21 Oct 2019 | Riposte | Transfer Pricing | Energy & Resources | Corporate and Mergers & Acquisitions | Private Wealth
Transfer pricing & offshore drilling – PCG 2019/D5
The ATO has been concerned with the Australian tax implications of non-residents operating or undertaking drilling operations in Australian waters. The ATO flagged a number of its concerns in Tax Alert TA 2016/4.
11 Oct 2019 | Riposte | Corporate and Mergers & Acquisitions | Financial Services | Private Wealth | Private Equity
Thin Capitalisation - Arm’s length Debt Test – PCG 2019/D3
The ATO has now provide the following guidance on the application of the Arm’s Length Debt Test (ALDT) in the thin capitalisation rules.
17 Sep 2019 | Riposte | Transfer Pricing | Financial Services | Private Equity | Private Wealth | Corporate and Mergers & Acquisitions
Glencore Transfer Pricing Decision
The recent Glencore decision suggests some limits on the ATO’s ability to reconstruct related party transactions in transfer pricing disputes.
16 Sep 2019 | Riposte
Permanent place of abode refers to country or town, not specific address
The Full Federal Court has unanimously allowed the appeal in Harding v Federal Commissioner of Taxation  FCAFC 29. Harding is an important Australian tax residency decision for Australian expatriates who work overseas but maintain family or financial ties with Australia.The Commissioner has applied to the High Court for special leave to appeal the Full Federal Court’s decision in Harding v Commissioner of Taxation  FCAFC 29.
13 Sep 2019 | Riposte | Private Equity | Private Wealth | Corporate and Mergers & Acquisitions | Financial Services
International Tax Trust Morass – Again!
After almost 3 years consulting in relation to tax issues for non-resident beneficiaries in relation to trust level capital gains by an Australian resident trust, the ATO has continued the recent trend of making bad legislation even worse in two recent draft tax determinations.
10 Sep 2019 | Riposte | Employment & Superannuation
Employment taxes update – September 2019
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 6 months (April to September 2019).
30 Aug 2019 | Riposte | Private Wealth | Corporate and Mergers & Acquisitions | Energy & Resources | Financial Services
New corporate residence rules?
The High Court’s decision in Bywater and the ATO’s approach to the impact of the decision has significantly increased the focus on corporate tax residency. The Treasurer has now asked the Board of Taxation to review Australia’s corporate tax residency rules and report by the end of the year.
24 Jul 2019 | Riposte | International | Real Estate | Projects & Infrastructure | Private Equity | Private Wealth
Investment in the US by superannuation funds and through LPs
The US 2017 tax reform included less noticed changes including one relating to foreign partners in LPs investing in the US. An important change in relation to investment by foreign pension funds in US real estate has also been developing over recent years. This Riposte briefly outlines recent important developments on these matters and the problems that can arise when they come together.
08 Jul 2019 | Riposte | GST
Introduction of Director Penalty Notices and Estimates for GST
In a bid to further reduce phoenixing activity, the Government is granting the Commissioner tough new powers to hold taxpayers and directors of companies to account for GST liabilities. The introduction of Director Penalty Notices for GST will be of keen interest to all company directors. In addition, failure to lodge GST returns on time may result in a legally enforceable liability based on ATO estimates. As a result, the people and processes responsible for preparation and lodgement of GST returns may find their work subject to more scrutiny .
03 Jul 2019 | Riposte | Corporate and Mergers & Acquisitions | Financial Services | International
Corporate Tax Changes from 1 July 2019
To kick off the new financial year, we set out some important tax changes which take effect for many corporate taxpayers from 1 July 2019.
02 Jul 2019 | Riposte | Private Wealth | Real Estate
Land tax changes following 2019-2020 State Budgets
In recent weeks, the Queensland and Victorian Governments handed down their 2019-2020 State Budgets. Each Budget contained land tax changes which are mainly targeted at foreign land owners.
26 Jun 2019 | Riposte | Projects & Infrastructure | Real Estate
Update: Staples Legislation - ATO releases Draft Law Companion Ruling
With three business days before 30 June 2019, being the last day for entities subject to a cross staple arrangement to make a choice that transitional relief applies (Transitional Relief Choice), the ATO has released draft Law Companion Ruling LCR 2019/D2 in relation to ‘Non concessional MIT income’ (NCMI), to assist taxpayers in navigating the staples legislation enacted on 5 April 2019 (Staples Legislation).
25 Jun 2019 | Riposte | Employment & Superannuation
Update: Payroll tax on service contracts – regular onsite work
The Chief Justice of the NSW Supreme Court has held that companies that provide services to their clients and subcontract the work are caught by the “employment agency agreement” payroll tax rules if the actual workers are “integrated” in the client’s business.
15 May 2019 | Riposte | Energy & Resources | Projects & Infrastructure
Update: Sufficient clarity on ‘sufficient influence’?
Greater clarity on the law around ‘sufficient influence’ and ‘associates’ should be a step closer as today the High Court of Australia has granted BHP’s application for special leave to appeal the decision from the Full Federal Court.
17 Apr 2019 | Riposte | Financial Services | Transfer Pricing | Corporate and Mergers & Acquisitions
Arm’s length debt test – ATO issues draft tax ruling
On 5 April 2019, the Australian Taxation Office (ATO) released draft Taxation Ruling (TR) 2019/D2 providing updated guidance on the “arm length debt test” (ALDT) in the thin capitalisation provisions.
12 Apr 2019 | Riposte | Financial Services
Another limit on deducting interest
The ATO has released a draft ruling on the hybrid mismatch ‘integrity rule’, which makes clear how broad the potential scope of the rule is, even before the Budget announcement that it will be amended to broaden its scope even further. It is yet another provision that taxpayers need to be mindful of when claiming deductions on related party debt and derivatives.
05 Apr 2019 | Riposte | Financial Services
“Tier 3” securities in Australia – further tax regulations?
Australia’s largest banks will soon be required to issue further regulatory capital. Discussions are currently ongoing with APRA in relation to the precise form of this capital. If Australia adopts the approach seen in a number of European countries then it is possible that a further class of securities (commonly referred to as “Tier 3” capital) will be introduced in Australia. Although such Tier 3 securities should be classified as debt for Australian tax purposes, it is likely that further Regulations will be required in order to ensure this treatment.
03 Apr 2019 | Riposte | Employment & Superannuation
Employment taxes update – April 2019
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including Federal Budget announcements, payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 3 months (January to March 2019).
02 Apr 2019 | Riposte | Financial Services
Receivers’ obligations to retain money for tax
The ATO has released a draft tax determination, TD 2019/D2, dealing with one aspect of the obligations of a receiver in handling money where a future tax liability may be assessed.
29 Mar 2019 | Riposte | GST
Repeal of GST Regulations 1999
The 1999 GST Regulations are being repealed on 1 April 2019. A New Tax System (Goods and Services Tax) Regulations 2019 were registered on 26 March 2019 to take effect from 1 April 2019. The 2019 Regulations ‘remake and improve the operation’ of the GST Regulations without- it is intended- changing their basic operation or introducing policy change. But there are changes.
14 Mar 2019 | Riposte | Employment & Superannuation
Superannuation Guarantee owed on annual leave loading
The ATO has announced that employers need to pay SG on annual leave loading unless the industrial instrument expressly says that the payment is for the loss of opportunity to work overtime (or other non-ordinary hours) during the period of leave, or there is other written evidence of a mutual understanding by the parties to that same effect.
28 Feb 2019 | Riposte | Projects & Infrastructure
Transferred assets and customer contributions – the VPN decision
On 7 February 2019, Moshinsky J handed down his judgment in the Federal Court decision of Victoria Power Networks Pty Ltd v Commissioner of Taxation  FCA 77. The case concerned the assessability of customer contributions ‘received’ in cash or ‘gifted’ assets by electricity distributors in the VPN group for ‘uneconomic’ connections – being connections where the distributor’s ‘incremental revenue’ would not exceed its ‘incremental cost’ from the connection in present value terms. The ‘non-cash business benefit’ rules in section 21A considered in this case are relevant in a broader range of scenarios.
25 Feb 2019 | Riposte | Corporate and Mergers & Acquisitions
Similar business test finally enacted – the more things change…
After much delay the Australian Government has finally passed the changes to the company loss rules which were originally announced as part of the National Innovation and Science Agenda as part of the “Ideas Boom” in 2015.
