Weekly Tax Highlights

Highlights to 5 April 2019

Budget 2019/20


The 2019-2020 Federal Budget was released on 2 April 2019. Our Tax Brief outlines the main tax measures and what they will mean for Australian businesses.

ATO Documents


Taxation ruling
TR 2019/1 Income tax: when does a company carry on a business?

Draft taxation determinations
TD 2019/D3 Income tax: in the definition of ‘financial intermediary business’ what is meant by ‘a business whose income is principally derived from the lending of money’?
TD 2019/D4 Income tax: can a company that carries on a business in a general sense as described in TR 2019/1 but whose only activity is renting out an investment property claim the CGT small business concessions in relation to that investment property?

Draft taxation ruling
TR 2019/D2 Income tax: thin capitalisation - the arm's length debt test

Draft law companion ruling
LCR 2019/D1 OECD hybrid mismatch rules - targeted integrity rule

Draft practical compliance guideline
PCG 2019/D1 Retirement villages: ATO compliance approach - exit allocable cost amount calculation at step 4 for certain resident liabilities under lease premium or loan/lease occupancy agreements

GST ruling – draft amendment
GSTR 2004/4DC1 Goods and services tax: assignment of payment streams including under a typical securitisation arrangement

Class rulings
CR 2019/23Income tax: Macquarie Group Limited – Macquarie Group Capital Notes 4
CR 2019/24 Income tax: Thinksmart Limited – return of share capital (ordinary shareholders)
CR 2019/25 Income tax: Thinksmart Limited – return of share capital (depositary interests)
CR 2019/26 Income tax: Members Equity Bank Limited – Series 2 Capital Notes

Decision impact statement
TAD 41 of 2017 H3/2018 Pintarich v Deputy Commissioner of Taxation

Other news


Stapled structure amendments receive Royal Assent
On 5 April, the Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019 which implements integrity measures in relation to stapled structures, thin capitalisation, the withholding tax exemption for superannuation funds for foreign residents and the sovereign immunity tax exemption received Royal Assent.

Tax cases


FCT v Resource Capital Fund IV LP [2019] FCAFC 51
The Full Federal Court has allowed the Commissioner’s appeal and held that profits made by two overseas private equity corporate limited partnerships on the sale of their shares in an Australian mining company were taxable in Australia, having regard to the source of the income and the US tax treaty.

Paule & Ors v FCT [2019] FCA 394
The Federal Court has held that a capital gain made on the sale of shares was not a discount capital gain, following a series of roll-overs.

Progress of legislation


As at 05.04.19

Bill

Treasury Laws Amendment (Mutual Reforms) Bill 2019

Description

Introduced by the Government into the Senate to reform the mutual sector including amendments to the Corporations Act and related tax amendments.

Status

Received Royal Assent 05.04.19. Act No 37 of 2019.

Bill

Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019

Description

Prohibit creditor-defeating dispositions of company property; improve accountability of resigning directors; allow the Commissioner to collect estimates of anticipated GST liabilities; make company directors personally liable for GST; authorise the Commissioner to retain tax refunds.

Status

Introduced into House of Reps 13.02.19.

Bill

Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019

Description  

Increases the threshold below which amounts can be immediately deducted by small businesses and extends the time period during which small business entities can access expanded accelerated depreciation rules.

Status

Received Royal Assent 06.04.19. Act No 51 of 2019.

Bill

Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019

Description

Implements integrity measures in relation to stapled structures, thin capitalisation, withholding tax exemption for superannuation funds for foreign residents and the sovereign immunity tax exemption. The Bill was amended in relation to premises used primarily for the provision of disability accommodation and student accommodation.

Status

Received Royal Assent 05.04.19. Act No 34 of 2019.

Bill

Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018

Description

Broadens the SGE definition, amends the thin capitalisation asset valuation rules, better targets the R&D Tax Incentive, changes the GST Act in relation to online hotel bookings and removes the luxury car tax for re-imported cars refurbished overseas.

Status

Introduced into House of Reps 20.09.18. Report released.

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 25.06.18.

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 19.03.18.

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 Senate 26.06.18.

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

Superannuation (Objective) Bill 2016

Description

Superannuation reform package.

Status

Introduced into Senate 23.11.16.

 

 

 

Share