Advice under development – income tax issues
We are developing advice and guidance on the following income tax issues.
See also
[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
Purpose
The final Ruling will consolidate current ATO views into a taxation ruling.
Expected completion
July 2022
Comments
Draft TR 2017/D1 published on 18 January 2017. Due to the time that has elapsed since the release of the draft Ruling and subsequent developments in the law, we propose to reissue a revised draft Ruling for public consultation. The revised draft Ruling will also incorporate changes made to address earlier feedback provided. Contact PAGPW&IC@ato.gov.auif there are any queries in relation to this proposed approach.
Contact
PAGPW&IC@ato.gov.au
[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?
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
To be advised
Comments
Draft TR 2017/D4 published on 17 May 2017.
Contact
Jo Torrens, Office of the Chief Tax Counsel
Phone: (02) 9374 2035
Jo.Torrens@ato.gov.au
Kim Hall, Individuals and Intermediaries
Phone: (07) 3149 5412
Kim.Hall@ato.gov.au
[3767] Personal services income – meaning of personal services business
Title
Final Taxation Ruling
Income tax: personal services income and personal services businesses
Purpose
The final Ruling will provide a 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
June 2022
Comments
Draft TR 2021/D2 published on 11 March 2021. Finalisation of the Ruling is delayed as we continue to consider the issues raised by taxpayers in relation to the draft Ruling.
Contact
Caitlin Petersen, Small Business
Phone: (07) 4753 7964
Caitlin.Petersen@ato.gov.au
[3887] Infrastructure privatisation framework
Title
Privatisation and Infrastructure – Australian Federal Tax Framework
Purpose
The intended guidance will set out the ATO’s overall position in relation to a range of infrastructure-related tax issues.
Expected completion
Mid 2022
Comments
Draft guidance was issued for consultation on 31 January 2017. Further updates are on hold pending the enactment of the new legislation. Staged updates have commenced and are planned to be released progressively.
Finalisation of this item has been delayed due to other priority work:
Contact
Gaurav Gupta, Public Groups and International
Phone: (02) 9762 6939
Gaurav.Gupta@ato.gov.au
[3898] Early stage innovation company – expense tests
Title
Final Taxation Determination
Income tax: tax incentives for early stage investors: what is an 'expense' that is 'incurred’ for the early stage test?
Purpose
The final Determination will set out the Commissioner's view on the expenses taken into account in determining whether a company meets the early stage limb of the early stage innovation company tests.
Expected completion
To be advised
Comments
Draft TD 2019/D5 published on 28 August 2019. Comments period closed on 11 September 2019. Finalisation of this item has been delayed due to other priority work.
Contact
Tom Rengers, Private Wealth
Phone: (07) 3213 6955
Tom.Rengers@ato.gov.au
[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?
Purpose
The draft Determination will set out the Commissioner's preliminary 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.
Expected completion
To be advised
Comments
Finalisation of this item has been delayed due to other priority work.
Contact
Geoff Gibbons, Office of the Chief Tax Counsel
Phone: (03) 6221 0281
Geoff.Gibbons@ato.gov.au
[3905] Construction of capital assets
Title
Final Taxation Ruling
Income tax: application of paragraph 8-1(2)(a) of the Income Tax Assessment Act 1997 to labour costs related to the construction or creation of capital assets
Purpose
The final Ruling will provide clarification of the appropriate treatment of labour and other costs associated with the building and construction of capital assets.
Expected completion
To be advised
Comments
We have received a number of submissions on the draft Ruling TR 2019/D6 which we are considering in detail. The ATO does however maintain its view that labour costs covered by the draft Ruling can be prevented from being deductible under paragraph 8-1(2)(a) of the Income Tax Assessment Act 1997 where they are on capital account and there is no presumption that labour costs are always on revenue account. Taxpayers should be mindful of this when they submit their tax returns.
We recognise that determining the capital/revenue distinction can, in some circumstances be difficult, and we will continue to work through the feedback received prior to finalising the Ruling. In the meantime, if you have any questions or have uncertainties in your position, you can ask us for private advice or other guidance that explains how the law applies to your particular circumstances.
Contact
PGIPAGUnit@ato.gov.au
[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
Purpose
The draft Ruling will set out the Commissioner's preliminary view 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 the Income Tax Assessment Act 1997.
Expected completion
To be advised
Contact
Tom Rengers, Private Wealth
Phone: (07) 3213 6955
Tom.Rengers@ato.gov.au
[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
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 High Court decisions in Macoun v Commissioner of Taxation [2015] HCA 44 and Commissioner of Taxation v Jayasinghe [2017] HCA 26.
Expected completion
To be advised
Comments
Draft TR 2019/D1 published on 27 March 2019. Finalisation is delayed pending enactment of the 2020–21 Budget measure to clarify income tax exemptions for International Monetary Fund and World Bank Group short-term missions.
