Birchstone Brief for the week ended 28 July 2023

ATO Updates

Class rulings issued

The ATO has issued:

• CR 2023/40 – Pemby Pty Ltd – Use of an electric bicycle by an employee; 
• CR 2023/41 – Norwest Energy NL – Scrip for scrip roll-over; and 
• CR 2023/42 – NatPark FBT Register report – Use for calculating car parking benefits. 

Cases

Equality Australia Ltd v Commissioner of Australian Charities and Not-for-profits Commission [2023] AATA 2161 – LGBTQI+ advocacy group not entitled to PBI registration due to lack of direct benevolence

Three members of the AAT have unanimously held that people who identify as LGBTQI+ are capable of being regarded as persons in need of benevolence. However, two of those members found that the applicant (an organisation which had since 2017 focused on advocacy and lobbying to change laws and social practices which were injurious to LGBTQI+ persons) did not provide direct benevolent relief to LGBTQI+ persons and was therefore not entitled to registration as a public benevolent institution (PBI). The third member of the tribunal disagreed, holding that the applicant had engaged in activities and projects beyond seeking to change laws which could be appropriately described as providing benevolent relief. 

Zhang v Chief Commissioner of State Revenue [2023] NSWCATAD 181 – Taxpayer’s delay leads to double duty

The NSW Civil and Administrative Tribunal has upheld a decision of the Chief Commissioner of State Revenue not to refund duty paid on a contract to purchase a proposed strata lot which was later rescinded ab initio (with a new purchase contract being entered into by a trust). This was because:

• the assessment was correct at the time it was made; and
• the taxpayer failed to apply for a refund within 5 years of the initial assessment or 12 months after the contract was cancelled (as required by section 50(2) of the Duties Act 1997 (NSW)). 

Appeals: Bechtel Australia 

The taxpayer has appealed to the Full Federal Court against the first instance decision in Bechtel Australia Pty Ltd v FCT [2023] FCA 676 (covered in the Birchstone Brief for the week ended 23 June 2023), in which the Federal Court held that the otherwise deductible rule did not apply to costs an employer incurred in paying for their FIFO employees’ travel costs as the employees were not rostered on for duty until arrival at the relevant work site.

Legislation

Draft legislation to clarify input tax credit rules

Treasury has released exposure draft legislation and explanatory materials regarding miscellaneous amendments to Treasury portfolio laws which seek to ensure the law operates as intended by correcting technical or drafting defects, removing anomalies and addressing unintended outcomes. One of the matters intended to be addressed by the draft legislation is ensuring that input tax credits are attributed to the appropriate GST tax periods. 

Statute Law Amendment (NTCAT Conferral of Jurisdiction) Bill 2023 (NT) introduced

A Bill has been introduced into the Northern Territory Legislative Assembly which, if enacted into law, will amend various Acts to provide for:

• the dissolution of the Taxation and Royalty Appeals Tribunal; and 
• the transfer of jurisdiction to hear tax review applications to the Northern Territory Civil and Administrative Tribunal (NTCAT).