Birchstone Brief for the week ended 25 March 2022

News and Events

age of entitlement

The ATO has published their long-awaited guidance on section 100A (reimbursement agreements) and it has caused shockwaves throughout the tax community.

Join Daniel Taborsky, Director of Birchstone Tax Law, as he analyses section 100A from a tax lawyer’s perspective. Daniel will be joined by Chris Ryan, National Director, Tax Avoidance Taskforce – Trusts at the ATO, to discuss the ATO’s new guidance on section 100A and to answer your questions.

Tuesday, 5 April 2022
11:00AM – 12:30PM (AWST)

Click here to register.

ATO Updates

Decision Impact Statement: M3K

The ATO has issued a Decision Impact Statement on the decision in M3K Services Pty Ltd v Commissioner of Taxation [2021] AATA 4416 (covered in the Birchstone Brief for the week ended 3 December 2021).

In its Decision Impact Statement, the ATO states the AAT’s decision:

  • demonstrates that taxpayers bear the onus of showing sufficient circumstances to conclude they did not pass on excess GST;
  • addressed all four elements in GSTR 2015/1 that the Commissioner regards as relevant in determining whether excess GST has been passed on; and
  • was consistent with the Commissioner’s approach to s 142-15 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) – namely that the provision is a confined power and should only apply to s 142-10 in exceptional circumstances according to its terms.

PCG 2016/5 amended

PCG 2016/5 has been amended to confirm that the ATO will not apply compliance resources to determine whether limited recourse borrowing arrangements:

  • that were created prior to the 2014-15 income year; and
  • rectified to fall within the safe harbour guidelines contained in PCG 2016/5 so as to be consistent with an arm’s length dealing by 31 January 2017,

are potentially caught by the non-arm’s length income expense provisions in s 295-550 of the Income Tax Assessment Act 1997 (Cth).

Rulings

The ATO has issued the following rulings:

  • CR 2022/23 – Smartgroup Corporation Ltd – Use of a travel smartcard for bus travel by employees;
  • CR 2022/24 – Aventus Group – Exchange of shares in Aventus Holdings Ltd for shares in Home Consortium Ltd – Scrip for scrip rollover;
  • CR 2022/25 – Aventus Group – Exchange of units in Aventus Retail Property Fund for units in Homeco Daily Needs Real Estate Investment Trust – Scrip for scrip rollover;
  • CR 2022/26 – Victorian Department of Families, Fairness and Housing – Early retirement scheme 2022-2023;
  • CR 2022/27 – University of Southern Queensland – Early retirement scheme 2022;
  • CR 2022/28 – Perth Airport Pty Ltd – Provision of parking to an individual under an arrangement with their employer; and
  • PR 2022/2 – Tax consequences of investing in C2 Gateway Deferred Purchase Agreement.

Legislation

Industry Research and Development Regulations 2022R&D Regulations Updated

The Government has issued new Regulations that underpin the administration of the R&D tax incentive in preparation for the expiration of the Industry Research and Development Regulations 2011 (Cth) on 1 April 2022. The new Regulations commence on 22 March 2022 and are substantively the same as the old Regulations, with minor technical changes having been made to reflect current practices and provide clarity.

Exposure draft materials: Digital games tax offset

The Government has released exposure draft materials to introduce a 30% refundable digital games tax offset for eligible companies that spend a minimum of $500,000 on qualifying Australian development expenditure related to developing new games or expanding existing eligible games, capped at $20 million per income year.

ETP payment summary deferral

A Deputy Commissioner of Taxation has created a legislative instrument continuing the deferral of the due date for payers to provide the Commissioner with copies of payment summaries in respect of:

  • employment termination payments; and
  • departing Australia superannuation payments,

to 14 August following the financial year in which the payment was made.

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