Contact
Simon Weiss, Office of the Chief Tax Counsel
Phone: (02) 6216 1943
Simon.Weiss@ato.gov.au
[4000] Royalties and software
Title
Draft Taxation Ruling
Income tax: royalties – character of receipts in respect of software
Purpose
Advice on the development and marketing of software was previously provided in TR 93/12 Income tax: computer software. There is a need to provide updated guidance on modern forms of software distribution including digital channels and cloud computing. This Ruling will provide the Commissioner’s view on the circumstances in which amounts in respect of the licensing and distribution of software will be royalties as defined in subsection 6(1) of the Income Tax Assessment Act 1936.
Expected completion
Mid 2022
Comments
Draft TR 2021/D4 published on 25 June 2021. Comments period closed on 30 July 2021. In response to community feedback the draft Ruling will be updated to provide clarity of the Commissioner’s view on the application of Australia’s double tax agreements to relevant cases and the circumstances where the final Ruling will apply before its date of issue. The draft Ruling will also be updated to include amended and new examples. Included will be an example where a receipt requires apportionment. A further draft Ruling will be published before completion.
Contact
Christopher Hogger, Public Groups and International
Phone: (03) 8632 4577
Christopher.Hogger@ato.gov.au
[4005] Expenses associated with vacant land
Title
Final Taxation Ruling
Income tax: expenses associated with holding vacant land
Purpose
This final Ruling will provide the Commissioner's view in relation to the application of section 26-102 of the Income Tax Assessment Act 1997.
Expected completion
July 2022
Comments
Draft TR 2021/D5 published on 4 August 2021. Comments period closed 17 September 2021. Expected completion of this product is delayed, however we are actively working to finalise this product
Contact
Michelle Gainford, Individuals and Intermediaries
Phone: (02) 6058 7954
Michelle.Gainford@ato.gov.au
See also
[4027] Market value for tax purposes
Title
Web guidance
Market valuation for tax purposes
Purpose
The publication is being updated to include more detail on managing the risk of providing a market value for tax purposes.
Expected completion
June 2022
Comments
Targeted consultation has occurred on the draft product and wider consultation is currently on foot.
Contact
Keiron Galloway, Private Wealth
Phone: (03) 6221 0448
Keiron.Galloway@ato.gov.au
See also
[4028] Use of an individual's image
Title
Draft Taxation Determination
Income tax: use of an individual’s image by related entities
Purpose
This draft Determination will set out the Commissioner’s preliminary view on how section 6-5 of the Income Tax Assessment Act 1997 applies to arrangements where an individual with fame establishes a connected entity and enters into an agreement with that entity granting it non-exclusive use of their name, image, likeness, identity, reputation and signature.
Expected completion
To be advised
Comments
This draft Determination updates the view previously expressed in draft Practical Compliance Guideline PCG 2017/D11, which was withdrawn on 24 August 2018.
Targeted consultation has occurred on the draft product.
Contact
Sharon Imbert, Individuals and Intermediaries
Phone: (02) 9354 3115
Sharon.Imbert@ato.gov.au
[4029] Residency tests for individuals
Title
Draft Taxation Ruling
Income tax: residency tests for individuals
Purpose
This draft Ruling will provide the Commissioner's preliminary guidance to individuals to enable them to self-assess their residency status.
Expected completion
August 2022
Comments
In the Decision Impact Statement on Harding v Commissioner of Taxation [2018] FCA 837 the Commissioner advised that Taxation Ruling IT 2650 Income tax: residency – permanent place of abode outside Australia would be updated to reflect the interpretation of 'place of abode'. TR 98/17 Income tax: residency status of individuals entering Australia will also be updated.
Consolidating these residency rulings and adding content to complete the subject matter will clarify the law regarding how taxpayers self-assess residency and reduce uncertainty and the need for further engagement with the ATO.
Expected completion of this product is delayed, however we are actively working to finalise this product
Contact
Ruth Geary, Individuals and Intermediaries
Phone: (02) 6058 7157
Ruth.Geary@ato.gov.au
[4037] Non-commercial business losses – Commissioner's discretion
Title
Draft Practical Compliance Guideline
Income tax: non-commercial losses – Commissioner’s discretion regarding flood, bushfire or COVID-19
Purpose
This draft Guideline will set out the Commissioner's preliminary view on how the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 may provide a safe harbour for individuals that make a loss from non-commercial business activities due to flood, bushfire or COVID-19.
Expected completion
May 2022
Contact
Adam Johnson, Small Business
Phone: (07) 3213 5693
Adam.Johnson@ato.gov.au
[4039] Commissioner’s discretion to determine that an entity does not control another entity
Title
Draft Taxation Determination
Income tax: Commissioner’s discretion to determine that an entity does not control another entity
Purpose
This draft Determination will set out the Commissioner's preliminary view on the meaning of ‘control’ for the purpose of exercising the discretion under subsection 328-125(6) of the Income Tax Assessment Act 1997.
Expected completion
July 2022
Contact
Mark Bertone, Office of the Chief Tax Counsel
Phone: (03) 9275 4180
Mark.Bertone@ato.gov.au
We are developing advice and guidance on the following income tax issues.