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  • Advice under development – income tax issues

    We are developing advice and guidance on the following income tax issues.

    See also:

    [3688] Promoter penalty laws

    Title
    Law Administration Practice Statement
    Administration of the promoter penalty laws (Division 290 of Schedule 1 to the Taxation Administration Act 1953)

    Registered
    24 July 2014

    Purpose
    The practice statement will provide guidance to staff on the relevant administrative processes when applying the promoter penalty laws.

    Expected completion
    To be advised

    [3702] Capital allowances – composite items

    Title
    Final Taxation Ruling
    Income tax: composite items and identifying the depreciating asset for the purposes of working out capital allowances

    Registered
    17 November 2014

    Purpose
    The final Ruling will consolidate current ATO views into a taxation ruling.

    Expected completion
    To be advised

    Comments
    Draft TR 2017/D1 published on 18 January 2017. The publication of this Ruling is delayed due to ongoing consideration of comments received.

    [3712] Environmental protection activities

    Title
    Draft Taxation Ruling
    Income tax: environmental protection activities

    Registered
    2 April 2015

    Purpose
    The draft Ruling will provide proposed clarification on whether a taxpayer is able to deduct expenditure incurred in an income year for the sole or dominant purpose of carrying on environmental protection activities.

    Expected completion
    Early 2019

    [3718] Corporate limited partnership ‘credits’

    Title
    Final Taxation Ruling
    Income tax: when does a corporate limited partnership ‘credit’ an amount to a partner in that partnership?

    Registered
    23 April 2015

    Purpose
    The final Ruling will clarify when an amount is credited within the meaning of section 94M of the Income Tax Assessment Act 1936.

    Expected completion
    June 2019

    Comments
    Draft TR 2017/D4 published on 17 May 2017. The draft is currently undergoing internal review and may require additional consultation.

    [3734] Deductibility of legal expenses

    Title
    Draft Taxation Ruling
    Income tax: deductibility of legal expenses under section 8–1 of the Income Tax Assessment Act 1997

    Registered
    14 December 2015

    Purpose
    The draft Ruling will provide a proposed consolidation of current ATO views into one product using a principles–based approach to assist taxpayers to determine the deductibility of their legal expenses.

    Expected completion
    To be advised

    Comments
    Publication is delayed due to ongoing internal review processes.

    See also:

    [3755] Withholding provisions relating to natural resource income

    Title
    Final Taxation Ruling
    Income tax: application of section 6CA of the Income Tax Assessment Act 1936 and Australia’s tax treaties and the payer’s withholding obligations

    Registered
    8 April 2016

    Purpose
    The final Ruling will provide certainty on the application of section 6CA of the ITAA 1936, section 12–325 of Schedule 1 to the Taxation Administration Act 1953 and their interactions with Australia’s tax treaties.

    Expected completion
    March 2019

    Comments
    Draft TR 2016/D3 published on 14 December 2016. A revised draft will be circulated to industry stakeholders, with further discussion to be held prior to finalisation.

    [3756] Deduction for work related travel expenses

    Title
    Final Taxation Ruling
    Income tax and fringe benefits tax: when are deductions allowed for employees' travel expenses?

    Registered
    14 April 2016

    Purpose
    The final Ruling will clarify when deductions are available for work-related travel expenses.

    Expected completion
    To be advised

    Comments
    Draft TR 2017/D6 published on 28 June 2017.

    [3767] Personal services income – meaning of personal services business

    Title
    Draft Taxation Ruling
    Income tax: the meaning of personal services income and what is a personal services business

    Registered
    22 July 2016

    Purpose
    The draft Ruling will provide a proposed consolidation of TR 2001/7 Income tax: the meaning of personal services income and TR 2001/8 Income tax: what is a personal services business.

    Expected completion
    April 2019

    [3768] Personal services income – attribution and deductions

    Title
    Draft Taxation Ruling
    Income tax: attribution of personal services income and deductions relating to that income

    Registered
    22 July 2016

    Purpose
    The draft Ruling will provide a proposed consolidation of TR 2003/6 Income tax: deductions that relate to personal services and TR 2003/10 Income tax: attribution of personal services income.

    Expected completion
    June 2019

    [3840] Deductibility of seismic data expenses under section 40–25 of the ITAA 1997

    Title
    Final Taxation Ruling
    Income tax: capital allowances expenditure incurred by a service provider in collecting and processing multi-client seismic data

    Registered
    18 January 2017

    Purpose
    The final Ruling will clarify deductions for mining industry service providers who license seismic data on a non-exclusive basis.

    Expected completion
    To be advised

    Comments
    Draft TR 2017/D11 published on 20 December 2017. The ATO is currently considering submissions received.

