Birchstone Brief for the week ended 11 February 2022

ATO Updates

Taxation Determination: Commercial debt forgiveness

The ATO has issued TD 2022/1, which sets out the Commissioners view that the exclusion for debts forgiven for reasons of natural love and affection from the commercial debt forgiveness rules requires the creditor to be a natural person.

Class Rulings

The ATO has issued the following class rulings:

  • CR 2022/5 – AIA Australia Ltd – Provision of free membership, allocation of profits, and free or discounted goods and services to members of a health and wellness program;
  • CR 2022/6 – Bingo Industries Ltd – Scheme of arrangement and special dividend;
  • CR 2022/7 – RAM Australia Retail Property Fund – Return of capital and formation of a stapled security;
  • CR 2022/8 – RAM Australia Medical Property Fund – Return of capital and formation of a stapled security;
  • CR 2022/9 – Afterpay Ltd – Scrip for scrip roll-over; and
  • CR 2022/10 – Chalice Mining Ltd – Demerger of Falcon Metals Ltd.

State Taxes

Payroll tax (Qld): Determining whether a worker is an employee

The Queensland Revenue Office has released Public Ruling PTA038.2, which sets out its views on when a worker will be an employee for the purposes of the Payroll Tax Act 1971 (Qld).

Other News

Decision Impact Statement: Cancer & Bowel Research Australia Ltd

The ACNC has issued a Decision Impact Statement on the decision in Cancer & Bowel Research Australia Ltd v Commissioner of the ACNC [2021] AATA 3875.

In that case, the AAT upheld the Commissioner’s decision that three applicants, which all raised funds for different types of cancer, were not eligible for registration as a charity because they had another purpose of providing benefits to other people. The AAT also found that the applicants were ineligible, but on the different ground being that the entities had been founded to take over the fundraising activities of another charity with liabilities owing to the ATO. This purpose of avoiding a tax liability, the AAT found, may well be a ‘disqualifying purpose’ under the Act as an activity contrary to public policy.

In its Decision Impact Statement, the ACNC states the decision supports its approach to determining an organisation’s purpose.

Cases

Appeals

The Commissioner has appealed from the decision of the Federal Court in Guardian AIT Pty Ltd ATF Australian Investment Trust v Commissioner of Taxation [2021] FCA 1619.

Legislation

New Bill introduced: Patent box regime

A new Bill has been introduced into Parliament to introduce the patent box regime announced in the 2021-22 Budget. The patent box regime provides concessional tax treatment for income derived by a corporate taxpayer in exploiting a biotechnology or medical patent.

New Bill Introduced: Intangible depreciating assets

A new Bill has been introduced into Parliament to allow taxpayers to self-assess the effective life of some intangible depreciating assets.

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