21 Feb 2019 | Riposte | International
OECD puts the digital tax band back together, with major US contributions
After a relatively quiet period on the digital economy and BEPS front, the OECD has released ambitious and fairly detailed proposals to tackle the digital economy. The proposals would dramatically change international rules on the taxation of business income while continuing to attack BEPS with a global minimum corporate income tax and new base erosion rules with bite.
18 Feb 2019 | Riposte | Real Estate
Tax Rules for the CCIV Regime
Treasury has taken another step in the protracted project to create a new tax-transparent vehicle for holding passive investments with the release of an Exposure Draft (‘ED’) of the tax rules for the Corporate Collective Investment Vehicle (‘CCIV’).
18 Feb 2019 | Riposte | Projects & Infrastructure
Subject to Legal Professional Privilege?
For some time there has been a divergence of opinion between the Australian Taxation Office (ATO) and taxpayers (and their advisers) as to the scope of the common law privilege that attaches to communications between a lawyer and their client for the purpose of providing legal advice, commonly referred to as Legal Professional Privilege (LPP).
12 Feb 2019 | Riposte
Zone tax offset and remote area FBT concessions review begins
The Productivity Commission has commenced a review of the zone tax offset and remote area fringe benefits tax (FBT) concessions, including the limit of the areas they apply to.
An initial issues paper is expected in March for public comment by May.
05 Feb 2019 | Riposte
Rest assured, the single entity rule means what you thought it did!
The ATO has updated its ruling on the meaning and application of the tax consolidation ‘single entity rule’ to address the implications of the 2015 Full Federal Court decision in Channel Pastoral Holdings Pty Ltd v FCT. A new Appendix helpfully confirms that neither the decision, nor some troubling comments in the minority judgment of Pagone J, affects previous guidance in relation to how the single entity rule operates. However, unfortunately we are still waiting for guidance on the many practical issues raised by the prospect of assessing subsidiary members of a tax consolidated group.
01 Feb 2019 | Riposte | Energy & Resources | Projects & Infrastructure
Sufficient clarity on ‘sufficient influence’?
On 29 January 2019, the Full Federal Court decided (by 2:1 majority) that the Australian and UK head entities in the BHP Billiton dual listed companies (DLC) structure “sufficiently influence” each other and are therefore s.318 “associates”.
17 Jan 2019 | Riposte | Financial Services
Accruing Interest and Unpaid Withholding Tax
The ATO has released a Taxpayer Alert dealing with the interaction between the deduction for interest accruing to non-residents and triggering interest withholding tax. It is both reassuring and ominous.
20 Dec 2018 | Riposte | Employment & Superannuation
Employment taxes update – December 2018
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 5 months (August to December 2018).
17 Dec 2018 | Riposte | Private Wealth
Capital gain versus revenue gain, again
The recent decision in the Ransley case has shown the willingness of the ATO to target investors seeking to adopt CGT treatment on the sale of shares. The decision also upheld the 50% penalty applied by the ATO.
30 Nov 2018 | Riposte
Be careful what you agree with the Commissioner
In a recent case where a taxpayer entered into a Deed of Settlement with the Commissioner covering assessments for a number of income years, it was held that the taxpayer couldn’t later object to the assessments even though further information was uncovered calling them into question. If you are considering the settlement of a dispute with the Commissioner, you need to be mindful of what you are signing up to.
30 Nov 2018 | Riposte | Real Estate
Federal Court confirms ATO view on foreign income tax offsets
In the case of Burton v Federal Commissioner of Taxation, the Federal Court confirmed the ATO’s position in that a foreign income tax offset is reduced to the extent that the assessable portion of a foreign capital gain is reduced by the CGT discount or capital losses. However, it would seem that a FITO will not be reduced merely because the amount subject to tax in the foreign country is different because it is calculated in a the local currency.
12 Nov 2018 | Riposte | Real Estate | Private Wealth
Extension of significant global entity definition and impact for large private groups
On 20 July 2018, Treasury released Exposure Draft legislation to extend the definition of a significant global entity (SGE). As a result, the extended definition of an SGE may include members of large private groups headed by unlisted companies, trusts (including discretionary trusts), partnerships or other investment vehicles. This will have wide ranging implications for affected large private groups which were previously outside the scope of some anti-avoidance provisions, increased administrative penalties and the requirement to lodge general purpose financial statements. The change is proposed to apply for income years starting on or after 1 July 2018.
09 Nov 2018 | Riposte | Corporate and Mergers & Acquisitions
ATO to provide guidance on CGT rollovers and demergers
The ATO has announced that it will provide guidance on two matters relevant to demerger relief: (1) sequential planned transactions where a CGT roll-over is claimed for each transaction and the first roll-over (i.e. the demerger) contains a 'nothing else' condition; and (2) for the purposes of applying the demerger provisions what is the scope of a "restructuring".
07 Nov 2018 | Riposte | Corporate and Mergers & Acquisitions | Financial Services | International
UK Digital Services Tax
The UK Chancellor has announced that it will legislate an interim 2% tax on certain digital service business models, pending an international solution. Given the Australian Treasury’s recent discussion paper on whether Australia should consider a similar regime, this article looks at some of the issues that will need to be addressed on implementation.
07 Nov 2018 | Riposte | Real Estate | Financial Services | Energy & Resources | Transfer Pricing
Unreal transfer pricing does not solve very real debt-equity issues
The ATO has released draft determination TD 2018/D6 on the relationship of the debt-equity and transfer pricing rules in relation to related party loans. The draft makes unreal assumptions about transfer pricing and avoids serious analysis of the debt-equity rules, with results that unfortunately are becoming common in ATO guidance – assertion without justification.
05 Nov 2018 | Riposte | Corporate and Mergers & Acquisitions
Off-market share buy-backs and 45-day LIFO rule
Companies paying a dividend in conjunction with an off-market buy-back should take note of the ATO’s updated guidance on the application of the 45 day rule and its impact on entitlement to franking credits.
22 Oct 2018 | Riposte | Real Estate | Private Wealth
Denying deductions for vacant land – Exposure Draft
The Government has released Exposure Draft legislation, as previously announced in the 2018-2019 Budget, to deny certain deductions associated with holding vacant land incurred from 1 July 2019. These integrity measures, which are effectively targeted at private trusts, SMSFs and individuals, can apply to deny deductions where the land is not being used to carry on a business for the purpose of producing assessable income.
17 Oct 2018 | Riposte | Real Estate | Private Wealth
Circular trust resolutions – family trusts to be taxed at 47%
Following on from the Government’s announcement in the 2018-19 Budget, an Exposure Draft entitled Treasury Laws Amendment (Measures for a Later Sitting) Bill 2018 has been released which proposes to impose trustee beneficiary non-disclosure tax (currently, 47%) on the untaxed part of a circular trust distribution to which the trustee of a family trust becomes presently entitled.
15 Oct 2018 | Riposte | Real Estate | Financial Services | Energy & Resources
Source rule in treaty means what it says
The Full Federal Court has confirmed in a short but emphatic judgment that the sourcing rule in Australia’s tax treaties means what it says. It rejected the argument that tax treaties are exclusively relieving and cannot lead (indirectly) to higher tax burdens.
03 Oct 2018 | Riposte | Financial Services | Corporate and Mergers & Acquisitions | International
Digital economy: Not so urgent?
Yesterday Treasury released the long awaited discussion paper on corporate taxation and the digital economy. The paper is mainly a summary of international developments to date and does not give much sense of a direction for Australia. Rather the overall impression is that Australia is parking the question in the too hard basket and does not expect internationally coordinated action for some years to come.
25 Sep 2018 | Riposte | Real Estate
Stapled structures: integrity measures
On 20 September 2018, the Government introduced a Bill into Parliament to give effect to various integrity measures aimed at foreign investors. This is another instalment in the review that was initially aimed primarily at stapled groups. In this Riposte, we focus predominantly on the changes from the exposure draft which will primarily impact real estate groups.
11 Sep 2018 | Riposte | Real Estate | Private Wealth
NSW land tax: property developer liable for land tax under property development agreement
The Civil and Administrative Tribunal of New South Wales decision in Australia Avenue Developments Pty Ltd as trustee for the SOP Site 3 Partner Trust v Chief Commissioner of State Revenue  NSWCATAD 144 demonstrates the importance of considering land tax implications when structuring property development arrangements.
22 Aug 2018 | Riposte
Limits to the Myer principle
A recent decision of the Federal Court has cast some doubts about just how far 'the Myer principle' extends. While the ATO won the case, it may be a victory the ATO will come to regret.
