Released 13.7.10

Decision Impact Statements
2008/4523: Electrical Goods Importer v Commissioner of Taxation
NSD 1480/2009: Vidler v Commissioner of Taxation

Released 14.7.10

Class Ruling
CR 2010/27: Income tax: employment termination payment: Monadelphous Engineering Associates Pty Ltd
Notices of Withdrawal
Taxation Determinations
TD 2009/D15: Income tax: will a deduction remain allowable under subsection 394-10(1) of the Income Tax Assessment Act 1997 where a CGT event happens in relation to a participant's forestry interest in a forestry managed investment scheme within 4 years after the end of the income year in which the participant first pays an amount under the scheme (subsection 394-10(5) of that Act)?
TD 2009/D16: Income tax: will a deduction remain allowable under section 8-1 of the Income Tax Assessment Act 1997 where a CGT event happens in relation to a taxpayer's interest in a section 82KZMG of the Income Tax Assessment Act 1936 forestry managed investment scheme within 4 years after the end of the income year in which the taxpayer first incurred expenditure under the agreement?
Errata
Goods and Services Tax Rulings
GSTR 1999/1: Goods and services tax: the GST rulings system
Wine Equalisation Tax Ruling
WETR 2002/1: Wine equalisation tax: the WET rulings system

Released 16.7.10

Interpretative Decisions
ATO ID 2010/137: Energy Grants (Credits) Scheme: off-road credit - is vermiculite a mineral?
ATO ID 2010/138: Energy Grants (Credits) Scheme: on-road - incidental use - manufacture and unloading
Withdrawn Interpretative Decisions
ATO ID 2001/262: Assessable income: foreign pension for government service
ATO ID 2001/320: Withholding Tax Exemption - Foreign Superannuation Fund
ATO ID 2001/334: Income Tax Exemption - Foreign Superannuation Fund
ATO ID 2006/51: Energy Grants (Credits) Scheme: on-road - incidental use - manufacture and unloading
Decision Impact Statement
NSD 1079 of 2009: Darrelen Pty Ltd, Trustee of the Henfam Superannuation Fund v The Commissioner of Taxation

CFC reforms - consultation paper

Released 16.7.10

The Government has released a consultation paper on the reform of the controlled foreign company (CFC) regime, as part of the broader reform of Australia’s foreign source income anti-tax-deferral rules that were announced in the 2009-10 Federal Budget. Legislation has already been enacted to repeal the foreign investment fund (FIF) and deemed present entitlement rules in the 1936 Act. The CFC consultation paper is said to take account of submissions received in response to the earlier consultation paper the Government released in January of this year. On the basis of this latest consultation paper, and the high-level draft rules contained therein, key features of the proposed new regime will be as follows:

· The concept of “control” will take its meaning from AASB 127 (Consolidated and Separate Financial Statements) – broadly, this means the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

· A taxpayer would only be an attributable taxpayer with respect to a CFC if they either control the company or are an associate of the controller.

· A taxpayer’s “total participation interest” in a CFC will, broadly, be equal to the percentage they hold of the total rights to returns on equity interests in the CFC that are “distributions of profits”.

· The debt/equity rules (Division 974) and TOFA rules (Division 230) will no longer be disregarded in calculating the attributable income of a CFC.

· There will be an “active business income exemption” to exclude otherwise passive income that arises in the ordinary course of the “active conduct” of a trade or business from attributable income.

· The current concessions for CFCs of Australian financial institutions will be retained in some form to exclude certain amounts from passive income (these concessions will supplement the active business income exemption).

· As under the former FIF rules, complying superannuation funds will not be subject to CFC attribution.

Progress of legislation

Tax Laws Amendment (Foreign Source Income Deferral) Bill (No.1) 2010 received Royal Assent on 14 July 2010. It repeals the FIF and deemed present entitlement rules in the 1936 Act.

As At 16.7.10

Bill	Explanatory Memorandum	Intro House	Passed House	Intro Senate	Passed Senate	Date of Royal assent / Act Number	Description
Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009	EM	19.11.09					Disclosure and Secrecy Provisions
Tax Laws Amendment (2010 GST Administration Measures No. 1) Bill 2010	EM	10.2.10	10.3.10	10.3.10	11.3.10 .	24.3.10/21	GST
Tax Laws Amendment (2010 Measures No. 2) Bill 2010	EM	17.2.10	13.5.10	13.5.10	17.6.10	28.6.10/75	Division 7A, TFN, Carbon Technology exemptions, DGR
Tax Laws Amendment (2010 GST Administration Measures No. 2) Bill 2010	EM	18.2.10	13.5.10	13.5.10	17.6.10 .	28.6.10/74	GST
Tax Laws Amendment (Transfer of Provisions) Bill 2010	EM	17.2.10	13.6.10	15.6.10	17.6.10 .	29.6.10/79	Tax Law Rewrite
Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010	EM	13.5.10	23.6.10	23.6.10	24.6.10 .	14.7.10/114	Repeal of the FIF Provisions
Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) 2010	EM	13.5.10	1.6.10	15.6.10	17.6.10 .	29.6.10/78	Medicare Levy and Medicare Levy Surcharge
Tax Laws Amendment (Research and Development) 2010	EM	13.5.10	17.6.10	21.6.10	.		Refundable R&D Tax Offsets
Tax Laws Amendment (2010 Measures No. 3) Bill 2010	EM	26.5.10	23.6.10	23.6.10	24.6.10 .	29.6.10/90	Managed Investment Trust, Thin Cap, Super Co-contribution
Tax Laws Amendment (2010 GST Administration Measures No. 3) Bill 2010	EM	26.5.10	21.6.10	22.6.10	23.6.10 .	29.6.10/78	GST
Superannuation Industry (Supervision) Amendment Bill 2010	EM	26.5.10	23.6.10	24.6.10	24.6.10 .
Tax Laws Amendment (2010 Measures No. 4) Bill 2010	EM	25.5.10			.		CGT, TOFA, Debt Equity, Foreign Currency Gains and Losses, GST, Managed Investment Trusts and DGR
International Tax Agreements Amendment Bill (No. 2) 2010	EM	25.6.10			.		Protocol to the Singapore Treaty
Superannuation Legislation Amendment Bill 2010	EM	24.6.10			.		Superannuation

These notes are in summary form designed to alert clients to tax developments of general interest. They are not comprehensive , they are not offered as advice and should not be used to formulate business or other fiscal decisions.

Liability limited by a scheme approved under Professional Standards Legislation.