Greenwoods and Freehills Weekly Tax Highlights - Week Ended 3.7.09

ATO Documents
Released 1.7.09
Final Taxation Determinations
TD 2009/14: Income tax: is a taxpayer entitled to an income tax deduction under subsection 70B(2) of the Income Tax Assessment Act 1936 where a Stapled Security of the kind described in Taxpayer Alert TA 2008/1 is sold at a loss or upon the occurrence of an Assignment Event?
TD 2009/16: Income tax: what is the benchmark interest rate applicable for the year of income that commenced on 1 July 2009 for the purposes of Division 7A of Part III of the Income Tax Assessment Act 1936 and how is it used?

Draft Taxation Determination
TD 2009/D2: Income tax: when is a non-share equity interest 'issued at or through a permanent establishment' for the purposes of paragraph 215-10(1)(c) of the Income Tax Assessment Act 1997?

Notices
Withdrawn Taxation Determination
TD 93/82(W): Income tax: is roll-over relief available under section 160ZZK of the Income Tax Assessment Act 1936 where a taxpayer is forced to dispose of an asset due to an adverse change in the taxpayer's financial circumstances?

Goods and Services Tax Ruling
GSTR 2006/9A2 - Addendum: Goods and services tax: supplies

Withdrawn Superannuation Guarantee Rulings
SGR 94/4(W): Superannuation guarantee: ordinary time earnings
SGR 94/5(W): Superannuation guarantee: salary or wages

Withdrawn Goods and Services Tax Advice
GSTA TPP 096(W): Goods and services tax: Is there an increasing adjustment under Division 138 of the GST Act if an entity carrying on a farming business undertakes improvements to its farm land and subsequently cancels its GST registration?

Released 3.7.09
Final Interpretative Decisions
ATO ID 2009/48: Franking Accounts: exercise of paragraph 109RB(2)(a) of the Income Tax Assessment Act 1936 discretion
ATO ID 2009/49: Small Business Concessions: small business entity test - annual turnover - business carried on part year only
ATO ID 2009/50: Assessability of foreign branch income derived from New Zealand
ATO ID 2009/51: Borrowing expenses passed on to a subsidiary

Withdrawn Interpretative Decisions
ATO ID 2001/24(W): Superannuation: Eligible Termination Payments (Non-Resident, Non-Complying Fund)
ATO ID 2001/341(W): Separate Net Income - eligible termination payment
ATO ID 2001/5(W): Income tax: Exempt Foreign Income
ATO ID 2002/477(W): Superannuation, retirement & employment termination: Eligible termination payment (ETP) and Foreign superannuation payment

Taxation of employee share schemes
On 1 July 2009 the Assistant Treasurer released a Policy Statement setting out the final taxation treatment of shares and rights acquired under employee share schemes, effective from that day. The Policy Statement adopts the proposed changes in the Government’s prior consultation paper on the new regime, although several modifications have been made to address concerns raised during the industry consultation process.

Non-commercial losses: draft legislation
Treasury has released exposure draft legislation to implement the changes announced in the 2009-10 Federal Budget to tighten the non-commercial loss rules for individuals with an adjusted taxable income in excess of $250,000. The closing date for submissions is 26 July 2009.

Draft Tax Agent transitional bill: consultation
Treasury has released a summary of the Government's consultation on the Exposure Draft Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 (which was introduced into Parliament on 24 June 2009).

Commissioner’s speech on large business issues
On 30 June 2009 the Commissioner delivered a speech, “Did you know? Not a penny more”, at a tax industry function, touching on a range of large business tax issues.  Cross-border financial arbitrage (e.g. the use of hybrid financial instruments) and profit shifting were included in a list of areas of particular compliance concern to the ATO.

New Australia/New Zealand tax treaty signed
On 29 June 2009 Treasury announced that a new tax treaty had been signed by the Governments of Australia and New Zealand in Paris on 26 June 2009. The new treaty replaces the existing 1995 treaty and its 2005 amending protocol. The changes under the new treaty include an interest withholding tax exemption for certain financial institutions, and rules to allow Australian managed investment trusts to access treaty benefits in relation to income derived from New Zealand sources.

UK tax code of practice for banks: consultation
The UK Government has released a consultation document in relation to a tax code of practice for banks. The code sets out the Government’s expectations of banks in the management of their tax affairs, and also outlines specific examples of what HMRC considers to be tax avoidance schemes it has encountered in the banking industry, including so-called dividend- and coupon-stripping schemes. The consultation document is available on the HMRC Website.

Tax Cases
Suntory (Aust) Pty Ltd v Commissioner of Taxation [2009] FCAFC 80 (30 June 2009). The Full Federal Court has dismissed the taxpayer’s appeal and found that the Commissioner was entitled to collect the so-called “alcopops tax” during the relevant period under the Excise Tariff Act 1901, despite the fact that the enabling legislation had not been passed and in fact had been rejected by the Senate.

Appeals update
Bamford v Commissioner of Taxation [2009] FCAFC 66 (3 June 2009). Applications for special leave to appeal to the High Court from the decision of the Full Federal Court have been lodged by both the taxpayers and the ATO.

Legislative Update
The Tax Laws Amendment  (Budget Measures No 1) Bill 2009  received Royal Assent on 29 June 2009.

Progress of Legislation
As at 2.7.09