Birchstone Brief for the week ended 24 February 2023

ATO Updates

Fact sheet on the FBT exemption for electric vehicles

The ATO has released a fact sheet for employers outlining the operation of the FBT exemption for electric vehicles which was recently passed into law. It addresses:

• what is required for a car benefit to qualify for the exemption; and
• how associated benefits that an employer may also provide should be treated. 

ATO acknowledges settlement of Ampol Ltd procurement hub dispute

The ATO has acknowledged its settlement with Ampol Ltd regarding the dispute over the company’s use of a Singapore-based procurement hub. As part of the settlement:

• Ampol will pay $157 million to the Commonwealth in respect of past income years back to 2014; and 
• tax outcomes arising from Ampol’s future use of the procurement hub have been locked in until the 2033 income year. 

Addendum to TR 2021/2 

The ATO has released TR 2021/2A1, which updates TR 2021/2 (which sets out the Commissioner’s view regarding when the provision of car parking is a car parking benefit for the purposes of the FBTAA) by incorporating changes addressing the concept of ‘primary place of employment’ following the decision in FCT v Virgin Australia Regional Airlines Pty Ltd [2021] FCAFC 209. The addendum also implements some stylistic changes. 

Draft Determinations regarding alternative FBT records

The ATO has released the following draft FBT determinations, which deal with the records the Commissioner will accept as an adequate alternative to an employee declaration in respect of certain expense payment fringe benefits:

• LI 2023/D3; 
• LI 2023/D4; 
• LI 2023/D5; and
• LI 2022/D6. 

Class ruling released

The ATO has released CR 2023/9 – Pendal Group Ltd – Dividend and scheme of arrangement. 

State Taxes

NSW: Surcharge purchaser duty and surcharge land tax inconsistent with international tax treaties

RevenueNSW has determined that NSW’s foreign surcharge provisions are inconsistent with international tax treaties entered into by the Commonwealth with New Zealand, Finland, Germany and South Africa. 

As a result:

• effective immediately, individuals who are citizens of the above nations will no longer be required to pay surcharge purchaser duty or surcharge land tax; 
• surcharge liabilities for non-individuals (i.e. companies, trusts and partnerships) that arise because of their affiliation with one of the relevant nations may also be affected; and 
• refunds for surcharge amounts paid on or after 1 July 2021 may be made available for transferees and landowners that are relevantly connected with one of the above nations. 

Following this, it is possible that:

• other Australian States and Territories may make similar determinations; and 
• it could be determined that surcharge duties and land taxes are also inconsistent with Australia’s tax treaties with additional countries. 

Cases

VTBL v FCT [2023] AATA 168 – Taxpayer mostly successful in challenging default assessments

In this very fact-dependent case, the taxpayer (an experienced property developer and real estate agent) was largely successful before the AAT in proving that:

• default assessments made by the Commissioner in relation to the 2009, 2010, 2011 income years and a special assessment in relation to the 2016 income year were excessive (on the basis that she held relevant properties, and received relevant amounts, in her capacity as a trustee); and 
• a 20% shortfall penalty uplift for the 2010 and 2011 income years should not have been imposed as, at the time the default assessments were issued and penalty payments imposed, the taxpayer had not ‘previously’ had a penalty applied in respect of the 2009 income year (given that the default assessments for the relevant income years were all issued contemporaneously). 

• his tendency to merely point to section 14ZZK of the TAA 1953 and the taxpayer’s burden of proof in objection review cases; and 
• attempting to take the taxpayer by surprise by making a positive assertion at hearing which was not apparent from his objection decision or statement of facts, issues and contentions. 

Legislation

Consultation paper regarding legislating the objective of superannuation released

Treasury has released a consultation paper regarding the Albanese government’s proposal to legislate the objective of superannuation. The paper sets out the government’s rationale for enshrining the objective of superannuation in law and provides some options regarding potential framing. It also contains the government’s proposed legislative definition of the objective as being “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”. 

The government is seeking stakeholder feedback on the framing of the draft objective, including its benefits and practical application. Specific consultation questions are outlined at the end of the paper.