Greenwoods & Freehills Weekly Tax Highlights - Week Ended 25.9.09

ATO Documents

Released 23.9.09

Final Product Ruling
PR 2009/50: Income tax: Rewards Group Premium Timber Project 2009 - Late Growers
Final Class Ruling
CR 2009/54: Income tax: proposed return of capital: Eircom Holdings Limited
Notices of Withdrawal
TD 2008/D15: Income tax: (a) are credits for United Kingdom interest withholding tax paid allowable under Article 22.1(a) of the 2003 United Kingdom Convention to an Australian resident financial institution which enters into an arrangement of the kind described in Taxpayer Alert TA 2007/3; and (b) would the Commissioner consider the application of Part IVA of the Income Tax Assessment Act 1936 to the arrangement?
IT 2181: Income tax: depreciation: investment allowance - lift well
PR 2008/63: Income tax: 2009 Timbercorp Forestry Project
PR 2008/65: Income tax: Great Southern 2009 High Value Timber Project
PR 2008/72: Income tax: Great Southern 2009 High Value Timber Project (ABL Nominees Pty Ltd Finance)
PR 2009/18: Income tax: Great Southern 2009 High Value Timber Project - Preferred Financier
PR 2009/20: Income tax: Great Southern 2009 Renewable Fibre Project
PR 2009/22: Income tax: Australian Bight Abalone Project 2009
Addendum
TD 92/156: Income tax: do the trading stock provisions apply to newsprint held by a taxpayer carrying on a business of producing newspapers?

Released 25.9.09

Interpretative Decisions
ATO ID 2009/106: Assessability of foreign branch income derived from New Zealand
ATO ID 2009/107: R&D tax concession: is a company 'not at risk' if it can expect to recover its R&D expenditure because of the good technical prospects of its activities (rather than merely because of the terms of the relevant arrangement)?
Withdrawn Interpretative Decisions
ATO ID 2009/50: Assessability of foreign branch income derived from New Zealand

Appeals Update

M W McIntosh  Pty Limited v Commissioner of Taxation [2009] FCAFC 88 (28 July 2009): The taxpayer has sought special leave to appeal to the High Court. The Full Federal Court had unanimously held that the Commissioner of Taxation did not have the power to extend the time in which a taxpayer can lodge a choice to form a consolidated group.  

Tax Cases

Commissioner of Taxation v Aid/Watch Incorporated [2009] FCAFC 128 (23 September 2009): The Full Federal Court has allowed the Commissioner's appeal and held that the taxpayer's primary purpose was of a political nature and the taxpayer was not therefore entitled to the status of a charitable organisation. The Court reasoned that since the taxpayer's main purpose was to influence Government as to where to direct aid, the organisation should be classified as political, which in the Court's view would be fatal to its charitable status. In reaching this conclusion the Court set aside the decision of the AAT which had found the taxpayer to be a charitable institution.  

Commissioner of Taxation v Burness (As Trustee for the Property of Bottazzi, A Bankrupt) [2009] FCA 1021 (14 September 2009): The Federal Court has dismissed the Commissioner's appeal against the reduction of the taxpayer's shortfall penalties. Gordon J found that the AAT was within its rights to exercise its discretion and reduce the penalties. This was despite the fact that the AAT had determined that a capital gain had been deliberately omitted from a return.

Roy Morgan Research Pty Ltd and Commissioner of Taxation [2009] AATA 702 (11 September 2009): The AAT has upheld superannuation guarantee default assessments after finding that its market research interviewers were employees for tax purposes. The taxpayer had claimed that the interviewers, who were conducting computer assisted telephone interviews, were independent contactors. After a detailed examination of the working processes of the interviewers the AAT reached the conclusion that they were employees of the taxpayer and that the method of delivering the interview did not have an impact on their status as employees. 

Legislative Update

Tax Laws Amendment (2009 Measures No. 4) Bill 2009 has received Royal Assent. The Bill received Royal Assent on 18.9.09, becoming Act number 88 of 2009.

Progress of Legislation

As at 25.9.09