21 Aug 2018 | Riposte | Real Estate | Financial Services | Employment & Superannuation
Trust the PDS
The Full Federal Court decision in Aussiegolfa Pty Ltd (Trustee) v Commissioner of Taxation  FCAFC 122 highlights the importance of statements in offer documents to the interpretation of underlying legal documents - here a trust deed - and the borderline as to when distinct trusts will be created through the use of separate classes of units.
13 Aug 2018 | Riposte | Financial Services | Private Equity | Private Wealth
Tax Law Bites Trust Law on Franking Credits
The High Court of Australia has restored sanity in a long running saga in which a trustee purported to separate franking credits from the underlying dividends in allocations to beneficiaries. The Court held (as the parties now accepted) that this was not possible and that a contrary decision of the Supreme Court of Queensland in its trusts jurisdiction to which the Commissioner of Taxation was not party did not bind the Commissioner.
13 Aug 2018 | Riposte | Real Estate | Private Equity | Private Wealth
Tax Law Bites Trust Law on Franking Credits
The High Court of Australia has restored sanity in a long running saga in which a trustee purported to separate franking credits from the underlying dividends in allocations to beneficiaries. The court held (as the parties now accepted) that this was not possible and that a contrary decision of the Supreme Court of Queensland in its trusts jurisdiction to which the Commissioner of Taxation was not party did not bind the Commissioner.
27 Jul 2018 | Riposte | Employment & Superannuation
Employment taxes update – July 2018
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 4 months (April to July 2018).
25 Jul 2018 | Riposte | Real Estate | Employment & Superannuation
Payroll tax on service contracts – integrated workers
Recent NSW cases have shown that the concept of an “employment agency agreement” under which payments are subject to payroll tax is different to its ordinarily understood meaning.
12 Jul 2018 | Riposte | Private Wealth | Employment & Superannuation
Board of Taxation reviews residency test for individuals
The Board of Taxation has released a self-initiated report considering the existing individual income tax residency rules. In providing its recommendations, the Board of Taxation concludes that the existing residency rules are no longer appropriate and must be modernised.
02 Jul 2018 | Riposte | Real Estate | GST
Happy New (Financial) Year! Welcome to GST Withholding...
The GST Withholding regime commenced on 1 July 2018, so purchasers exchanging from now on will be required to withhold an amount for GST when they acquire most new residential premises and potential residential land.
Due to the transitional provisions, GST withholding will not apply where the contract was entered into prior to this date and the first payment (other than any consideration paid as a deposit) is provided before 1 July 2020.
25 Jun 2018 | Riposte | Corporate and Mergers & Acquisitions
A change in ATO approach to demergers?
The recent press reports of the ATO’s decision to deny tax relief for a demerger that was not conditional on a subsequent acquisition of the demerging entity is a timely reminder of the difficulties in obtaining tax relief in multi-faceted transactions.
25 Jun 2018 | Riposte | Financial Services | International
Commissioner reframes CMC test
In TR 2018/5 and PCG 2018/D3, the Commissioner has used the High Court decision in Bywater to reframe the central management and control (CMC) test of company residency.
20 Jun 2018 | Riposte | Real Estate
Queensland Budget 2018-19: Increases to land tax rates
From 1 July 2018, Queensland land tax payers will be required to pay an additional 0.5% of land tax on the portion of aggregated landholdings above a total taxable value of $10 million.
19 Jun 2018 | Riposte | Real Estate
Exposure Draft released containing technical amendments to the AMIT regime
The Government has released an Exposure Draft containing a number of technical amendments to the AMIT regime. While a number of significant issues with the existing legislation have been brought to the attention of Treasury, only a handful have been addressed in this draft legislation leaving significant issues facing a number of taxpayers.
01 Jun 2018 | Riposte
Senate report on Corporate Tax Avoidance
The final report from the 3 ½ year Senate inquiry into corporate tax avoidance has been released, titled Much heat, little light so far. While the title is quoting a comment of our own Richard Vann on the flurry of recent legislative activity (think MAAL, DPT etc), ironically (and perhaps unintentionally) it is also a very apt title for this Report.
29 May 2018 | Riposte
Common Reporting Standard reports – don’t leave it too late!
The OECD’s Common Reporting Standard became effective in Australia on 1 July 2017. The first report for the 6 month period ending on 31 December 2017 is due on 31 July 2018. Reporting entities should be gearing up to make sure their due diligence procedures are done, and their reportable accounts are identified to ensure they meet this deadline.
24 May 2018 | Riposte | Financial Services
Anti-hybrid measures Bill
The Bill to enact the Government’s announced anti-hybrid measures was introduced into Parliament today. As expected, the Bill makes changes to franking and exempt dividends and payments to low-tax jurisdictions, as well as a suite of measures, based on the OECD/G20 Final Report on BEPS action 2, dealing with hybrid financial instruments and hybrid entities.
18 May 2018 | Riposte | Projects & Infrastructure
Stapled Structures Exposure Draft
Treasury has released the much anticipated Exposure Draft to implement its announcement of 27 March 2018 of a package of tax measures to address the perceived sustainability and tax integrity risks posed by "stapled structures". The Exposure Draft is subject to a two week consultation period ending on 31 May 2018.This Riposte focusses on the Exposure Draft from an infrastructure perspective.
11 May 2018 | Riposte
Churning over Consolidation
The ATO has released draft LCR 2018/D3 on the recently enacted consolidation ‘churning measure’. The guidance provides little insight into the interpretation of the new law, but warns Part IVA may be applied where taxpayers seek to obtain a tax benefit.
03 Apr 2018 | Riposte | Employment & Superannuation
Employment taxes update - April 2018
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 3 months (January to March 2018).
27 Mar 2018 | Riposte | Projects & Infrastructure
Treasury Announcement on ‘Stapled Structures’ – An infrastructure perspective
Following public and targeted consultation, Treasury has today announced a package to address the perceived integrity risks arising from the use of "stapled structures". The package significantly limits tax concessions currently available for foreign investors in receipt of passive income, but contains certain transitional rules and a concession for new investment in economic infrastructure assets approved by the Government.
21 Mar 2018 | Riposte | Real Estate
Who is an Associate in a Stapled Group?
The ATO has argued that entities in a stapled group can be associates, mainly on the basis that the trust side of the stapled group is “sufficiently influenced” by the company side. This has tax consequences including raising the risk of s974-80 applying to cross staple loans. However, the recent AAT case of MWYS casts some doubt over the ATO’s position. Although the case deals with dual listed companies, the principles outlined in the case would suggest that the trust side of a stapled group is not an associate of the company side.
15 Mar 2018 | Riposte | Employment & Superannuation | Private Wealth
Labor to deny SMSF franking credit refunds
Labor announced that, if elected, they would deny franking credit refunds for superannuation funds and individuals. Although targeted primarily at Self-Managed Superannuation Funds, some APRA-regulated funds that cater principally for pensioners and some non-working and low-income individuals will also be adversely affected.
16 Feb 2018 | Riposte
Consolidation integrity bill introduced
The Government has finally introduced into the House of Representatives the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018 to give effect to proposed measures announced in various Federal Budgets since 2013.
14 Feb 2018 | Riposte | Real Estate
Affordable residential housing MIT measures
On 8 February 2018 the Government introduced the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018 into the House of Representatives. The Bill will enact the announcement in the May 2017 Budget about managed investment trusts investing in affordable residential housing. Individuals will also be eligible for an increased CGT discount where they invest in affordable residential housing. The Bill does not include the announced prohibition on holding residential property in a MIT. We understand however that this is not because the Government has changed its mind but rather because it is still considering its policy. It is expected that the Government will announce its position regarding MITs investing in residential property at a later time.
14 Feb 2018 | Riposte | Real Estate
The Review of Tax Treatment of Bare Trusts and Similar Arrangements
The Board of Taxation has today released a report into its review of the tax arrangements applying to bare trusts and similar arrangements. The Board has considered whether, and how, to legislate the current industry practice of looking through such trusts for income tax purposes. The treatment of bare trusts has been considered in reviews into the tax system by Governments in the past and although similar recommendations had been made, no changes to the Tax Law have followed. Let’s hope that this time the Government makes the recommended changes and aligns the Tax Law with industry practice.
07 Feb 2018 | Riposte | GST
Purchaser GST withholding - the final cut
On 7 February 2018 the Government introduced legislation for the GST withholding measure on sales of new residential premises and potential residential land. Due to successful lobbying, there are quite a few beneficial changes in the bill compared to the Exposure Draft released in November. However the measure is still due to take effect from 1 July 2018… not leaving a lot of time to change systems and contracts.
