Tax case

Commissioner of Taxation v Hacon Pty Ltd [2017] FCAFC 181 (23 November 2017): The Full Federal Court has held that the Commissioner was entitled to exercise his discretion to decline to rule on a private ruling application on the basis of paragraph 357-110(1)(a) of Schedule 1 to the Taxation Administration Act 1953 regarding the making of assumptions about a future event or other matter.

Draft legislation released to implement OECD hybrid mismatch rules

On 24 November, the Government released draft legislation to implement the hybrid mismatch rules as set out in the OECD’s 2015 Final Report on BEPS Action 2 (Final Report). The draft legislation includes measures todeny an exemption for foreign equity distributions and/or imputation benefits, where distributions are deductible by the payer and introduces new anti-hybrid rules modelled on the recommendations in the Final Report.

Submissions are due by 22 December 2017. Refer to our Riposte here for further details on the foreign equity distributions and imputation measures.

Announcement on OECD branch mismatch rules

On 24 November, the Treasurer announced that the Government will develop a targeted integrity rule and branch mismatch rules, consistent with the OECD’s BEPS Action 2 report Neutralising the Effects of Branch Mismatch Arrangements. These measures will commence at the same time as the general hybrid mismatch rules(six months after Royal Assent).

Progress of legislation

As at 24.11.17

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

Act No. 118 of 2017.

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

Passed Senate 15.11.17.

Bill

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

Description

Part of Government Housing Affordability Package.

Status

Passed Senate 15.11.17.

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. Awaiting passage by Senate.