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Spry Roughley Articles

Consultation paper: combating phoenix activities

The Federal Government has released a consultation paper on company and tax law reforms to combat phoenix activities. Phoenixing occurs when individuals or entities strip assets from an indebted company and transfer them to another company to avoid paying the first company's liabilities. Read more…

New passive income test for lower corporate tax rate

The recently introduced Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017 ensures that a company will not qualify for the lower company tax rate if more than 80% of its assessable income is passive income. Read more…

ATO guidance: what is “carrying on a business”?

The ATO has issued Draft Ruling TR 2017/D7 to give guidance on whether a company is carrying on a business for the purpose of s 23AA of the Income Tax Rates Act 1986. Read more…

Total superannuation balances: reporting obligation modified

The ATO has agreed to modify the reporting obligation for total superannuation balances, in recognition that some funds may not be in a position to report the correct accumulation phase value (APV) for 30 June 2017. Read more…

Fringe benefits tax: should an Uber be treated as a taxi?

The ATO has released a discussion paper on the FBT meaning of "taxi" in light of the Federal Court decision (Uber BV v Federal Commissioner of Taxation [2017] FCA 110) that UberX drivers are required to be registered for GST on the basis that they supply taxi travel. Read more…

Tax treatment of long-term construction contracts

Draft Taxation Ruling TR 2017/D8 explains the methods that taxpayers can use to return income derived, and recognise expenses incurred, in long-term construction projects (that is, projects that straddle two or more income years). TR 2017/D8 is a "refresh" of IT 2450 (the original ruling on this matter) and makes no changes to the ATO's views. Read more…

Foreign equity distributions to corporate entities

The ATO has issued two taxation determinations on the application of the foreign equity distribution rules in Subdiv 768-A of the Income Tax Assessment Act 1997 (ITAA 1997) where the recipient is a corporate partner in a partnership or a corporate beneficiary of a trust. Read more…

Compensation for ATO systems outages

After the ATO's unplanned system outages, it provided lodgment deferrals, and remitted interest and penalties where the outages affected practitioners and their clients' lodgments. But what about compensation?

The ATO has advised that it assesses claims for compensation in two ways: Read more…

Small business restructure rollover: changes

The ATO has made a draft determination, under the Commissioner's "remedial power" in the Taxation Administration Act 1953, which proposes to modify how the small business restructure rollover (SBRR) operates. Read more…

Tax cut closed off for passive investment companies

The Government has released exposure draft legislation to deny access to the lower corporate tax rate of 27.5% for companies with predominantly passive income. The draft legislation would amend the Income Tax Rates Act 1986 to ensure that a "base rate entity" will qualify for the lower tax rate only if:

  • its "base rate entity passive income" is less than 80% of its assessable income for the year; Read more…

The Government has announced a package of reforms to combat phoenix activities, including the introduction of a Director Identification Number (DIN).

Phoenixing involves deliberately transferring assets from a failed or insolvent company to a new company, with the intention to avoid paying the original company's creditors, tax and employee entitlements (that is, the new company illegally "rises from the ashes" of the indebted company). Read more…

Tax measures for affordable housing

The Government has released draft tax legislation to implement elements of its housing affordability plan. The following measures are contained in the draft legislation:

  • enabling investors to obtain a 60% CGT discount in relation to affordable rental housing if they hold the investment for at least three years. Individual investors may invest by holding an ownership interest in affordable housing directly or through certain trusts, such as holding units within a managed investment trust (an MIT); Read more…

A Bill has been introduced into Parliament to:

  • establish the First Home Super Saver (FHSS) scheme, which will allow individuals who are saving for their first home to take advantage of the concessional taxation arrangements that apply to the superannuation system; and
  • allow individuals aged 65 or over to use the proceeds from the sale of their main residence to make contributions of up to $300,000 to their superannuation provider (known as "downsizer contributions").  Read more…

No GST on digital currency: Bill

The GST Act (A New Tax System (Goods and Services Tax) Act 1999) is being amended to ensure that supplies of digital currency receive equivalent GST treatment to supplies of money.

Under the changes, supplies of digital currency made on and after 1 July 2017 will be disregarded for GST purposes unless the supply is undertaken in exchange for a payment of money or digital currency. Read more…

New financial and superannuation complaints authority

Legislation has now been introduced to establish a new external dispute resolution (EDR) framework and an enhanced internal dispute resolution (IDR) framework for the Australian financial system. Read more…

Superannuation guarantee

Crackdown on employer non-compliance

The Government has announced a package of reforms to give the ATO near-real-time visibility over employers' superannuation guarantee (SG) compliance. The package includes measures to:

  • require super funds to report contributions received more frequently (at least monthly) to the ATO;
  • roll out Single Touch Payroll (STP), with employers that have 20 or more employees transitioning to STP from 1 July 2018, and smaller employers from 1 July 2019 – STP is designed to reduce the regulatory burden on business and transform compliance by aligning payroll functions with regular reporting of taxation and superannuation obligations;
  • improve the effectiveness of the ATO's recovery powers, including strengthening director penalty notices and using security bonds for high-risk employers; and
  • give the ATO the ability to seek court-ordered penalties in the most egregious cases of non-payment.  Read more…

Bills for increase in Medicare levy to 2.5%

The Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 has been introduced into Parliament to implement the Government's 2017–2018 Budget announcement to increase the Medicare levy by 0.5% to 2.5% from 1 July 2019 in order to help finance the National Disability Insurance Scheme (NDIS). Nine other Bills have been introduced to increase the following rates that are linked to the top personal tax rate: Read more…

Budget changes to foreign resident CGT: draft legislation

Treasury has released draft legislation to implement 2017–2018 Federal Budget measures relating to the CGT liability of foreign residents and these measures are set out in more detail below.  Read more…

Foreign resident CGT withholding: early recognition of tax credit

The Commissioner has made a determination to modify the time at which the vendor is entitled to a tax credit in respect of an amount withheld under the foreign resident CGT withholding rules. Read more…

Further guidance for tax losses: new “similar business” test

The ATO has released Law Companion Guideline LCG 2017/D6 on how the ATO will apply the new "similar business test" to supplement the existing "same business test" used for testing whether a company can utilise an earlier year tax loss.  Read more…

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