30 Jan 2018 | Riposte | Corporate and Mergers & Acquisitions
2018 M&A Tax Update
With 2017 being a big year for tax developments (though unfortunately few good news stories) and 2018 shaping up to be a strong year for M&A activity, we set out below our review of recent learnings and a summary of what we expect to be the key M&A tax issues in 2018.
22 Jan 2018 | Riposte | Real Estate | International
Changes to Victorian Absentee Owner Surcharge for Trusts
The Absentee Owner Surcharge (AOS) exemption has been extended to trusts and changes have been implemented for the calculation of AOS for trusts that are part of a chain of trusts.
09 Jan 2018 | Riposte | Real Estate
Corporate CIV Regime takes shape
The government has released draft legislation for the tax aspects of the new regime for corporate collective investment vehicles.
02 Jan 2018 | Riposte
Diverted Profits Tax: ATO Guidance
Australia’s Diverted Profits Tax (DPT) came into effect on 1 July 2017. Where it applies, it imposes tax at the rate of 40% on the amount of the diverted profit.
The ATO has now released two documents by way of guidance on the DPT.
21 Dec 2017 | Riposte | Real Estate
New fees on vacant residential property
The Government has introduced new vacancy fees on foreign owners of residential property vacant for more than six months of a year. A similar Victorian vacancy tax is also being imposed on owners of residential property situated in inner and middle suburban Melbourne.
21 Dec 2017 | Riposte
Top 10 tax developments 2017
To round out 2017, we invite you to join us in taking a look back at the biggest tax stories of the past 12 months with our annual Tax Top 10 list.
19 Dec 2017 | Riposte
Related party debt guideline finalised
The ATO has released its final Practical Compliance Guideline in relation to the pricing of cross-border related party debt, PCG 2017/4, just in time for Christmas.
14 Dec 2017 | Riposte | Employment & Superannuation
Employment taxes update - December 2017
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation, case law developments and ATO rulings affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – from the last 4 months (August to December 2017).
28 Nov 2017 | Riposte | International
Hybrid Mismatch Rules (Part 2)
The Government has released draft legislation to implement the OECD Hybrid Mismatch Rules. In this Riposte, we examine how the proposed suite of dedicated rules will change the tax treatment of hybrid financial instruments and transactions involving hybrid entities.
27 Nov 2017 | Riposte | International
Hybrid Mismatch Rules (Part 1) – Dividends and Franking
The Government has released draft legislation to implement the OECD Hybrid Mismatch Rules. In this Riposte, we examine how the proposed rules will impact dividends, principally the receipt of non-portfolio dividends from overseas. Our second Riposte will focus on the suite of further specific anti-hybrid rules.
09 Nov 2017 | Riposte | International
The US MAAL or DPT (maybe)
The Republicans in the US House of Representatives have released the long-awaited tax reform Bill, the Tax Cuts and Jobs Act. The Bill contains several measures which could affect Australian businesses with US operations.
09 Nov 2017 | Riposte | Real Estate | GST
Purchaser withholding on new homes
Draft legislation to combat phoenixing on new homes has been released, putting the onus on purchasers to withhold and pay to the ATO 1/11th of the price of their new home.
02 Nov 2017 | Riposte | Financial Services
Proposed changes to venture capital tax provisions miss the mark
The Government has released an exposure draft of proposed changes to the Early Stage Venture Capital Limited Partnership (ESVCLP), Venture Capital Limited Partnership (VCLP) and Early Stage Innovation Companies (ESIC) tax provisions.
02 Nov 2017 | Riposte | Real Estate | Employment & Superannuation
Payroll tax on service contracts – integral vs incidental functions
The recent decision in JP Property Services Pty Limited v Commissioner of State Revenue  NSWSC 1391 said contracts for service to perform integral functions in a client’s business invoke the employment agency payroll tax rules, but not contracts for incidental functions.
23 Oct 2017 | Riposte | Real Estate | Projects & Infrastructure
Commissioner refreshes long term construction contract ruling
As part of Project Refresh the Commissioner has released Taxation Ruling TR 2017/D8 which is a rewrite of Taxation Ruling IT 2450 and related taxation determinations dealing with the income tax treatment of long term construction contracts.
26 Sep 2017 | Riposte | Employment & Superannuation
MySuper outcomes - don't forget the tax (relief)!
A new reporting proposal for super funds currently before Parliament could see trustees recommending closure of under-performing MySuper products; but has anyone thought about the tax cost?
26 Sep 2017 | Riposte | Private Wealth
Crackdown on Phoenixing: Director Identification Numbers
The Government has announced a package of reforms in a bid to crackdown on illegal phoenixing activities, which will require every company director to register for a unique Director Identification Number. The Government also intends to consult on other measures targeted towards phoenix operators.
20 Sep 2017 | Riposte | Private Wealth
Corporate tax rate cut - passive income exclusion
The Government has released exposure draft legislation to clarify that the corporate tax rate reduction will not be available for corporate tax entities with predominantly passive income. There are areas of the drafting that may require amendment.
15 Sep 2017 | Riposte | Private Wealth
Private Groups and Trusts under ATO scrutiny
The ‘Tax Avoidance Taskforce – Trusts’ is targeting privately owned and wealthy groups involved in higher risk trust arrangements. The ATO has released a list of situations which attract the Taskforce’s attention and may result in severe sanctions for targeted taxpayers.
15 Sep 2017 | Riposte | Real Estate
Government significantly limits residential REITs
The Government has released for public consultation the exposure draft legislation containing the measures to implement its affordable housing MIT proposal.. However, at the same time the Government will deny MIT status to trusts that invest in residential premises that do not constitute affordable housing.
13 Sep 2017 | Riposte | Real Estate | Employment & Superannuation | International
Housing Affordability Bills Introduced
As part of the 2017-18 Federal Budget, the Government announced several measures to assist with housing affordability. Bills to implement some of these measures were introduced on 7 September 2017.
12 Sep 2017 | Riposte | Energy & Resources
Consolidation revised draft legislation
The Government has released revised draft legislation and an explanatory memorandum for the proposed consolidation integrity measures, announced in various Federal Budgets since 2013. Are we finally seeing light at the end of the tunnel?
31 Aug 2017 | Riposte | Employment & Superannuation
PCG 2017/D16 – long anticipated propagation ruling
The ATO last week foreshadowed its long anticipated go-ahead for large super funds using parcel selection to optimise CGT and franking credit outcomes, within limits.
04 Aug 2017 | Riposte | Private Wealth
Labor’s family trust distribution tax
In an audacious move to target income splitting, if elected, the ALP will introduce a minimum 30 per cent tax rate on all discretionary trust distributions made to adult beneficiaries.
01 Aug 2017 | Riposte | Employment & Superannuation
Employment taxes update - July 2017
Australian tax obligations affecting employers are always changing. This update addresses changes to legislation and case law developments affecting employers – including payroll tax, fringe benefits tax, income tax, superannuation and pay-as-you-go withholding – as well as the ATO’s interpretation of those laws and regulations from the last 4 months (April to July 2017).
25 Jul 2017 | Riposte | Employment & Superannuation
Super-size your first home savings
Are you or is one of your children saving to buy a first home? The Government yesterday released a draft of its first home super saver scheme.
19 Jul 2017 | Riposte | Employment & Superannuation
SG ‘Non-compliance’ – salary sacrifice for extra super
As part of the increased focus on superannuation guarantee (SG) non-compliance, the Government announced that it will legislate so that an employer cannot reduce their mandated SG contributions by an employee’s salary sacrificed voluntary contributions into superannuation.
17 Jul 2017 | Riposte | Private Wealth
A severe case of the penalties
The AAT has upheld the Commissioner’s decision to impose penalties of up to 95% of the tax shortfall. It is a timely reminder of the various powers that the Commissioner has to impose penalties on taxpayers.
06 Jul 2017 | Riposte | Private Wealth
ATO targets converted UPEs
The ATO has issued a warning that it is targeting arrangements where unpaid present entitlements of unit trusts within private groups are converted to equity. The unit trust may then make payments or loans to other members of the private group.
06 Jul 2017 | Riposte
Related party debt Guidelines - submission
ATO draft Guidelines on cross border related party debt will see many multinationals in the “Red” or very high risk zone, perhaps unfairly. Our submission argues for changes to the Guidelines before they are finalised.
05 Jul 2017 | Riposte | International
Some sanity for FATCA and CRS compliance
After some doubt, Treasury has agreed to industry's preferred model for handling one important aspect of FATCA and CRS compliance.
