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
Registered
24 July 2014
Purpose
This Practice statement will provide guidance to staff on the relevant administrative processes when applying the promoter penalty laws in:
- Division 290 of Schedule 1 to the Taxation Administration Act 1953, and
- section 68B of the Superannuation Industry (Supervision) Act 1993 dealing with the promotion of illegal early release superannuation schemes.
Expected completion
Late 2019
Contact
Thomas Rice, Private Wealth
Phone: (08) 8208 1260
Thomas.Rice@ato.gov.au
[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.
Contact
PAGPW&IC@ato.gov.au
[3712] Environmental protection activities
Title
Final Taxation Ruling
Income tax: environmental protection activities
Registered
2 April 2015
Purpose
The final Ruling will provide 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
August 2019
Comments
Draft TR 2019/D3 published on 17 April 2019. Comments closed on 17 May 2019.
Contact
Tanya Canavan, Public Groups and International
Phone: (07) 3213 5502
Tanya.Canavan@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?
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
September 2019
Comments
Draft TR 2017/D4 published on 17 May 2017. The final Ruling is currently undergoing internal review and may require additional consultation.
Contact
Jo Torrens, Tax Counsel Network
Phone: (02) 9374 2035
Jo.Torrens@ato.gov.au
[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.
Contact
PAGPW&IC@ato.gov.au
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
July 2019
Comments
Draft TR 2016/D3 published on 14 December 2016.
Contact
Jason Hill, Public Groups and International
Phone: (07) 3213 5307
Jason.Hill@ato.gov.au
[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. We note that the position taken in TR 2017/D6 recognises there being no legislative support for a bright line test and it is a question of fact and circumstances. We are currently developing practical guidance on when travel allowances paid to employees are deductible (or otherwise deductible) and when they will attract FBT.
Pending the provision of that additional guidance, the ATO will continue to accept that travel allowances paid to employees for periods of 21 days or less of travel can be treated by the employer as deductible and by the employee as assessable income with the employee being able to deduct allowable expenses.
Contact
Kim Hall, Individuals
Phone: (07) 3149 5412
Kim.Hall@ato.gov.au
[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
September 2019
Comments
We are undertaking targeted consultation on this draft Ruling prior to formal publication for comment.
Contact
Deb Masterton, Individuals
Phone: (03) 6221 0671
Deb.Masterton@ato.gov.au
[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
September 2020
Contact
Deb Masterton, Individuals
Phone: (03) 6221 0671
Deb.Masterton@ato.gov.au
[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. We are currently considering submissions received.
Contact
Stephen Phillips, Public Groups and International
Phone: (08) 9268 0090
Stephen.Phillips@ato.gov.au
[3887] Infrastructure privatisation framework
Title
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
December 2019
Comments
Draft guidance was issued for consultation on 31 January 2017. Further updates were on hold pending the enactment of the new legislation.
Staged updates have commenced and are planned to be released progressively through to December 2019.
Contact
Blake Sly, Public Groups and International
Phone: (02) 4923 1814
Blake.Sly@ato.gov.au
[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
July 2019
Contact
PAGPW&IC@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?
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 Income Tax Assessment Act 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
Late 2019
Contact
David Newland, Private Wealth
Phone: (03) 6221 0625
David.Newland@ato.gov.au
[3905] Construction of capital assets
Title
Draft Taxation Ruling
Income tax: 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
Contact
PGIPAGUnit@ato.gov.au
[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
Late 2019
Contact
Maria Noia, Private Wealth
Phone: (03) 9945 5843
Maria.Noia@ato.gov.au
Emma Butler, Tax Counsel Network
Phone: (03) 8601 9869
Emma.Butler@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
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
Late 2019
Contact
Tom Rengers, Private Wealth
Phone: (07) 3213 6955
Tom.Rengers@ato.gov.au
[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
Late 2019
Contact
Tom Rengers, Private Wealth
Phone: (07) 3213 6955
Tom.Rengers@ato.gov.au
[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
To be advised
Comments
Draft LCR 2018/D7 published on 24 August 2018.
Contact
Jonathan Marsh, Policy Analysis and Legislation
Phone: (03) 8632 4090
Jonathan.Marsh@ato.gov.au
[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
September 2019
Contact
Kim Hall, Individuals
Phone: (07) 3149 5412
Kim.Hall@ato.gov.au
[3952] Restructuring for demerger relief
Title
Final Taxation Determination
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
The final Determination will provide the Commissioner's view 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
September 2019
Comment
Draft TD 2019/D1 published on 20 March 2019. Comments period closed on 30 April 2019.
Contact
Japheth Gill, Public Groups and International
Phone: (02) 9374 2337
PGIPAGUnit@ato.gov.au
[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 to road freight, security, investigation, surveillance and information technology services.
Expected publication
July 2019
Comments
Draft LCR 2018/D8 published on 5 December 2018.
See also:
- TPRS 2019/1 Taxable Payments Reporting System – Reporting Exemptions for Certain Entities Determination 2019
Contact
Sarah Welch, Tax Counsel Network
Phone: (03) 9275 2588
Sarah.Welch@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
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 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. Comments period closed on 28 May 2019.
Contact
Simon Weiss, Tax Counsel Network
Phone: (02) 6216 1943
Simon.Weiss@ato.gov.au
[3962] Commercial debt forgiveness – for reasons of natural love and affection
Title
Draft Taxation Determination
Can an entity that is not a natural person forgive a debt for reasons of natural love and affection?
Registered
February 2019
Purpose
The draft Determination 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
August 2019
Comments
Subject to further consideration of issues raised, it is planned that the draft Determination provide the preliminary view that an entity, that is not a natural person, cannot forgive a debt for reasons of natural love and affection.
Contact
Matthew Maher, Tax Counsel Network
Phone: (03) 8632 4252
Matthew.Maher@ato.gov.au
Karen Rooke, Tax Counsel Network
Phone: (02) 9374 1059
Karen.Rooke@ato.gov.au
[3963] Division 7A – interposed entity rules
Title
Final Addendum to Taxation Determination 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 completion
Late 2019
Contact
Anthony Bach, Tax Counsel Network
Phone: (07) 3213 6638
Anthony.Bach@ato.gov.au
[3974] Foreign income tax offset – inclusion of capital gains
Title
Draft Taxation Determination
Income tax: can capital gains be included under subparagraph 770-75(4)(a)(ii) of the Income Tax Assessment Act 1997 when calculating the foreign income tax offset limit?
Registered
May 2019
Purpose
This draft Determination will provide the Commissioner's view that capital gains are not captured when calculating the foreign income tax offset limit.
Expected completion
September 2019
Contact
Renae Ali, Tax Counsel Network
Phone: (03) 9285 1702
Renae.Ali@ato.gov.au
We are developing advice and guidance on the following income tax issues.