Weekly Tax Highlights

Highlights to 3 August 2018

ATO documents

Draft Tax Determinations

TD 2018/D4 Income tax: thin capitalisation – valuation of debt capital for the purposes of Division 820

TD 2018/D5Income tax: what type of costs are debt deductions within scope of subparagraph 820-40(1)(a)(iii) of the Income Tax Assessment Act 1997?

Draft Law Companion Ruling

LCR 2018/D6Expansion of the taxable payments reporting system to contractors in the courier and cleaning industries

Updated Draft Practical Compliance Guideline

PCG 2017/4DC ATO compliance approach to taxation issues associated with cross‑border related party financing arrangements and related transactions
The new draft Schedule 2 to PCG 2017/4 sets out specific risk indicators for derivative arrangements.

Other news

Draft legislation to improve the integrity of the thin capitalisation rules

On 1 August 2018, the Government released draft legislation to implement thin capitalisation integrity rules as announced in the 2018-19 Budget from income years commencing on or after 1 July 2019. The changes will require entities to align the value of their assets for thin capitalisation purposes with the value included in their financial statements and will ensure that foreign controlled Australian consolidated entities and multiple entry consolidated groups that have foreign operations are treated as both outward and inward investing entities. 

Progress of legislation

Federal Parliament will resume on Monday, 13 August 2018.

As at 03.08.18

Bill

Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Bill 2018

Description

Amends the ITAA 1997 to implement part of the OECD hybrid mismatch rules. Amends the Film Producer Offset, introduces exemptions for the ICC Twenty Twenty World Cup and changes the list of Deductible Gift Recipients.

Status

Introduced into Senate 27.6.18.  

Bill

Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018

Description

Small business entities can access expanded accelerated depreciation rules until June 30 2019.

Status

Introduced into Senate 25.6.18.

Bill

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

Description

Increased penalties and a one off amnesty for employers not meeting their superannuation obligations.

Status

Introduced into Senate 25.6.18.

Bill

Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018

Description

Implements the Government’s Income Tax cuts.

Status

Received Assent 21.06.18. Act No.47 of 2018.

Bill

Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018

Description

The Bill makes amendments to the Multinational Anti-Avoidance Law, the Small Business CGT Concessions, and Fintech and Venture Capital.

Status

Introduced into Senate 18.6.18

Bill

Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018

Description

The Bill gives the force of law in Australia to the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).

Status

Introduced into House of Reps 28.3.18.

 

Bill

Treasury Laws Amendment (2018 Measures No. 4) Bill 2018

Description

Implements the Government’s Superannuation Guarantee (SG) integrity package, extends Single Touch Payroll, and changes Super Fund reporting requirements.

Status

Introduced into Senate 25.6.18.

 

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 Senate 19.3.2018.

 

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 Senate 26.6.18.

 

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 Senate 18.6.18

 

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 Senate 12.2.18.

 

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. Given the Government’s announcement that the increase to the Medicare Levy will be scrapped, this Bill may not proceed

Status

Introduced into 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 Senate 12.2.18. On 28 June 2018, the Government announced that it will not proceed with this second stage of company tax cuts to extend the lower corporate tax rate to all corporate tax entities.

 

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.

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