15 Jun 2017 | Riposte
Multilateral treaty – what does it mean?
A clearer picture of what the BEPS treaty will mean for Australia has been revealed in the wake of the MLI being signed by over 60 countries in early June 2017.
13 Jun 2017 | Riposte | Employment & Superannuation
Employee share schemes – ATO guidance
The ATO has provided guidance on the use of trusts in conjunction with employee remuneration and employee share schemes.
07 Jun 2017 | Riposte | Employment & Superannuation
ATO’s employer obligations compliance activities under review
The ATO's compliance activities concerning employer obligations are under comprehensive review in a report originally commissioned to address concerns about the uncertainty surrounding the employee/contractor distinction.
16 May 2017 | Riposte
Related party debt – ATO risk ratings
Cross-border related party debt is one of the hottest tax issues around. Close on the heels of the landmark decision in Chevron, the ATO has released a draft practical compliance guideline on assessing the tax risk associated with related party loans.
05 May 2017 | Riposte | Employment & Superannuation
Superbad SG non-compliance
The Senate Economics References Committee has released a report following industry concerns of considerable underpayment of mandated Superannuation Guarantee contributions.
02 May 2017 | Riposte | Energy & Resources
PRRT avoids Budget day blitz
The petroleum industry has dodged retrospective changes to the Petroleum Resource Rent Tax. They were ruled out by the Callaghan Report into the PRRT in light of sovereign immunity concerns.
28 Apr 2017 | Riposte | Employment & Superannuation
Super caps – let the complications begin!
New legislation seeks to limit the use of limited recourse borrowings to circumvent the pending new super caps. Retirement saving in Australia keeps getting more complicated.
27 Apr 2017 | Riposte
Corporate tax cuts – myth?
From 1 July 2018, the Australian Government will reduce the corporate tax rate from 28.5% to 27.5% for companies that are small business entities. Whilst the corporate tax cut appears generous, additional top-up tax may be paid at the Australian resident shareholder level.
21 Apr 2017 | Riposte
Chevron loses, again
The Full Federal Court has handed down its judgment in the Chevron case. Given that the hearing only began in late February, the omens were not good for the taxpayer – it doesn’t take long to write, ‘the taxpayer’s appeal is dismissed’.
20 Apr 2017 | Riposte
Trust law bites back
The recent decision of the Full Federal Court in Thomas is a timely reminder of two points: tax results are often dictated by the rules of the non-tax world, and even unattractive cases sometimes win.
27 Mar 2017 | Riposte | Real Estate | Projects & Infrastructure
Stapled structures consultation paper
The attack on stapled structures continues with the release of a consultation paper looking at stapled structures, the taxation of real property investments and the re-characterisation of trading income.
21 Mar 2017 | Riposte | Employment & Superannuation
Longevity super at long last
Much heralded and long-awaited tax rules for lifetime annuity products have been released keeping the Government framework for these new products on track for its promised 1 July 2017 start.
20 Mar 2017 | Riposte | Employment & Superannuation
Employment taxes update
Australian tax obligations affecting employers are always changing. This update looks at changes to the laws and regulations from September 2016 to March 2017.
15 Mar 2017 | Riposte
New ATO draft ruling on company tax residence
The ATO’s new draft ruling on company residence following Bywater and Hua Wang will create more uncertainty for taxpayers, and emphasises the importance of proper governance by company directors.
10 Mar 2017 | Riposte | Real Estate
A tax on vacant properties
The Victorian government is considering extending the land tax framework to impose a tax on vacant properties in some parts of Melbourne.
07 Mar 2017 | Riposte
Australian DPT vs UK DPT
Our comparison of the Australian and UK Diverted Profits Taxes reveals that in the majority of key areas, the Australian proposal is more onerous than the UK law.
07 Mar 2017 | Riposte | Real Estate | Private Wealth
‘Improvements’ – pre- or post-CGT assets?
According to the ATO, any intangible capital improvements made to a pre-CGT asset may be treated as a separate CGT asset.
20 Feb 2017 | Riposte | Employment & Superannuation
Employment taxes - a guide
Employers are subject to a collection of taxes which may differ between jurisdictions. Our guide provides an overview of the employment taxes, charges and levies applicable throughout Australia.
09 Feb 2017 | Riposte
Diverted Profits Tax introduced into Parliament
The Government has introduced the Diverted Profits Tax Bill 2007 and the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 into Parliament to implement the Diverted Profits Tax (DPT).
06 Feb 2017 | Riposte
The rise of tax risk management
The ATO has taken another step toward making tax risk management an integral part of good corporate governance with the release of an updated and lengthier version of its "Tax risk management and governance review guide".
03 Feb 2017 | Riposte | Employment & Superannuation
Employee share scheme essentials 2017
The taxation of employee share schemes can be complex. We set out some of the problems that can arise and provide tips on how to avoid them.
30 Jan 2017 | Riposte | Real Estate
Inequitable taxation of 'disturbance payments'
The tax treatment of ‘disturbance payments’ in connection with the compulsory acquisition of land proposed in a recently issued ATO class ruling has the potential to disadvantage some taxpayers while delivering a windfall to others.
29 Jan 2017 | Riposte | Energy & Resources
'Natural resource payments' to foreign residents
The interaction between domestic law and tax treaties on the taxation of “natural resource payments” paid to non-residents has come to a head in a recent draft Tax Ruling.
19 Jan 2017 | Riposte | GST | Real Estate
The meaning of 'GST' in property transactions
The McEwans case held that 'GST' can have different meanings in a contract. As a result of imprecise language, both parties to a sale of land subject to the margin scheme were left worse off.
12 Jan 2017 | Riposte | Real Estate
NSW land tax surcharge for foreign persons
Commencing from the 2017 land tax year, foreign persons will be liable to pay an additional land tax surcharge of 0.75% on residential land owned in NSW.
22 Dec 2016 | Riposte
Top 10 tax developments 2016
Season's Greetings! As 2016 comes to a close, we look back on the ten most significant tax developments of the year.
16 Dec 2016 | Riposte | International
Diverted Profits Tax: submission
Greenwoods & Herbert Smith Freehills, and Herbert Smith Freehills, have lodged a joint submission to The Treasury on the Diverted Profits Tax exposure draft legislation.
02 Dec 2016 | Riposte | International
Investing in foreign trusts
The ability of Australians to invest offshore and for Australia to operate as a regional financial centre may be seriously undermined by two new draft Tax Determinations addressing capital gains.
29 Nov 2016 | Riposte
Diverted Profits Tax: economic substance on steroids
Australia is to get a Diverted Profits Tax. The Government has released draft legislation and explanatory memorandum for the proposed DPT, announced in the 2016-17 Federal Budget and modelled off the UK’s DPT.
18 Nov 2016 | Riposte | GST
PCG makes GST barter transactions simpler
The ATO issued a Practical Compliance Guideline on the GST treatment of barter transactions which should eliminate pesky compliance issues for many taxpayers.
17 Nov 2016 | Riposte | Real Estate | GST
GST in property transactions: who bears the risk?
How important is it to get the details right in the particulars of a contract of sale? A recent case involving a GST clause in a real estate contract demonstrates how one word can be determinative of a tax liability.
17 Nov 2016 | Riposte | Energy & Resources
High risk exploration deductions
A long-awaited Guideline as to how the ATO will allocate its compliance resources to income tax deductions for exploration expenditure has been released in draft and the news is not good for all taxpayers.
15 Nov 2016 | Riposte | Employment & Superannuation
The Blank Case in the High Court - Pt II
The recent High Court judgment in Blank is an important example of a deceptively simple question: when does the income tax apply to rights and entitlements, and when does it apply just to receipts instead?
11 Nov 2016 | Riposte | Private Wealth
Private groups attracting ATO attention
In another attempt to help “get things right”, the ATO has released a list of behaviours, characteristics and tax issues of privately owned and wealthy groups that will attract the ATO’s attention.
08 Nov 2016 | Riposte | Employment & Superannuation
ESS: the indeterminate rights riddle
The concept of "indeterminate rights" complicates the important determination of when an employee share scheme right is granted. In TD 2016/17, the ATO weighs in with its view on what constitutes an indeterminate right.
07 Nov 2016 | Riposte | Real Estate
WHT rate cuts - but not for property sector
Two options for reducing withholding tax to 5% for certain CIV distributions are considered in a recent Treasury Discussion Paper. Unfortunately, neither option applies to income from investments in property.