    [3846] Business continuity test – carrying on a similar business

    Title
    Final Law Companion Ruling
    The business continuity test – carrying on a similar business

    Registered
    July 2017

    Purpose
    Draft LCR 2017/D6 provides draft guidance on what ‘carrying on a similar business’ means for the purposes of the new 'similar business test' introduced by the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017. Under this new test, a company will be able to utilise tax losses made from carrying on a business against income derived from carrying on a similar business following a change in ownership or control.

    Expected completion
    March 2019

    Comments
    Draft LCR 2017/D6 published on 21 July 2017. This work was previously on hold as the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 was being considered by the Senate.

    [3887] Infrastructure privatisation framework

    Issue
    Privatisation and Infrastructure – Australian Federal Tax Framework

    Registered
    2 March 2015

    Purpose
    The intended guidance will set out the ATO’s overall position in relation to a range of infrastructure-related tax issues.

    Expected completion
    Draft guidance was issued for consultation on 31 January 2017. Further updates are on hold.

    Comment
    Publication is delayed pending the enactment of the legislation that will give effect to the package of measures on stapled structures and other associated issues as announced by the TreasurerExternal Link on 27 March 2018. A review of standard Public Private Partnerships is also underway.

    [3888] Carrying on a business

    Title
    Final Taxation Ruling
    Income tax: When does a company carry on a business within the meaning of section 23AA of the Income Tax Rates Act 1986?

    Registered
    1 October 2017

    Purpose
    The final Ruling will provide advice on when a company carries on a business, including targeted examples explaining the Commissioner’s view on whether a company carries on business in common factual scenarios.

    Expected completion
    February 2019

    Comments
    Draft TR 2017/D7 published on 18 October 2017.

    See also:

    [3898] Early stage innovation company – expense tests

    Title
    Draft Taxation Determination
    Income tax: tax incentives for early stage investors: does an expense need to be ‘incurred’ in order to be taken into account under subparagraph 360–40(1)(a)(ii) or paragraph 360-40(1)(b) of the Income Tax Assessment Act 1997?

    Registered
    November 2017

    Purpose
    The draft Determination will provide proposed clarification of the expenses taken into account in determining whether a company meets the early stage limb of the early stage innovation company tests.

    Expected completion
    Early 2019

    [3899] Division 7A – undue hardship – corporate trustees

    Title
    Draft Taxation Determination
    Income tax: can a corporate trustee be caused to suffer undue hardship due to payment of a debt for the purposes of subsection 109G(4) of the Income Tax Assessment Act 1936?

    Registered
    December 2017

    Purpose
    The draft Determination will provide the Commissioner's proposed view on whether a corporate trustee could suffer undue hardship on payment of a debt owed to a company for the purposes of subsection 109G(4) of the Income Tax Assessment Act 1936.

    Where a private company forgives a debt owed to it by a corporate trustee, the forgiveness of debt would potentially be treated as a deemed dividend under Division 7A unless the Commissioner is satisfied of a number of conditions contained in subsection 109G(4) of the ITAA 1936. One of those conditions is that the Commissioner must be satisfied that the debt was forgiven because payment of the debt by the corporate trustee would have caused undue hardship.

    Expected completion
    To be advised

    [3905] Capital allowances: construction of capital assets

    Title
    Draft Taxation Ruling
    Income tax: capital allowance: expenditure incurred in the building and construction of capital assets

    Registered
    January 2018

    Purpose
    The draft Ruling will provide proposed clarification of the appropriate treatment of labour and other costs associated with the building and construction of capital assets.

    Expected completion
    To be advised

    [3917] Employee share schemes – what constitutes a ‘genuine disposal restriction’

    Title
    Draft Taxation Determination
    Income tax:  employee share schemes – when you are genuinely restricted from disposing of a beneficial interest in a right or share

    Registered
    May 2018

    Purpose
    The draft Determination will set out the Commissioner’s proposed view on when an employee is considered to be genuinely restricted from disposing their beneficial interest in a right or share acquired under an employee share scheme, for the purposes of paragraphs 83A–105(6)(b), 83A–115(4)(b), 83A–115(7)(d) and 83A-120(4)(c) of the Income Tax Assessment Act 1997.

    Expected completion
    To be advised

    [3922] Research and development building exclusion

    Title
    Draft Taxation Ruling
    Income tax: research and development tax offset: expenditure incurred to acquire or construct a building

    Registered
    10 May 2018

    Purpose
    The draft Ruling will provide proposed advice on when expenditure incurred to acquire or construct a building cannot be notionally deducted for the purposes of the research and development tax offset under paragraph 355–225(1)(a) of Income Tax Assessment Act 1997.

