Greenwoods and Freehills Weekly Tax Highlights - Week Ended 15.5.09
Federal Budget 2009-2010
The Federal Government has released the 2009-2010 Federal Budget. The Budget contained a significant number of tax measures. Greenwoods & Freehills has prepared a detailed analysis of the Budget which can be accessed by clicking here.While there was no comprehensive site which listed all of the budget releases, various important tax related budget materials that were released on the night can be accessed by clicking on the provided links:
• Primary Budget Papers and Statements;
• Treasurer's Budget Press Releases;
• Assistant Treasurer's Budget Press Releases;
• Minister for Superannuation's Budget Press Releases;
• Board of Taxation Review of Foreign Source Income Attribution Rules;
• Treasury Discussion Paper on Foreign Source Income Attribution Rules;
• Board of Taxation Review of the Taxation Treatment of Off-market Share Buybacks;
• Treasury Discussion Paper on the Legal Framework for GST administration;
• Treasury Discussion Paper on GST financial supply provisions;
• Treasury Discussion Paper on the GST margin scheme; and
• Treasury Discussion Paper on the compliance costs for businesses involved in cross border transport supplies
ATO Documents
Released 13.5.09
Class Rulings
CR 2009/23: Income tax: scrip for scrip: exchange of HeartWare Limited shares, options or performance rights for equivalent HeartWare International Inc securities
CR 2009/24: Income tax: HeartWare Group Restructure - Employee Share Scheme - treatment of options and performance rights
CR 2009/25: Income tax: share capital reduction: Artist & Entertainment Group Limited
CR 2009/26: Income tax: scrip for scrip roll-over: exchange of Interests in the Premium Equity Fund for units in the Common Fund No. 3
Product Rulings
PR 2009/31: Income tax: Film Investment - 'Extreme'
PR 2009/32: Income tax: deductibility of interest incurred on borrowings in relation to Macquarie Fusion Funds - June 2009 Offer
PR 2009/33: Income tax: Gunns Plantations Walnut Project No. 3 - Early Growers
Superannuation Guarantee Rulings
SGR 2009/2: Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages'
Released 15.05.09
Interpretative Decisions
ATO ID 2009/30: Capital Allowances: water facility - the repair or the asset?
ATO ID 2009/31: Capital Allowances: water facility - intention or objective result?
ATO ID 2009/32: Capital Allowances: water facility - reasonably incidental to conserving or conveying water
ATO ID 2009/33: CGT Small Business Concessions: maximum net asset value test - assets used solely for personal use and enjoyment - personal bank account
ATO ID 2009/34: CGT Small Business Concessions: maximum net asset value test - assets used solely for personal use and enjoyment - vacant land
Withdrawn Interpretative Decisions
ATO ID 2002/340: Deductibility of car expenses incurred in maintaining rental properties using the cents per kilometre method
ATO ID 2002/580: Assessability of salary and wages received while serving with the United Nations Peacekeeping Force.
Extra-statutory concession power for the Tax Commissioner
Released 12.5.09
Treasury has released a discussion paper on whether the Commissioner of Taxation should have an extra-statutory concession power. Such a power would, in theory, allow the Commissioner to modify tax laws to give relief to taxpayers in appropriate circumstances. This follows on from the Tax Design Review Panel's report on how to reduce delays in introducing tax legislation and improve the quality of tax law changes. The Government is now asking for submissions on whether there should be an extra-statutory concession power, what form the power should take and what limits there should be on its exercise.
Budget in Reply
Released 14.5.09
The Federal Opposition Leader has delivered his Budget 2009 - Address in Reply. The Opposition Leader will oppose the Government's proposals to reduce the private health insurance rebate. The Opposition has also announced that it would support a tax loss carryback for businesses.
Superannuation Preservation Age
Announced 14.5.09
The Minister for Superannuation and Corporate Law has indicated that the Government will not make a decision until at least the end of 2009 in relation to the Henry tax review recommendation to gradually align the superannuation preservation age with the proposed increase in the Age Pension age. The Government has announced that it will increase the qualifying age for the Age Pension for men and women to 67 years of age from 2023.
Tax Cases
De Simone v FCT [2009] FCA 446, 9 May 2009: The Federal Court has confirmed a previous decision of the Administrative Appeals Tribunal (AAT) that two taxpayers were not entitled to a tax deduction for monies borrowed as part of participating in what amounted to a round robin arrangement to invest in a theatrical production. The Court determined that the AAT had initially erred in finding that the taxpayers had not incurred the outgoings but agreed that Part IVA applied to the arrangement. The Court found that the participants had entered into the arrangement primarily for the purposes of obtaining a tax benefit.
Legislative Update
The Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 was passed by the House of Representatives on 13.5.2009 with amendments, and was then passed by the Senate on 14.5.2009 without further amendment. The Bill now awaits Royal Assent. The amendments will implement the Government's decision to expand the allowance (eg with regard to the new 50% rate for small businesses). The amendments will also resolve a number of technical issues in the Bill.