31 Oct 2016 | Riposte | Real Estate
Draft ATO guidance on fixed trusts
Determining the important question of whether a trust is a ‘fixed trust’ has always been a tightrope walk between its strict definition and how the ATO might exercise its discretion. A new draft guideline considers how the ATO will use its discretion to treat a trust as a fixed trust in the context of the trust loss rules.
31 Oct 2016 | Riposte | Employment & Superannuation
Proportional fun with super cap
If even a handful of a super fund’s members have pension account balances over $1.6m things could get complicated when the cap is introduced on 1 July next year.
25 Oct 2016 | Riposte | Private Wealth
Tax transparency – a looming issue for private groups?
Greater tax transparency is a looming issue for privately owned and wealthy groups with numerous measures already having been introduced and other measures under consideration by Government.
21 Oct 2016 | Riposte
Simplified FBT approach for fleet cars
The ATO will generally accept the application of a single average business use percentage across all work fleet cars for the operating cost method. That includes cars where the logbook is missing or incomplete.
13 Oct 2016 | Riposte | International
Applying the “participation test”
Draft Tax Ruling TR 2016/D2 offers helpful guidance for taxpayers and advisers when applying the “participation test” in Subdivision 768-A to less straightforward situations.
11 Oct 2016 | Riposte | Real Estate | Financial Services | Projects & Infrastructure
Related schemes & 974-80 ED at last
Exposure draft legislation intended to address the Board of Taxation’s recommendations concerning s.974-80 and the related schemes provisions in the debt/equity rules has finally been released. Do the proposals provide clarity to taxpayers who are not on all fours with the examples?
29 Sep 2016 | Riposte | Energy & Resources
No clarity on valuing mining information
The long running saga of how mining, quarrying or prospecting information should be valued in determining whether a company is “land rich” for CGT purposes continues with the Federal Court decision in AP Energy Investments and the ATO's Decision Impact Statement.
27 Sep 2016 | Riposte | Employment & Superannuation
Lower ceiling, narrower gateways
The Government has announced substantive changes to its superannuation proposals. Surprisingly, some people with relatively modest means will be among those most affected.
13 Sep 2016 | Riposte | Private Wealth
“Every year counts” for private groups
The ATO's key initiatives for private groups in 2016/2017 are outlined in the latest update on its Reinvention program: “Every year counts for Privately Owned and Wealthy Groups”.
24 Aug 2016 | Riposte | Financial Services
The expanding domain of hybrid mismatch arrangements
The ATO is currently focussing on offshore branches, the “law” and “lore” in relation to which are extremely complicated. The complexity is likely to increase as a result of the OECD’s new proposal to apply BEPS hybrid mismatch-type principles to offshore branch structures.
16 Aug 2016 | Riposte | Energy & Resources
ATO colour codes hubs
The ATO has released a discussion paper on its draft practical compliance guideline for offshore hubs. The purpose of the guideline is for taxpayers to understand the ATO’s view of the transfer pricing risk applicable to their offshore hub and the likelihood of ATO compliance activity.
16 Aug 2016 | Riposte | Financial Services
Offshore permanent establishments – a current area of ATO focus
Last week, the ATO issued three further Taxpayer Alerts effectively operating as a warning in relation to certain types of taxpayer behaviour which they regard as egregious. One of the Taxpayer Alerts, TA 2016/7 applies to “Arrangements involving permanent establishments”.
21 Jul 2016 | Riposte
The Blank case in the High Court
The High Court will soon hear the appeal in Blank, a dispute about a foreign share-based employee incentive scheme with $100m in taxable income at stake. The case has already divided the Full Federal Court and will raise a plethora of issues.
11 Jul 2016 | Riposte
Thinking about Brexit
Following the UK referendum, the window has started closing on ensuring tax structures that will handle a post-Brexit world. Whether it will finally shut in 6 months or 2 years is unclear, but it will shut.
05 Jul 2016 | Riposte
Fictitious companies, dividends, loans and penalties
The Full Federal Court has handed down a split decision on a complex arrangement involving limited partnerships, dividends on a special class of shares, shareholder loans and the penalty regime. It is a surprising decision because of the disagreements between the three judges on some fundamental issues. What is not surprising is that this is yet another example of the ATO’s appetite to challenge complex private structures.
30 Jun 2016 | Riposte
The Election -- tax issues
Tax issues have featured prominently in the pre-election debate. We summarise here some of the key battlegrounds.
03 Jun 2016 | Riposte | Private Wealth
Tax adviser or ATO informer? The Mandatory Disclosure proposal
As part of the 2016-17 Federal Budget, the Government announced that it will introduce Mandatory Disclosure Rules to require tax advisors (and in certain circumstances taxpayers) to report ‘aggressive tax arrangements’ to the ATO.
26 May 2016 | Riposte | GST
GST treatment of digital currency likely to change
Since the Australian government’s policy announcement concerning the GST treatment of digital currency in March 2016, it was clear that the tax treatment of digital currencies was likely to change, the question however, is how.
13 May 2016 | Riposte | Private Equity
Can Australian startups use convertible notes to bridge the funding drought before 1 July? Director Toby Eggleston tackles this question in a post that previously appeared on medium.com.
11 May 2016 | Riposte | Private Wealth
Panel session with Jeremy Hirschhorn, ATO
On 11 May 2016, Greenwoods and our associated law firm, Herbert Smith Freehills, hosted a panel session in Melbourne titled "Are you on the ATO's radar?", which included ATO Deputy Commissioner, Public Groups, Jeremy Hirschhorn. Our Riposte summarises the key points raised in the session.
10 May 2016 | Riposte | Corporate and Mergers & Acquisitions
Greenwoods' Director Toby Eggleston and HSF partner Peter Dunne were interviewed by Mark Pesce for the TWISTA podcast. The recent changes to employee share scheme rules and how they impact on startups was the focus of their discussion. Listen now!
06 May 2016 | Riposte | Private Wealth
Budget 2016 - Reflections for large private groups and HWIs
The 2016-17 Federal Budget confirms that the ATO will continue to be heavily focused on the tax affairs private groups (and their tax advisors), however, there will be some welcomed relief on Division 7A and a lower company tax rate (eventually).
04 May 2016 | Riposte | Real Estate
MIT bill passed
The Senate approved the Bill to enact the specific tax regime for managed investment trusts. The MIT Regime is a welcome introduction of rules that have taken may years to formulate.
04 May 2016 | Riposte | Corporate and Mergers & Acquisitions
FIRB & tax 2.0
One Budget announcement by the Treasurer seems to have slipped by many... A posting on the FIRB website revises certain tax conditions that were announced in February - generally for the better.
27 Apr 2016 | Riposte
ATO on alert for multinational tax avoidance
The ATO released four Taxpayer Alerts on 26 April 2016 targeted at tax avoidance by multinational companies, suggesting that it has many weapons available for challenging existing and emerging structures.
27 Apr 2016 | Riposte | Private Wealth
Senate Committee reports (again)
The Senate Economics References Committee’s inquiry into Corporate Tax Avoidance released a second report: Gaming the System. Its sole recommendation is to extend the committee's term to September 2016 ‘to explore the implications arising from the Panama papers’.
05 Apr 2016 | Riposte | Private Wealth
Panel session with Jeremy Hirschhorn, ATO
On 4 April 2016, Greenwoods and our associated law firm, Herbert Smith Freehills, hosted a panel session titled "Are you on the ATO's radar?", which included ATO Deputy Commissioner, Public Groups, Jeremy Hirschhorn. Our Riposte summarises the key points raised in the session.
24 Mar 2016 | Riposte | Corporate and Mergers & Acquisitions
Innovation, startup and fintech tax update
Investors and participants in the startup and fintech sectors have been in the spotlight this week with the introduction of tax legislation and Treasury announcements targeted at them. What is in store?
17 Mar 2016 | Riposte | Financial Services
Changes to ruling on FITO caps
The ATO has issued an Addendum to its 2014 Ruling on the impact on FITOs of losses on FX derivatives. The Addendum should be welcome news for some participants in the banking industry.
07 Mar 2016 | Riposte | International
The OECD BEPS program continues its steady march forward. We provide a quick summary of the key international developments since October 2015.
01 Mar 2016 | Riposte | Private Wealth
ATO reinvents, targets private groups
Privately owned groups are a key target of the ATO's “Reinvention program” and will need to determine what the ATO's new approach means for them.
24 Feb 2016 | Riposte | Real Estate
New reporting for share and unit transactions
Share and unit transactions of listed companies, listed and unlisted unit trusts and certain other trustees are subject to new reporting requirements that enhance the ATO's data matching capabilities.