    Expected completion
    Early 2019

    [3929] Research and development – expenditure not at risk

    Title
    Research and development – expenditure not at risk

    Registered
    July 2018

    Purpose
    The proposed advice will explain the scope and operation of section 355-405 of the Income Tax Assessment Act 1997 which limits claims to R&D expenditure that is ‘at risk’. We are aware of some ongoing uncertainty about the application of the ‘at risk’ requirement to various scenarios where the R&D activities are carried out in the context of commercial contracts for the supply of goods or services. The advice will address these scenarios, other concerns with the operation of the provisions and bring together existing advice and guidance on these issues.

    Expected completion
    Early 2019

    [3937] Base rate entities and base rate entity passive income

    Title
    Final Law Companion Ruling
    Base rate entities and base rate entity passive income

    Registered
    August 2018

    Purpose
    The final Ruling will provide advice on the general scheme of the new law in relation to base rate entities, what constitutes base rate entity passive income and how to calculate a corporate tax entity’s corporate tax rate for imputation purposes.

    Expected completion
    February 2019

    Comments
    Draft LCR 2018/D7 published on 24 August 2018.

    [3939] Corporate collective investment vehicles

    Title
    Draft Practical Compliance Guideline
    Tax treatment of corporate collective investment vehicles (CCIVs)

    Registered
    August 2018

    Purpose
    To provide guidance on the proposed new law in relation to CCIVs, including the:

    • introduction of CCIVs and their tax treatment
    • establishment and reporting obligations for CCIVs to the ATO
    • information for potential Australian and foreign investors (and their intermediaries) on tax obligations when investing in a CCIV.

    Expected completion date
    December 2019

    [3943] Deductibility of work-related expenses

    Title
    Draft Taxation Ruling
    Income tax: deductibility of work-related expenses

    Registered
    October 2018

    Purpose
    The draft Ruling will provide proposed guidance on when an employee can deduct a work-related expense under section 8-1 of the Income Tax Assessment Act 1997.

    Expected completion
    June 2019

    [3952] Corporate restructuring

    Title
    Income tax: what is a 'restructuring' for the purposes of subsection 125-70(1) of the Income Tax Assessment Act 1997?

    Registered
    November 2018

    Purpose
    To provide guidance on how to establish the scope of a 'restructuring', which sets the factual parameters for the application of the conditions in subsection 125-70(1) that must be satisfied to qualify as a demerger.

    Expected completion
    March 2019

    [3954] Expansion of the taxable reporting system – road freight, security, investigation or surveillance and IT services

    Title
    Final Law Companion Ruling
    Expansion of the taxable payments reporting system to road freight, security, investigation or surveillance, and information technology services

    Registered
    November 2018

    Purpose
    The final Ruling will provide the ATO view of amendments proposed by Schedule 2 of the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Act 2018 to expand the taxable payments reporting system (TPRS) to road freight, security, investigation, surveillance and information technology services.

    Expected publication
    To be advised

    Comments
    Draft LCR 2018/D8 published on 5 December 2018. This Ruling will not be finalised before the accompanying Legislative Instrument is registered.

    [3957] Taxation privileges and immunities of international organisations and persons connected with them

    Title
    Final Taxation Ruling
    Income tax: income of international organisations and persons connected with them that is exempt from income tax

    Registered
    November 2018

    Purpose
    The final Ruling will update the ATO view in TR 92/14 Income tax: taxation privileges and immunities of prescribed International Organisations and their staff following the recent High Court decisions in Macoun v. FC of T 2015 ATC 20-543 and FC of T v. Jayasinghe 2017 ATC 20-627.

    Expected completion
    July 2019

    Comments
    TR 92/14 will be withdrawn when the final Ruling issues.

    [3962] Commercial debt forgiveness – for reasons of natural love and affection

    Title
    Can an entity that is not a natural person forgive a debt for reasons of natural love and affection?

    Registered
    February 2019

    Purpose
    The guidance will set out the Commissioner's proposed view on whether an entity that is not a natural person can forgive a debt for reasons of natural love and affection.

    Expected completion
    To be advised

    [3963] Division 7A – interposed entity rules

    Title
    Final Addendum to TD 2018/13
    Income tax: Division 7A: can section 109T of the Income Tax Assessment Act 1936 apply to a payment or loan made by a private company to another entity (the 'first interposed entity') where that payment or loan is an ordinary commercial transaction?

    Registered
    February 2019

    Purpose
    TD 2018/13 will be amended to add a further example, which has arisen from recent casework.

    Expected publication
    June 2019

    Last modified: 11 Feb 2019QC 50315