Released 14.5.09
The Tax Laws Amendment (2009 Measures No 3) Bill 2009 and accompanying explanatory memorandum have been introduced into the House of Representatives. Broadly the Bill:
• contains the GDP adjustment for the 2009-10 year;
• amends the laws concerning annual PAYG payments for taxpayers who are voluntarily registered for GST;
• amends the Petroleum Resource Rent Tax (PRRT); and
• updates the Deductible Gift Recipient list.
Released 12.5.09
The Government has released Exposure Draft Tax Laws Amendment (2009 Budget Measures No 1) Bill 2009. The Government proposes to narrow the scope of s 23AG of the ITAA 1936 (exemption of income earned in overseas employment) so that the exemption will only apply to foreign employment income derived in a limited range of circumstances. Foreign earnings derived on or after 1 July 2009 by an Australian resident individual engaged in continuous foreign service for not less than 91 days will only be exempt from income tax if they are directly attributable to any of the following:
• the delivery of Australian official development assistance by the individual's employer;
• the activities of the individual's employer in operating a public fund declared by the Treasurer to be a developing country relief fund;
• a public fund established and maintained by a public benevolent institution solely for providing money for the relief of people in a developing country who are in distress as a result of a disaster, as recognised by the Minister for Foreign Affairs; or
• the individual's deployment outside Australia by an Australian government (or an authority thereof) as a member of a disciplined force.
A New Tax System (Goods and Services Tax) Act 1999 - Recipient Created Tax Invoice - Embedded Agreement Amending Legislative Instrument 2009
Released 14.5.09
A New Tax System (Goods and Services Tax) Act 1999 - Recipient Created Tax Invoice - Embedded Agreement Amending Legislative Instrument 2009 and an accompanying explanatory statement have been released. The instrument will provide taxpayers with an alternative to the current requirement for the recipient to hold a written agreement with the supplier before issuing a Recipient Created Tax Invoice (RCTI). This is designed to give recipients the choice to either embed the supplies to which each agreement relates within an issued tax invoice or to maintain separate written agreements.
Carbon Pollution Reduction Scheme
Released 14.5.09
The Government has released a tranche of Bills which will implement the Government's carbon reduction scheme. The package of ten Bills consists of:
• Carbon Pollution Reduction Scheme Bill 2009;
• Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009;
• Australian Climate Change Regulatory Authority Bill 2009;
• Carbon Pollution Reduction Scheme (Charges - Customs) Bill 2009;
• Carbon Pollution Reduction Scheme (Charges - Excise) Bill 2009;
• Carbon Pollution Reduction Scheme (Charges - General) Bill 2009;
• Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009;
• Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009;
• Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009; and
• Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009.
The measures relating to taxation are set out in the Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 and accompanying explanatory memorandum. The Bill amends various tax laws to clarify the tax treatment of emissions units. For income tax purposes a rolling balance treatment of registered emissions units which is similar to that for trading stock will be implemented. The Bill will also characterise a supply of an eligible emissions unit specifically as a supply of a personal property right and not a supply of, or directly connected with, real property for GST purposes.
Progress of Legislation
As at 15.5.09
|
Bill |
Explanatory Memorandum |
Intro House |
Passed House |
Intro Senate |
Passed Senate |
Date of Royal assent / Act Number |
Description |
|
27.8.08 |
13.10.08 |
14.10.08 |
3.2.09
|
|
Removes Tax Deductibility of Political Donations, GST | ||
|
13.11.08 |
11.2.09 |
12.2.09 |
12.3.09
|
26.3.09/13 |
Introduces a new legislative regime for Tax Agents | ||
|
Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 |
4.12.08 |
11.2.08 |
12.2.09 |
11.3.09
|
26.3.09/15 |
Division 230. Stages 3 and 4 of TOFA, these being hedging and non-hedging rules | |
|
3.12.08 |
25.2.09 |
10.3.09 |
12.3.09
|
26.3.09/14 |
Scrip for Scrip, International Tax collection, Superannuation Offsets | ||
|
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/5 |
Tax Bonus for Working Australians | ||
|
Tax Bonus for Working Australians (Consequential Amendments) (No.2)Bill 2009 |
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/6 |
Tax Bonus for Working Australians | |
|
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/4 |
Various Bonuses for Household Situations |
||
|
12.2.09 |
18.3.09 |
19.3.09 |
19.3.09
|
26.3.09/27 |
PAYG Instalments, Temporary Resident's Superannuation, Income Test. | ||
|
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 |
13.3.09 |
13.5.09 |
14.5.09 |
14.5.09
|
|
Temporary Income Tax Deduction for New Investment in Tangible Depreciating Assets | |
|
19.3.09 |
|
|
|
|
CGT Concessions, Urban Water Tax Offset, Deductible Gift Recipient List, Fuel Tax Credits Regime | ||
|
19.3.09 |
|
|
|
|
Tax Information Exchange Agreement: British Virgin Islands and Isle of Man | ||
|
14.5.09 |
|
|
|
|
GDP Adjustment, GST, PRRP, Deductible Gift Recipient List | ||
|
Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 |
14.5.09 |
|
|
|
|
Carbon Production Reduction Scheme, Income Tax And GST Treatment |