17 Feb 2016 | Riposte | Projects & Infrastructure
Infrastructure - where is the risk?
The ATO has circulated a document for consultation purposes which highlights certain infrastructure related issues it considers high risk from a compliance perspective. The time is right for industry participants to consider mitigating their risks.
01 Feb 2016 | Riposte
Our submission on the Board of Taxation's consultation paper on tax transparency has been lodged.
22 Dec 2015 | Riposte
Top 10 tax developments in 2015
Season's Greetings! With the holidays around the corner and the year coming to a close, we look back on the ten most significant tax developments from 2015.
11 Dec 2015 | Riposte
New fronts in the campaign against deductions
In the rush to the end of the year, a new reference to the House of Representatives’ Standing Committee on Economics was announced. Notably, interest deductibility for businesses was singled out for special attention.
08 Dec 2015 | Riposte
National Innovation & Science Agenda
The much anticipated National Innovation and Science Agenda includes a number of tax proposals. These include tax concessions for venture capital, incentives for early investors and amendments to the company loss rules.
08 Dec 2015 | Riposte | Corporate and Mergers & Acquisitions
Earn-outs and non-resident CGT withholding
Long-awaited rules creating a withholding tax regime for certain capital gains of non-residents and amendments to the taxation of earn-outs are finally in a bill before before Parliament.
26 Nov 2015 | Riposte | Corporate and Mergers & Acquisitions
Capital return class ruling takes off
A capital return by Qantas in circumstances where current year profits were applied to accumulated losses does not attract the application of anti-capital streaming rules according to the ATO.
23 Nov 2015 | Riposte
ATO targets ‘contrived’ partnerships
To deter taxpayers from adopting wealth extraction strategies, the ATO is targeting certain 'contrived' partnership arrangements in its latest Taxpayer Alert: TA 2015/4.
10 Nov 2015 | Riposte | Projects & Infrastructure
ATO infrastructure framework
The ATO has released helpful but non-binding guidance on the income tax and GST consequences for public private partnerships adopting securitised license structures. Will it be able to keep pace with changing PPP structures?
05 Nov 2015 | Riposte
Revealing tax information
Secrecy surrounding taxpayer information is a thing of the past. Tax transparency is the order of the day with projects being undertaken around the world to facilitate collecting, sharing and reporting tax information.
29 Sep 2015 | Riposte
Worldwide FATCA on its way
Treasury released an exposure draft of legislation that will unleash the OECD’s Common Reporting Standard in Australia. The CRS will apply much like FATCA, but at least one of its points of difference may be unwelcome.
24 Sep 2015 | Riposte | Financial Services
Swaps: why so difficult?
Draft taxation ruling TR 2015/D3 continues the long, sad attempt to deal with the tax implications of what are now very common derivative financial instruments: swaps.
15 Sep 2015 | Riposte
New PM: what now for tax reform?
The change of Prime Minister, and probably Treasurer, poses an obvious question: what are the implications for the Tax White Paper process, and for Australia’s future tax policy more generally?
01 Sep 2015 | Riposte | GST
GST - direct and indirect objectives
When a taxpayer spends money the tax question is usually, what did it get for its money? Often the answer is obvious, but sometimes taxpayers want to argue that the law should look beyond the obvious. The Full Federal Court’s decision in Rio Tinto raises this dilemma in a GST context.
01 Sep 2015 | Riposte | GST | Private Equity
Bitcoin: GST changes looming
An Australian Senate Committee Report slates a major shake-up of the tax treatment of digital currency including a reversal of the ATO view that it is subject to GST.
25 Aug 2015 | Riposte | Corporate and Mergers & Acquisitions
Scrip for scrip amendments
Legislation amending the scrip for scrip rules has been introduced in Parliament with some welcome improvements from the April ED.
20 Aug 2015 | Riposte
Tax avoidance - interim report
The Senate Standing Committee on Economics has released an interim report from its inquiry into corporate tax avoidance. Already the politics of this committee is visible and affecting its progress.
18 Aug 2015 | Riposte | Employment & Superannuation
Super reserve allocation pain
Super funds need reserves for a variety of reasons, but using them can cause excess contributions tax for members – ATO ID 2015/21.
14 Aug 2015 | Riposte | GST
Part IVA – revisions to ATO Practice Statement
The ATO has released draft revisions to its 2005 Practice Statement on Part IVA for significant taxpayer-favourable case law developments and analysis of the “new” Part IVA enacted 2 years ago.
07 Aug 2015 | Riposte
AusNet Transmission: another capital v. revenue mystery
Victorian energy distributor AusNet has lost its appeal to the High Court, which held that a series of payments made to the Victorian Government following the privatisation of Victoria’s electricity network in 1997 were non-deductible.
07 Aug 2015 | Riposte | International
More Action on Budget BEPS Announcements
Further BEPS-related Exposure Draft legislation targeting large multi-nationals has been released, proposing to implement an increase in penalties for tax avoidance schemes and the OECD’s recommended country-by-country reporting requirements.
05 Aug 2015 | Riposte | Employment & Superannuation
Application of the indeterminate rights rule
The Federal Court has clarified how the indeterminate rights rule in Division 83A operates in respect of the grant of shares and options subject to shareholder approval.
30 Jul 2015 | Riposte | International
First FATCA deadline 31 July
The great American experiment of getting the world to be your tax collector is about to trip up on its first Australian deadline.
28 Jul 2015 | Riposte | Employment & Superannuation
Div 293 tax reality for DB super
Division 293 assessments for 2013/14 are about to issue to members of defined benefit plans with personal earnings over the $300,000 threshold. Now there’s a complicated story!
23 Jul 2015 | Riposte
Board of Tax to address 2 BEPS measures
In the midst of the Budget preparations, Treasurer Joe Hockey took time out to refer two matters to the Board of Taxation. The details of these BEPS-related projects are now public. What's in store for hybrids? What might a framework for voluntary disclosures of tax information by multinationals look like?
15 Jul 2015 | Riposte | Employment & Superannuation
MySuper rolls – extensions with losses haircut
Relief for mandated transfers to MySuper nears completion with caveated further rollovers announced by the Assistant Treasurer for internal fund transfers.
08 Jul 2015 | Riposte
TA 2015/2: an update
ATO withdraws class ruling dealing with fully underwritten dividend reinvestment plan in respect of a special dividend.
07 Jul 2015 | Riposte | Employment & Superannuation
Payroll tax refunds for DB super
Qantas Airways: The NSW Supreme Court has ruled that payroll tax does not apply to employer contributions funding defined benefits accruing to service before extension of the tax to super.
03 Jul 2015 | Riposte | Employment & Superannuation
Employee share changes now law
The Bill amending the taxation of employee shares and options has now received royal assent and takes effect from 1 July 2015. Concurrent with the new law, the ATO has released standard document templates and a legislative instrument governing safe harbour valuations has come into effect.
02 Jul 2015 | Riposte | Employment & Superannuation
Safe landing for segregated assets
After navigating some fairly black storm clouds TD 2015/D6 appears set to ensure life companies will not be taxed on routine VPST asset rollovers.
24 Jun 2015 | Riposte | Financial Services
Sanity prevails on TR 2014/7
The ATO has issued an amended version of TR 2014/7 dealing with gains and losses from FX derivatives. Though issues remain in the revised version, the withdrawal of certain aspects of the initial ruling concerning source are welcome.
23 Jun 2015 | Riposte | Employment & Superannuation
Labor’s proposed $75,000 earnings cap on super concessions caught public attention but just how new, and how restrictive, would it be?
17 Jun 2015 | Riposte | Employment & Superannuation
Committee stamps share plan changes
The Senate Economics Legislation Committee has rubber stamped the proposed employee share and option plan changes leaving a number of shortcomings in the legislation as it progresses through the Senate.
15 Jun 2015 | Riposte | Energy & Resources | Employment & Superannuation
Non-remote fly-in fly-out win
The Full Federal Court overturned the lower court decision in John Holland Group holding that FBT was not owed on certain non-remote fly-in fly-out flights provided by the employer. However, the same outcome will not arise for all “non-remote” fly-in fly-out arrangements.
08 Jun 2015 | Riposte | Private Equity
Income tax & crowdfunding
Crowdfunding - the act of obtaining funding online from a wide range of people - is a global phenomenon that allows individuals and businesses to raise funds in various ways for infinite purposes. But what are the tax consequences of the various forms of this new form of finance?
05 Jun 2015 | Riposte
Board of Taxation report deluge
On 4 June 2015, the Government announced the release of five Board of Taxation reports as part of its ongoing tax reform process. The reports cover the debt/equity rules, CIVs, the thin cap rules, PEs and Div.7A.
