Birchstone Brief for the week ended 22 April 2022

ATO Updates

Section 100A Guidance

The ATO has provided clarification before the Senate Economics Legislation Committee on 6 April that TR 2022/D1 and PCG 2022/D1 (covered in the Birchstone Brief for the week ended 25 February 2022) are not intended to apply on a retrospective basis.

The ATO also clarified its statement in TA 2022/1 (also covered in the Birchstone Brief for the week ended 25 February 2022) that the promoter penalties in Subdivision 290-B of Schedule 1 to the Taxation Administration Act 1953 (Cth) could potentially apply to apply to tax advisers promoting certain family trust arrangements, explaining that the penalties target individuals actively promoting such arrangements in return for commissions or success fees rather than agents simply receiving fees for providing ordinary advisory services.

Rulings

The ATO has issued CR 2022/39 – EFM Corporate Pty Ltd – Health and fitness equipment services.

Other News

Carter

In relation to the High Court’s decision in Commissioner of Taxation v Carter [2022] HCA 10 (discussed in the Birchstone Brief for the week ended), the Morrison Government has:

  • announced that it will carefully consider the implications of the decision and whether it raises any unintended inequitable outcomes under Division 6 of the Income Tax Assessment Act 1936 (Cth); and
  • pledged it will not hesitate to make ‘common-sense’ legislative amendments to provide certainty for family trusts and prevent unfair applications of the tax law if it is re-elected.

Cases

Appeals

An Australian subsidiary of Singtel has appealed to the Full Federal Court against Moshinsky J’s decision to deny interest deductions of $894 million pursuant to the transfer pricing rules in Singapore Telecom Australia Investments Pty Ltd v Commissioner of Taxation [2021] FCA 1597 (covered in the Birchstone Brief for the week ended 14 January 2021).

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