• Advice under development – income tax issues

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

    See also:

    [3599] Employee remuneration trust arrangements

    Title
    Final Taxation Ruling
    Income tax: employee remuneration trust arrangements

    Registered
    14 November 2012

    Purpose
    To provide advice on how the taxation laws apply to an employee remuneration trust arrangement.

    Expected completion
    December 2017

    Comments
    Draft Taxation Ruling TR 2017/D5 published on 8 June 2017, and replaces TR 2014/D1.

    [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
    To 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
    To consolidate current ATO views into a taxation ruling.

    Expected completion
    To be advised

    Comments
    TR 2017/D1 published on 18 January 2017. The publication of this ruling is delayed due to ongoing internal review processes and the consideration of comments received.

    [3712] Environmental protection activities

    Title
    Draft Taxation Ruling
    Income tax: environmental protection activities

    Registered
    2 April 2015

    Purpose
    To clarify if 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
    March 2018

    Comments
    The publication of this ruling is delayed due to ongoing internal review processes.

    [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
    To clarify when an amount is credited within the meaning of section 94M.

    Expected completion
    31 March 2018

    Comments
    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
    To consolidate current ATO views into one product using a principles-based approach to assist taxpayers to determine the deductibility of their legal expenses.

    Expected completion
    January 2018

    Comments
    The publication of this ruling is delayed due to ongoing internal review processes. See also finalised consultation matter [201569].

    [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
    To provide certainty as to 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
    31 March 2018

    Comments
    TR 2016/D3 was published on 14 December 2016. We will be undertaking further consultation with industry on the draft 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
    To clarify whether deductions are available for work-related travel expenses.

    Expected completion
    To be advised

    Comments
    TR 2017/D6 was 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
    To consolidate 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
    20 November 2017

    [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
    To consolidate TR 2003/6 Income tax: deductions that relate to personal services and TR 2003/10 Income tax: attribution of personal services income

    Expected completion
    April 2018

    [3777] Receiver’s obligation to retain money in respect of post-appointment tax liabilities

    Title
    Draft Taxation Determination
    Income tax: what is a receiver’s obligation to retain money in respect of post-appointment tax liabilities under section 254 of the Income Tax Assessment Act 1936?

    Registered
    11 August 2016

    Purpose
    To provide certainty on a receiver's obligation to retain money in respect of post-appointment tax liabilities.

    Expected completion
    To be advised

    Comments
    When finalised, this ruling will replace TD 2012/D7.

    [3780] Trust vesting

    Title
    Draft Taxation Ruling
    Income tax: trust vesting

    Registered
    August 2016

    Purpose
    To give our view of the trust law and tax law consequences of various issues concerning the vesting of a trust.

    Expected completion
    December 2017

    Comments
    A consultation paper on this topic issued on 2 November 2016.
    See also finalised consultation matter [201657]

    [3796] Consolidation – tax offsets

    Issue
    How does the head company of a consolidated group (or MEC group) satisfy the requirements of section 65-40 of the Income Tax Assessment Act 1997 when it seeks to apply a carried forward tax offset:

    • that remained unused by an entity at the time it joins the head company’s consolidated group, or
    • that remained unused by an entity, including the head company, where the consolidated group was formed.

    Registered
    27 May 2016

    Purpose
    To replace ATO ID 2015/6 and provide guidance more generally on how a joining entity's non-refundable carried forward tax offsets may be accessed and utilised by the head company of the joined consolidated group.

    Expected completion
    To be advised

    [3814] Meaning of ‘alteration, extension or improvement’ in Division 43 of the Income Tax Assessment Act 1997

    Title
    Draft Taxation Ruling
    Income tax: the meaning of the phrase ‘alteration, extension or improvement’ as it appears in Division 43 of the Income Tax Assessment Act 1997.

    Registered
    6 September 2016

    Purpose
    To assist taxpayers in determining whether there is an extension, alteration or improvement for the purposes of the capital works deductions. This in turn may have implications for the deductibility of those expenses under another provision of the ITAA 1997.

    Expected completion
    To be advised

    Comments
    Follow-up consultation was undertaken in December 2016 with stakeholders in response to comments that were provided during the initial consultation.

    See also finalised consultation matter [201603].

    [3830] Commercial transactions - payments or loans made by private companies to an interposed entity

    Title
    Final Taxation Determination
    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
    April 2017

    Purpose
    To reflect the views in ATO ID 2011/104.

    Expected completion
    January 2018

    Comments
    TD 2017/D3 published on 28 June 2017.
    Further follow-up consultation is planned in response to comments received during consultation on the initial draft TD.

