24 June, 2013
Legal News & Analysis – Asia Pacific – Australia – Tax
WHAT YOU NEED TO KNOW
This bulletin outlines significant Australian developments in human resources taxes (FBT, PAYG, SGC, termination payments and payroll tax) during February to May 2013, which might impact your business.
Fringe benefits tax
- ATO Interpretive Decision ID 2013/8—the ATO has published an interpretive decision which considers that an employee who changes their usual place of residence to be closer to where they perform the duties of their employment, even though it is not required by their employer, is "required" to change their usual place of residence in order to perform the duties of their employment for the purposes of section 58B(1)(b)(iii) of the Fringe Benefits Tax Assessment Act 1986 (Cth).
- Proposed legislation to bring airline transport fringe benefits in line with in-house property and residual fringe benefits—the Tax and Super Laws Amendment (2013 Measures No 1) Bill 2013 (Cth) seeks to amend the Fringe Benefits Tax Assessment Act 1986 (Cth) to align the rules for calculating airline transport fringe benefits with the general provisions dealings with in-house property fringe benefits and in-house residual fringe benefits.
- Advisory report on the Tax Laws Amendment (2012 Measures No 6) Bill 2012 (Cth)—the House Standing Committee on Economics has tabled its report on the Tax Laws Amendment (2012 Measures No 6) Bill 2012 (Cth). Schedule 7 of the Bill proposes the removal of the concessional tax treatment of inhouse fringe benefits accessed through salary packaging.
International issues
- ATO Tax Ruling TR 2013/1: The ATO has published TR 2013/1, which explains the meaning of the term 'employer' in the general exclusion provision provided under the Income from Employment Article, or its equivalent, of Australia's tax treaties. The ruling describes the approach to be taken in determining who the employer is for the purpose of the exception.
Payroll tax
- Nowlan Enterprises Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 21—the NSW Administration Decisions Tribunal has upheld the decision of the Chief Commissioner of State Revenue not to de-group two companies for payroll tax purposes.
- Pastel Pines International v Chief Commissioner of State Revenue [2013] NSWADT 49—the NSW Administrative Decisions Tribunal has upheld the decision of the Chief Commissioner of State Revenue to treat two companies as a group.
Queensland payroll tax rulings—the Queensland Office of State Revenue has issued four payroll tax rulings dealing with contractors, employment agency contracts and golf professionals.
Administration
- Chief Commissioner of State Revenue v Print National Pty Ltd [2013] NSWCA 96—the NSW Court of Appeal has held that a taxpayer was "dissatisfied" for the purposes of the Taxation Administration Act 1996 (NSW), and could thus object to the Chief Commissioner's decision to issue notices requiring information, instruments and records, and attendance.
Superannuation
- Administrative Appeals Tribunal cases—the Tribunal has made a number of decisions relating to appeals against the Commissioner's decisions to refuse to exercise his discretion to disregard nonconcessional superannuation contributions or allocate them to another year under section 292-465 of the Income Tax Assessment Act 1997 (Cth). In each of the cases, the taxpayer has made contributions in excess of their non-concessional contributions cap, and has been assessed for excess contributions tax liability.
Budget
2013-14 Federal Budget—the 2013-14 Federal Budget contains a number of changes relating to superannuation and Pay As You Go tax.
Relevant area | At a glance |
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Fringe benefits tax |
ATO Interpretive Decision ID 2013/8 — Fringe Benefits Tax: Employee required to change usual place of residence in order to perform duties of employment
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Proposed legislation to bring airline transport fringe benefits in line with inhouse property and residual fringe benefits
If passed, the changes will apply to airline transport fringe benefits provided on or after 7.30pm (AEST) 8 May 2012. |
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Advisory report on the Tax Laws Amendment (2012 Measures No 6) Bill 2012 (Cth)
The House Standing Committee on Economics has tabled its report on the Tax Laws Amendment (2012 Measures No 6) Bill 2012 (Cth), which is currently before the Senate. Schedule 7 of the Bill proposes the removal of the concessional tax treatment of in-house fringe benefits accessed through salary packaging.
On Schedule 7, the Committee concluded that there are good policy reasons for the amendments. |
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International issues |
ATO Tax Ruling TR 2013/1 — Income tax: the identification of 'employer' for the purposes of the short-term visit exception under the Income from Employment Article, or its equivalent, of Australia's Tax Treaties
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Payroll tax |
Nowlan Enterprises Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADT 21
Section 79 of the Act gives the Chief Commissioner discretion to exclude a member from a group. The Chief Commissioner can only exercise this discretion if satisfied that the business carried on by the person is carried on independently of, and is not connected with, the carrying on of a business by the other member of the group.
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Pastel Pines International v Chief Commissioner of State Revenue [2013] NSWADT 49
The Commissioner treated the taxpayer and JPS Nominees as a group for payroll tax purposes. The Commissioner argued that the Sterelnys were a set of persons who had a controlling interest in both JPS Nominees and the taxpayer within the meaning of section 106I(2)(d) of the Taxation Administration Act 1997 (NSW) (Taxation Administration Act) for the year ending 30 June 2007 and section 72(2)(e) of the Payroll Tax Act 2007 (NSW) (Payroll Tax Act) for the year ending 30 June 2008.
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Queensland payroll tax rulings
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Superannuation |
Administrative Appeals Tribunal cases: Refusal by the Commissioner to exercise his discretion to disregard or reallocate non-concessional superannuation contributions
In Dowling v Commissioner of Taxation [2013] AATA 49, the taxpayer and her husband had held separate superannuation accounts prior to 2008. In 2008-09, her husband transferred his superannuation into a new account in the taxpayer's name (Transaction 1), in order to ensure his entitlement to the age pension when he turned 65. In 2010-11, the taxpayer made another transaction with her existing superannuation account, withdrawing $240,000 and re-contributing $200,000 (Transaction 2).
In coming to this conclusion, the Tribunal took into account factors in relation to Transaction 1 including that while ignorance of the law is not a defence, both the taxpayer and her husband exercised the due diligence of reasonable persons in their position and attempted to get advice in good faith, but inadvertently did not receive advice in a professional manner, and did not have any knowledge of excess contributions and were not in a position to ask appropriate questions about it. Further, no new contributions were actually made, only a rearrangement of existing funds, and the penalty of over $20,000 would be particularly harsh for the taxpayer's own superannuation of about $200,000.
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Administration |
Chief Commissioner of State Revenue v Print National Pty Ltd [2013] NSWCA 96
Section 86 of the Taxation Administration Act provided that a taxpayer who is
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Budget |
2013-14 Federal Budget
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For further information, please contact:
Geoffrey Mann, Partner, Ashurst
[email protected]
Jadie Teoh, Ashurst
[email protected]
Ashurst Tax Practice Profile in Australia
Homegrown Tax Law Firms in Australia