Birchstone Brief for the week ended 18 March 2021

ATO Updates

Class Rulings

The ATO has issued the following class rulings:

  • CR 2022/20 – Tritium Holdings Pty Ltd – Scrip for scrip roll-over;
  • CR 2022/21 – Westpac Banking Corporation – Off-market share buy-back; and
  • CR 2022/21 – Spark Infrastructure Trust – Acquisition, interim distribution and special distribution.

State Taxes

State Taxes

The ACT Government has announced it will remove stamp duty on eligible owner occupier off-the-plan unit-titled apartment and townhouse purchases up to a dutiable value of $600,000 from 1 April 2022.

Cases

Kais Jewellery (Syd) Pty Ltd v FCT [2022] AATA 425 – Input tax credits for scrap gold acquisitions

The AAT has ruled that a taxpayer company was not entitled to claim input tax credits relating to purported creditable acquisitions of scrap gold from two unrelated entities, finding the taxpayer had not discharged its burden of proving it had actually made them.

The taxpayer traded as a jeweller in Sydney from 2014 to 2016. It claimed input tax credits for the September and December 2016 quarters in respect of purported acquisitions of scrap gold totalling $2,344,672 from two unrelated entities. The taxpayer’s director, Mr Kais, also made cash withdrawals totaling over $2 million from the company’s bank account during the 2017 income year – allegedly to pay for the purported acquisitions. The Commissioner disallowed the input tax credits claimed by the taxpayer in relation to the purported acquisitions on the basis that related invoices had been falsified and included Mr Kais’ cash withdrawals in his assessable income.

The AAT ultimately affirmed the Commissioner’s objection decisions, stating that on the available evidence it could not be satisfied that the taxpayer had made the purported acquisitions. Of significance was the fact that the directors of one of the alleged suppliers of scrap gold gave evidence he had provided the taxpayer with false tax invoices and never actually sold scrap gold to them.

Tiani v FCT [2022] AATA 416 – Part-time employee not entitled to JobKeeper as business participant

The AAT has held that a taxpayer was not eligible for JobKeeper payments as a business participant after her part-time employment was terminated as the JobKeeper rules did not permit the lodgement of more than one nomination notice.

The taxpayer was a graphic designer who conducted her own business and was also undertaking part-time work four days a week when the COVID-19 pandemic hit. Her part-time employer required her to complete a nomination form so it could claim JobKeeper payments for her. However, on 7 August 2020 her employment was terminated. The taxpayer then completed another JobKeeper nomination form in her capacity as principal of her own business. The Commissioner rejected this claim on the basis that s 12(4)(b) of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth) (the Rules) did not permit the lodgement of more than one nomination notice.

The AAT ultimately affirmed the objection decision under review, rejecting the taxpayer’s argument that the beneficial purpose of the government’s legislative response to COVID-19 supported a construction that s 12(4)(b) of the Rules should only apply if there was already an active nomination notice in a particular fortnight such that there was a danger of more than one entity receiving JobKeeper payments concerning the same individual.

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