What happened in tax in October

Written by TaxCounsel Pty Ltd

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

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

Foreign investor amendments

An amending Bill that was introduced into parliament on 21 September 2018 contains amendments that are intended to comprehensively tackle the various tax settings that are combined with stapled structures to deliver low tax rates to foreign investors.

Multinational amendments

The Treasury Laws Amendment (Making Sure Multinationals Pay their Fair Share of Tax in Australia and Other Measures) Bill 2018) contains amendments that will (inter alia) amend (from 1 July 2018) the R&D tax incentive to better target the incentive and encourage firms to increase the proportion of their business devoted to genuine, additional R&D expenditure and extend the definition of a “significant global entity”.

Further black economy measures Bill

An amending Bill (which was introduced into parliament on 20 September 2018) contains further amendments directed at the black economy.

Fodder storage assets write-off

An amending Act which became law on September 2018 makes amendments that will allow primary producers to immediately deduct the cost of fodder storage assets, such as silos and hay sheds, used to store grain and other animal feed.

CGT small business concessions

Amendments to the CGT small business concessions to give effect to a 2017-18 Budget announcement relating to capital gains from shares or trust interests are now law but with a revised commencement date.

GST: supplies of goods connected with Australia

The Commissioner has issued a final ruling which considers the circumstances in which a supply of goods will be connected with the indirect tax zone and thus potentially liable to GST (GSTR 2018/2).

Diverted profits tax

The Commissioner has released a final law companion ruling and a final practical compliance guideline in relation to the operation of the diverted profits tax for significant global entities (LCR 2018/6; PCG 2018/5).

Planned consultation

In addition to potential advice and guidance currently open for consultation, the ATO has advised the topics on which it plans to seek comment.

Fraud or evasion

The Federal Court (Kenny J) has dismissed an appeal by a taxpayer from a decision of the AAT in which the tribunal had upheld amended assessments of the taxpayer, some of which, to be valid (because they would otherwise have been time-barred), required that the Commissioner rely on item 5 of the table in s 170(1) ITAA36, which meant that he had to be of the opinion that there had been fraud or evasion (Nguyen v FCT [2018] FCA 1420).

CGT: relationship breakdown

The High Court has refused special leave to appeal from the decision of the Full Federal Court in the Ellison v Sandini Pty Ltd litigation, which raised a number of CGT issues, including in relation to the operation of CGT relationship roll-over relief.

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