Weekly Tax Highlights

Highlights to 7 December 2018

ATO documents

Draft law companion ruling

LCR 2018/D8Expansion of the taxable payments reporting system to road freight, security, investigation or surveillance, and information technology services

Taxation determination

TD 2018/16 Income tax: payments received under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018

Practical compliance guideline

PCG 2018/8 Enterprise Tax Plan: small business company tax rate change:  compliance and administrative approaches for the 2015–16, 2016–17 and 2017–18 income years

Draft practical compliance guideline – update

PCG 2018/D3 Income tax: central management and control test of residency: identifying where a company’s central management and control is located

This draft practical compliance guideline has been updated to extend the transitional period during which the Commissioner will not apply his resources to review or seek to disturb a foreign-incorporated company's status as a non-resident from 13 December 2018 to 30 June 2019.

Class rulings

CR 2018/52 Income tax:  assessable income: Australian Federal Police deployed to Jordan

CR 2018/53 Fringe benefits tax: employer clients of Police Financial Services Limited, trading as BankVic, who are subject to the provisions of section 57A or 65J of the Fringe Benefits Tax Assessment Act 1986 that make use of the BankVic Everyday Expenses Card

CR 2018/54 Income tax: demerger of Cowan Lithium Limited by Tawana Resources NL

Other news

ATO releases discussion paper on earnout arrangements

On 3 December, the ATO released a discussion paper for comment on the need and priority for additional public advice and guidance on the income tax treatment of arrangements (commonly referred to as 'earnouts') entered into in the context of the sale of a business asset or interests in an entity carrying on a business. Comments are due by 1 February 2019.


ATO releases details of Action Differentiation Framework

On 6 December, the ATO updated its website to outline details of its Action Differentiation Framework (ADF), which is the ATO’s new strategic approach to build engagement excellence with large public and multinational businesses. The framework differentiates between taxpayers, by size, transparency of the taxpayer’s engagement with the ATO, the choices and behaviours evidenced in the taxpayer’s tax affairs and the taxpayer’s risk appetite.

Senate amends tax Bill to remove self-assessment of effective life of certain intangible depreciating assets

On 5 December, the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 was passed by the Senate with an amendment to remove Schedule 2 (to provide taxpayers with the choice to self-assess the effective life of certain intangible depreciating assets they start to hold on or after 1 July 2016, rather than using the statutory effective life currently specified in the law) and now returns to the House of Representatives.

Progress of legislation

Federal Parliament has now completed its 2018 sittings and is scheduled to return on Tuesday, 12 February 2019.

As at 07.12.18

Bill

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

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.

Status

Introduced into House of Reps 20.09.18.

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.

Bill

Treasury Laws Amendment (2018 Measures No 5) Bill 2018

Description

Technical amendments to the AMIT regime; extending deductible gift recipient status to entities promoting Indigenous languages.

Status

Introduced into the Senate 18.10.18.

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 25.06.18.

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 25.06.18.

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

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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