    [3836] Employee share scheme arrangements – tax treatment of dividend equivalent payments

    Title
    Final Taxation Determination
    Income tax: when will a dividend equivalent payment, made by a trustee under an employee share scheme that delivers ESS interests taxed by Subdivision 83A-B or 83A-C of the Income Tax Assessment Act 1997 be assessable as remuneration under section 6-5?

    Title
    Final Practical Compliance Guideline
    Dividend equivalent payments made by a trustee under an employee share scheme

    Registered
    8 June 2017

    Purpose
    To provide advice on how the law applies to certain cash payments (‘dividend equivalent payments’) made by a trustee to an employee who is participating in an employee share scheme.

    Expected completion
    December 2017

    Comments
    TD 2017/D2 and PCG 2017/D9 were published on 8 June 2017
    See also finalised consultation matter [201738]. Considering comments received during the consultation period, when the final Determination is issued it will apply to dividend equivalent payments where they are paid under the terms and conditions attached to ESS interests issued on or after 1 January 2018.

    [3840] Deductibility of seismic data under section 40-25 of the Income Tax Assessment Act 1997 (ITAA 1997)

    Title
    Draft Taxation Determination
    Income tax: will expenditure incurred by service providers in collecting and processing seismic data which is then licensed on a non-exclusive basis to multiple clients in the mining, oil and gas industries be deductible under section 40 25 of the Income Tax Assessment Act 1997 (ITAA 1997)?

    Registered
    18 January 2017

    Purpose
    To clarify deductions for mining industry service providers who license on seismic data on a non-exclusive basis.

    Expected completion
    28 February 2018

    Comments
    The draft is currently undergoing internal review.

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

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

    Registered
    July 2017

    Purpose
    LCG 2017/D6 provides 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
    To be advised

    Comments
    LCG 2017/D6 was published on 21 July 2017

    [3849] Deductibility of interest expenses incurred – beneficiaries of discretionary trusts

    Title
    Draft Taxation Ruling
    Income tax: Deductibility of interest expenses incurred by beneficiaries of discretionary trusts.

    Registered
    March 2017

    Purpose
    To confirm our view about when the beneficiary of a discretionary trust can deduct interest expenses incurred in relation to amounts borrowed and on-lent to the trustee

    Expected completion
    November 2017

    [3857] Treatment of payments for use of an individual's 'public fame' or 'image'

    Title
    Final Practical Compliance Guideline
    Taxation treatment of payments for use and exploitation of a professional sportsperson's 'public fame' or 'image'

    Registered
    18 April 2016

    Purpose
    To set out a ‘Safe Harbour’ for apportioning single payments for, in combination, the provision of a professional sportsperson’s services and the use or exploitation of their ‘public fame’ or ‘image’ under licence.

    Expected completion
    To be advised

    Comments
    PCG 2017/D11 published on 19 July 2017. Comments on the draft closed 1 September 2017. Work is currently underway to review and update the PCG in light of comments. Finalisation anticipated in new year.

    [3865] MAAL – directly in connection with supply

    Title
    Draft Taxation Determination
    Income tax: what does ‘directly in connection with the supply’ mean in sub-paragraph 177DA(1)(a)(ii) of the Income Tax Assessment Act 1936?

    Registered
    May 2017

    Purpose
    To provide guidance on when activities undertaken in Australia will be directly in connection with a supply by a foreign entity under the Multinational Anti-Avoidance Law.

    Expected completion
    28 February 2018

    Comment
    The draft is currently being revised following internal feedback.

    [3875] Deceased estates

    Title
    Final Practical Compliance Guideline
    Income tax: liability of a legal personal representative of a deceased person

    Registered
    28 June 2017

    Purpose
    To assist in providing certainty to Legal Personal Representatives (LPR) of smaller deceased estates when making distributions to beneficiaries as regards to later tax claims on the estate that could make them personally liable. The Guidance is intended to give the LPR’s an understanding of what they can do to ensure that the Commissioner of Taxation will not seek to obtain estate taxation liability amounts of the estate from the LPR after they have distributed estate assets.

    Expected completion
    December 2017

    Comments
    PCG 2017/D12 published on 5 July 2017. We are working with relevant internal stakeholders (including Tax Counsel Network and Operational Policy, Assurance and Law) on analysing feedback and consulting with feedback providers and relevant parties.

    [3876] Nexus for determining whether a depreciating asset is first used for exploration or prospecting

    Title
    Draft Taxation Determination
    Income tax: what is the relevant nexus for determining whether a depreciating asset is first used for exploration or prospecting for the purposes of section 40-80 of the Income Tax Assessment Act 1997?