04 Jun 2015 | Riposte | Employment & Superannuation
A bill tabled in Parliament on 28 May 2015 takes some more tentative steps to simplify employer superannuation obligations. It relaxes some choice of fund obligations but other simplifications are either scheduled for next year, explicitly rejected or just not taken up.
28 May 2015 | Riposte | Employment & Superannuation
Superannuation on alert
In spite of the ‘no changes to super’ policy announced with the Federal budget, the Prime Minister last week made room to close ‘loopholes’ and improve the ‘integrity’ of the system. The question is, what is a ‘loophole’?
11 May 2015 | Riposte
Pre-Budget international tax announcements
Two international tax integrity measures that will be dealt with in tomorrow’s Federal budget were announced by the Treasurer today. The details of these measures will be eagerly anticipated by multinationals and offshore providers of digital products and services.
08 May 2015 | Riposte
Channel Pastoral – Mongoose re-examined
The Full Federal Court decision in Channel Pastoral Holdings re-considered the interaction between Part IVA and the tax consolidation rules previously considered by the Full Federal Court in Mongoose. Importantly, all judges agreed that Part IVA can operate in a consolidation context, a question left somewhat open following Mongoose.
07 May 2015 | Riposte
The ATO has issued Taxpayer Alert TA 2015/2 warning taxpayers of its concern with companies paying franked dividends funded by the issue of shares. The net it has cast has the potential to capture a wide array of transactions.
05 May 2015 | Riposte
Statutory remedial power for Commissioner
The Government announced that they will provide the Commissioner of Taxation with a Statutory Remedial Power to allow for a more timely resolution of certain unforeseen or unintended outcomes in the Taxation and Superannuation Law. What safeguards does it contain?
29 Apr 2015 | Riposte | Corporate and Mergers & Acquisitions
ED: Scrip for scrip
Proposed amendments in exposure draft legislation are generally of a technical nature but, as currently drafted, one amendment could have significant implications in relation to cash and scrip bids.
28 Apr 2015 | Riposte | Corporate and Mergers & Acquisitions
Integrity for consolidation?
Treasury has released an Exposure Draft: Consultation - Restoring integrity to the consolidation regime. The legislation covers 5 measures announced in past Federal Budgets - but what have they missed?
24 Apr 2015 | Riposte
Following the tax chatter
Australia has not been wanting for tax chatter in the last few weeks. This RIposte lays out some of the Government's post-tax discussion paper public pronouncements on tax. Can a common thread be found in all these conversations?
24 Apr 2015 | Riposte | Corporate and Mergers & Acquisitions
Resolution for earn-outs?
Treasury has finally released Exposure Draft legislation to fix the mess for earn-outs created by the ATO’s controversial 2007 draft ruling. Have they succeeded in resolving the confusion?
09 Apr 2015 | Riposte | Real Estate
New Regime for MITs
Long-awaited exposure draft legislation addressing the managed investment trust taxation regime has finally been released. The ED contains a package of eight key measures which will apply only to certain MITs and which may prove a mixed bag for industry.
02 Apr 2015 | Riposte
Section 974-80 to be repealed!
The Assistant Treasurer has today accepted a Board of Tax recommendation to repeal and replace the long contentious s 974-80 override of tax deductible debt characterisations.
30 Mar 2015 | Riposte
Tax Discussion Paper
The Government has released its long awaited Tax Discussion Paper. It contains a curious mix of approaches as to how taxes can be raised despite the stated goal of reducing taxes.
26 Mar 2015 | Riposte | Corporate and Mergers & Acquisitions | Employment & Superannuation
Share plan changes tabled and diced
Amendments to the rules governing the taxation of employee share plans were tabled on 25 March make a proposed tax regime for start-up company options viable. That said, there is little extra for public company offers.
18 Mar 2015 | Riposte | Corporate and Mergers & Acquisitions
Treasury Consultation: MEC groups
Treasury released a consultation paper on the options identified in the MEC group tripartite review. Find out what the paper covers in our latest Riposte.
13 Mar 2015 | Riposte | Financial Services
OBU rules: Exposure Draft
Exposure Draft changes to the OBU rules have been released. Some historic problems have been addressed, but is this another lost opportunity to properly reform a struggling regime?
03 Mar 2015 | Riposte
BEPS' first incursion into Australia
The ALP revealed it is looking to BEPS for its tax policy when it announced its approach to stopping multinational tax avoidance. In these troubled political times, will this announcement influence the policies of the current Government? If so, what can we expect?
26 Feb 2015 | Riposte
BEPS in February
The OECD has been gaining momentum on its BEPS agenda throughout the month of February with a series of releases for the G20 Finance Ministers' meeting in Turkey. This Riposte updates our 6 February 2015 Tax Brief. The BEPS avalanche continues...
09 Feb 2015 | Riposte | Financial Services
Instalment Trusts: ED
On 19 January 2015, Treasury released exposure draft legislation which would amend the income tax law to provide “look-through treatment” for “instalment trusts”. Do we really need this legislative fix?
16 Jan 2015 | Riposte | Employment & Superannuation
Employee Share Schemes: ED
Exposure Draft legislation for the Government's proposed changes to the taxation of employee shares and options plans has been released and it includes some changes not previously announced.
15 Jan 2015 | Riposte | Energy & Resources
Interest realignment & farm outs: ED
Treasury has released exposure draft legislation that that affects 'interest realignment arrangements’ and ‘farm-in farm-out arrangements'. How do they address the s.40-80 amendments?
08 Jan 2015 | Riposte
Right to future income update
The ATO released 3 Taxation Determinations addressing the transitional provisions of the right to future income rules. Which RTFI rules apply to your situation?
22 Dec 2014 | Riposte
Top 10 Tax Developments 2014
Season's Greetings! To wrap up the year past, we have compiled a list of the top ten tax developments.
18 Dec 2014 | Riposte | Energy & Resources
Finality on exploration for PRRT purposes
The ATO released the latest episode on the exploration saga with its Taxation Ruling TR 2014/9 - concerning the meaning of "involved in or in connection with exploration for petroleum" for PRRT purposes. What does it include? What does it exclude?
18 Dec 2014 | Riposte
25-90 survives for now
Buried in the Treasurer's MYEFO statement was some news concerning the future of s.25-90.
11 Dec 2014 | Riposte | Financial Services
FX hedging ruling
The ATO has just finalised Taxation Ruling TR 2014/7 on the treatment of FX hedge gains and losses under the foreign income tax offset regime. There are a lot of pieces to consider in solving this puzzle.
09 Dec 2014 | Riposte | Financial Services
Murray on superannuation and retirement incomes
There were three superannuation and retirement income tax recommendations in David Murray’s Financial Services Inquiry report on Sunday. Consistent with its brief however, the report hedges to some extent by inviting further consideration in next year’s Tax While Paper. This Riposte outlines the key take away points.
08 Dec 2014 | Riposte
Murray report poses big questions
The Treasurer released the Murray report into Australia’s financial system on Sunday morning. Given the significance of previous similar inquiries and the focus of the interim report in July, it was expected that Murray would be similarly momentous. What, if any, surprises did it reveal?
04 Dec 2014 | Riposte | Energy & Resources
Stamp duty concession for farm-ins
The Queensland Government is proposing a stamp duty concession for qualifying farm-in agreements. How will it apply? What are the key issues?
26 Nov 2014 | Riposte | Real Estate
Addendum to TR 2002/14
An addendum to TR 2002/14 reaffirms the ATO's changed position on capital growth payments reflected in its recent Decision Impact Statement.
25 Nov 2014 | Riposte
Next steps on treaty abuse
The OECD has just released another public discussion draft further elaborating its proposals to refine its model treaty provisions on the limitation of benefits article and asking for comments. Who might be adversely affected under the current draft? What might be the exceptions?
14 Nov 2014 | Riposte | Corporate and Mergers & Acquisitions
Return of off-market share buy-backs
As companies line up to return cash to shareholders, off market share buy-backs have returned to the scene this year. We’ve rarely seen them since the GFC, so why their return now?
13 Nov 2014 | Riposte | Real Estate
A win for retirement village operators
The ATO has finally accepted that capital growth payments made to retirement village residents are deductible. Taxpayers can now lodge amendments to claim them.
12 Nov 2014 | Riposte
974-80 - half a step forward?
The ATO has just released 2 draft TDs on s.974-80. Although they represent a step in the right direction for taxpayers, issues still remain.