Class rulings issued
The ATO has issued:
- CR 2023/25 – Qantas Airways Ltd – 2022/23 Qantas Short Term Incentive Plan;
- CR 2023/26 – 2023-2025 Qantas Long Term Incentive Plan; and
- CR 2023/27 – OZ Minerals Ltd – Scheme of arrangement and special dividend.
TR 2005/5 updated regarding Australia’s taxing rights over Australian interest income derived by foreign resident financial institutions
TR 2005/5A2 finalises TR 2005/5DC2 (covered in the Birchstone Brief for the week ended 23 September 2022) and amends TR 2005/5 to clarify the Commissioner’s view regarding when Australia has the right to tax US and UK resident financial institutions in respect of Australian sourced interest income under Australia’s DTAs with those countries. The updated ruling will also apply to financial institutions from other countries whose DTAs with Australia include a financial institution interest withholding tax rates exemption or reduction on identical terms to the US and UK agreements.
Draft PCG regarding intangibles arrangements updated
PCG 2023/D2 revises and replaces PCG 2021/D4 (covered in the Birchstone Brief for the week ended 21 May 2021) and sets out the ATO’s proposed compliance approach to intangibles arrangements involving international related parties. It contains:
- an overview of the ATO’s compliance approach for intangibles arrangements;
- a risk assessment framework explaining how the ATO will assess the compliance risks of intangibles arrangements; and
- an outline of the types and level of evidence the ATO will have regard to when examining intangibles arrangements.
The draft guideline is proposed to apply both before and after its date of issue when finalised.
Website guidance on small business lodgment penalty amnesty
Following its announcement in the 2023-24 Federal Budget (covered in the Birchstone Brief for the week ended 12 May 2023), the ATO has published website guidance regarding the small business lodgment penalty amnesty.
Decision Impact Statement – Buddhist Society case
The ATO has released a Decision Impact Statement (DIS) on the Federal Court’s decision in The Buddhist Society of Western Australia Inc v Commissioner of Taxation (No 2)  FCA 1363.
In the DIS, the ATO accepts the Court’s decision that the Commissioner misunderstood the ordinary meaning of the word ‘school’ in making its decision to revoke the taxpayer’s DGR endorsement. Consistently with that decision, the Commissioner:
- accepts that the views currently expressed in TR 2013/2 do not reflect the ordinary meaning of the word ‘school’;
- agrees that the ordinary meaning of school does not require a course of education to be vocational as opposed to recreational; and
- will, in determining whether a building is ‘used, or to be used as a school’, give consideration to the overall purpose (or purposes) for which the building was ‘established and maintained’ and the activities which support its purpose.
The ATO will:
- review and update TR 2013/2 and relevant website guidance to reflect the Court’s decision; and
- consider the application of the Court’s decision to future DGR applications and relevant applications that have been refused.