Resource Capital Fund IV LP v Commissioner of Taxation [2018] FCA 41 (5 February 2018): The Federal Court (Pagone J) held that the partners of two US limited partnerships were entitled to seek tax relief under Article 7 of the US-Australia DTA in relation to profits on disposal of shares in an Australian mining company and that the Commissioner was bound by the terms of Taxation Determination TD 2011/25. The Court accepted the evidence of valuation experts to find that the shares did not pass the principal asset test in section 855-30 of the Income Tax Assessment Act 1997 and were not subject to Article 13 of the US-Australia DTA.

Denmark Community Windfarm Ltd v Commissioner of Taxation [2018] FCAFC 11 (5 February 2018): The Full Federal Court dismissed the taxpayer’s appeal and held that a Commonwealth grant for the establishment of a windfarm was an assessable recoupment under section 20-20 of the Income Tax Assessment Act 1997.

Bill introduced on GST withholding for sales of new residential premises

The Government has introduced a Bill into Parliament for the GST withholding measure on sales of new residential premises and potential residential land, which is due to take effect from 1 July 2018. For further details, refer to our Riposte here.

Bill introduced on CGT changes announced in 2017-18 Federal Budget

The Government has introduced a Bill into Parliament containing a number of amendments to the CGT rules, as announced in the 2017-18 Federal Budget, including introducing an integrity rule to the principal asset test to ensure it is applied on an associate-inclusive basis, removing the entitlement to the CGT main residence exemption for foreign residents, and providing an additional CGT discount for affordable housing.

Australia-Netherlands DTA to be amended

The Dutch Ministry of Finance has announced that it is proposing to commence negotiations with Australia in 2018 in order to conclude a new or amended double tax agreement (DTA) between the two countries.

Draft legislation released to restrict CGT small business concessions

On 8 February, the Government released draft legislation to introduce integrity rules to the small business CGT concessions so that a taxpayer will only be able to access the small business CGT concessions in respect of assets that are used in a small business, or which represent an ownership interest in the small business. The measures were first announced in the 2017-18 Federal Budget and are proposed to apply to CGT events that occur on or after 1 July 2017. Comments on the draft legislation are due by 28 February 2018.

Draft legislation released to give the MLI force of law in Australia

On 8 February, the Government released draft legislation to amend the Income Tax Agreements Act 1953 to give the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) the force of law in Australia. Comments on the draft legislation are due by 23 February 2018.

Progress of legislation

As at 9.2.18

Parliament resumes on 9 February 2018.

Bill

Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018

Description

Implements new rules for foreign residents owning Australian housing, technical amendments to streamline the foreign investment framework and introduces tax incentives to boost investment in affordable housing.

Status

Introduced into House of Reps 8.2.18.

Bill

Treasury Laws Amendment (2018 Measures No. 2) Bill 2018

Description

Establishes the foundation for the Government's new Fintech framework. Makes a number of technical amendments to the Early Stage Venture Capital Limited Partnership, Venture Capital Limited Partnership and Tax Incentives for Early Stage Investor regimes.

Status

Introduced into House of Reps 8.2.18.

Bill

Treasury Laws Amendment (2018 Measures No. 1) Bill 2018

Description

Makes several regulatory amendments, repeals inoperative provisions, extends tax relief for merging superannuation funds, and amends the GST laws relating to property.

Status

Introduced into House of Reps 7.2.18.

Bill

Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018

Description

Introduces various measures aimed at curbing participation in the "Black economy".

Status

Introduced into House of Reps 7.2.18.

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

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 the Senate 13.11.17.

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.