    Registered
    13 June 2017

    Purpose
    To outline the relevant nexus for determining a depreciating asset is first used for exploration or prospecting for the purposes of section 40-80 of the Income Tax Assessment Act 1997.

    Expected completion
    To be advised

    [3877] What constitutes ‘use’ for the purposes of section 40-80 of the ITAA 1997?

    Title
    Draft Taxation Determination
    Income tax: what constitutes ‘use’ (and potentially first use) of a mining, quarrying or prospecting right, that is a depreciating asset, for the purposes of subsection 40-80(1) of the Income Tax Assessment Act 1997?

    Registered
    13 June 2017

    Purpose
    To outline what constitutes ‘use’ (and potentially first use) of a mining quarrying and prospecting right for the purposes of section 40-80 of the ITAA 1997.

    Expected completion
    To be advised

    [3885] Trust splitting

    Issue
    Draft Taxation Determination
    Income tax: : will a trust split arrangement of the type described in this Determination cause CGT event E1 in subsection 104-55(1) of the Income Tax Assessment Act 1997 to happen?

    Registered
    13 September 2017

    Purpose
    To provide our view on the tax implications of arrangements that are commonly referred to as ‘trust splitting’, in particular whether splitting the trust causes capital gains tax event E1 to occur.

    Expected completion
    To be advised

    Comments
    See also  Matters under consideration [201744]

    [3886] Taxpayer Alerts

    Title
    Law administration practice statement: Taxpayer Alerts

    Registered
    13 September 2017

    Purpose
    To replace PS LA 2008/15 with updated guidance to staff on the process for initiating and issuing a Taxpayer Alert.

    Expected completion
    January 2018

    [3887] Infrastructure privatisation framework

    Title
    Privatisation and Infrastructure – Australian Federal Tax Framework

    Registered
    2 March 2015

    Purpose
    To set out the ATO’s overall position in relation to a range of infrastructure-related tax issues. It is non-binding guidance and intended as a living document, which will be updated as relevant tax laws are amended and new transactions and issues emerge.

    Expected completion
    To be advised

    Comment
    The publication is delayed pending the outcome of Treasury consultation on stapled structures. See also consultation matter [201508]

    [3888] Carrying on a business

    Title
    Final Taxation Ruling
    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
    To provide guidance on when a company carries on a business. The draft taxation ruling will contain targeted examples explaining the Commissioner’s view on whether a company carries on business in common factual scenarios.

    Expected completion
    To be advised

    Comments
    TR 2017/D7 was published on 18 October 2017. It is open for comment until 1 December 2017.
    See also consultation matter [201766]

    [3894] Long term construction contracts

    Title
    Final Taxation Ruling
    Income tax: tax treatment of long term construction contracts

    Registered
    1 August 2017

    Purpose
    This ruling is a refresh of IT 2450 Income tax: recognition of income from long term construction contracts which was published in 1987 and a consolidation with five related Tax Determinations. We’ve used this opportunity to reference a new accounting standard (AASB 15 Revenue from contracts with customers, which takes compulsory effect from 1 January 2018) and incorporate the views expressed in related publications. This means we’ve expanded the content so that it now covers the treatment of both income and deductions in respect of long term construction contracts. The refreshed product does not change the ATO view. This ruling continues to provide the long standing concessional method for reporting notional taxable income from construction contracts, with reference to the new accounting standard.

    Expected completion
    To be advised

    Comments
    TR 2017/D8External Link published on 18 October 2017. It is open for comment until 1 December 2017.

    [3896] Retirement village operators in South Australia – treatment of amounts payable to or by operators under residence contracts

    Title
    Draft Compliance approach appendix
    TR 2002/14 Income tax: taxation of retirement village operators

    Registered
    November 2017

    Purpose
    To provide a practical approach to amounts payable to, or by, a retirement village operator under a residence contract entered into before, on, or after the Retirement Villages Act 2016 comes into effect so that the taxation treatment of amounts payable to or by an operator under residence contracts entered into before the commencement of the Act is not changed by the commencement of that Act.

    Expected completion
    December 2017

    Comments
    The draft appendix will provide complementary practical guidance to the ATO's view in TR 2002/14 following the commencement of the Retirement Villages Act 2016 on 1 January 2018.

    [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
    To clarify the expenses taken into account in determining whether a company meets the early stage limb of the early stage innovation company tests.

    Expected completion
    January 2018

    Last modified: 16 Nov 2017QC 50315