What happened in tax in August?

Written by TaxCounsel Pty Ltd

The following points highlight important federal tax developments that occurred during August 2018.

Each month, these developments are considered in more detail in the Taxing Issues column of Taxation in Australia, the Institute's member journal.

Residence: individuals

The initial report of a self-initiated review of the Board of Taxation on the income tax residency rules for individuals has been released.

SMSFs: red-tape reduction

A consultation paper has been released on the proposal to change the annual audit cycle for some SMSFs to a three-yearly cycle.

Draft legislation

Draft legislation has been released for the following initiatives:
  • the extension of the definition of a “significant global entity”
  • the removal of an exemption that allows offshore sellers not to count sales of hotel bookings in Australia towards their GST turnover threshold
  • two black economy measures; and
  • tightening the rules on stapled structures and implementing the MIT affordable housing measures.

ABN reform

A consultation paper seeking views on designing a modern ABN system has been released.

“In Australia” condition

The Commissioner has issued a draft ruling on the meaning of the “in Australia” requirement that applies in relation to certain exempt entities and gift deductible recipients.

Final determinations

Final determinations that have been issued by the Commissioner:
  •  consider the meaning of the expression “directly in connection with” in s 177DA ITAA36; and
  •  set out what he considers the reasonable travel and overtime meal allowance expense amounts are for the substantiation exception for the 2018-19 income year.
CGT: trust split

A draft determination which considers the CGT consequences of a trust split has been issued.

FBT: exempt benefits

A practical compliance guideline issued by the Commissioner deals with the car-related FBT exemptions under which a fringe benefit is an exempt benefit where the private use of eligible vehicles by current employees during an FBT year is limited to work-related travel, and other private use that is “minor, infrequent and irregular”.

Division 7A

A final determination has been released on an aspect of the Div 7A interposed entity provisions.  

For the 2018-19 income year, the Div 7A benchmark interest rate (where a regular 30 June accounting period is involved) is 5.20% per annum.

Small business company tax rate change

A draft practical compliance guideline sets out the ATO’s compliance and administrative approaches for corporate tax entities that have faced practical difficulties when determining their corporate tax rate and corporate tax rate for imputation purposes in the 2015-16, 2016-17 and 2017-18 income years.

Overpaid GST: calculation of interest

As a sequel to the High Court’s 2010 decision in the Travelex case, a dispute about the time from which the Commissioner was liable to pay interest on the taxpayer’s overpayments has been decided by the Federal Court.

Legal professional privilege

The Federal Court has decided a number of claims of legal professional privilege in respect of documents obtained by the Commissioner from the applicant’s premises in the exercise of his statutory access powers.

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