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  • 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
    The final Ruling will provide advice on how the taxation laws apply to an employee remuneration trust arrangement.

    Expected completion
    September 2018

    Comments
    Draft TR 2017/D5 published on 8 June 2017, and replaces Draft 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
    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
    September 2018

    [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
    To be advised

    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
    October 2018

    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
    31 October 2018

    Comments
    Draft TR 2016/D3 published on 14 December 2016. A revised draft will be circulated to industry stakeholders in September, 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
    October 2018

    [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
    January 2019

    [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
    The draft Determination will set out the Commissioner's proposed view on a receiver's obligation to retain money in respect of post-appointment tax liabilities.

    Expected completion
    December 2018

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

    [3796] Consolidation – tax offsets

    Issue
    Draft Taxation Determination

    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
    The draft Determination will replace ATO ID 2015/6 and provide proposed advice 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
    The draft Ruling will set out proposed views 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:

    [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
    3 October 2018

    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
    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
    To be advised

    Comments
    Draft LCR 2017/D6 published on 21 July 2017. This work is on hold as the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017 is before the Senate and has not been passed.

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

    Title
    Final 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
    The final Determination will 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

    Comments
    Draft TD 2018/D2 published on 13 June 2018. Comments and submissions received during the consultation process are being considered.

    [3885] Trust splitting

    Issue
    Final Taxation Determination
    Income tax: will a trust split arrangement of the type described in this Determination cause a new trust to be settled over some but not all assets of the original trust with the result that CGT event E1 in subsection 104–55(1) of the Income Tax Assessment Act 1997 happens?

    Registered
    13 September 2017

    Purpose
    The final Determination will provide the Commissioner's 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
    Draft TD 2018/D3 published on 11 July 2018. Comments period closed on 10 August 2018. We are considering comments and issues raised during consultation.

    See also:

    [3886] Taxpayer alerts

    Title
    Law Administration Practice Statement
    Taxpayer alerts

    Registered
    13 September 2017

    Purpose
    The proposed practice statement will replace PS LA 2008/15 with updated guidance to staff on the process for initiating and issuing a Taxpayer Alert.

    Expected completion
    September 2018

    Comments
    A draft of the replacement practice statement was sent to members of the National Tax Liaison Group for limited consultation. We have considered the feedback received and are finalising the practice statement.

    [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
    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
    October 2018

    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
    September 2018

    [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
    September 2018

    [3903] Treaty relief on dividends and interest for dual resident individuals

    Title
    Draft Taxation Determination
    Income tax: treaty relief on Australian sourced dividends and interest derived by a dual resident individual who is deemed a resident solely of a foreign country under a double tax treaty

    Registered
    29 January 2018

    Purpose
    The draft Determination will provide proposed clarification of the calculation of the maximum Australian tax chargeable (and any corresponding amount of tax relief available) under a tax treaty on the dividend and interest income of a dual resident individual whose residency is tie-broken solely to a foreign country for tax treaty purposes.

    Expected completion
    December 2018

    [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
    17 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

    [3911] 'In Australia' requirement deductible gift recipients

    Title
    Final Taxation Ruling
    Income tax: ‘in Australia’ requirement for certain deductible gift recipients and income tax exempt entities.

    Registered
    March 2018

    Purpose
    The final Ruling will provide the Commissioner's view of the legal and practical operation of conditions in Division 30 and Division 50 of the Income Tax Assessment Act 1997 which require that:

    • a body seeking deductible gift recipient status be 'in Australia’
    • an entity seeking income tax exemption must have a ‘physical presence in Australia, and to that extent, incur its expenditure and pursue its objectives principally in Australia’.

    Expected completion
    To be advised

    Comments
    Draft TR 2018/D1 published on 4 July 2018. Comments period closed on 10 August 2018. We are considering comments and issues raised during consultation.

    [3914] Residential premises deductions – travel expenditure relating to rental investment properties

    Title
    Final Law Companion Ruling
    Income tax: residential premises deductions – travel expenditure relating to rental investment properties

    Registered
    August 2017

    Purpose
    The final Ruling will provide guidance on the application of section 26–31 of the Income Tax Assessment Act 1997 which disallows deductions for certain travel expenditure relating to the use of residential premises as residential accommodation.

    Expected completion
    To be advised

    Comments
    Draft LCR 2018/D2 published on 2 May 2018. The final Ruling is currently being developed.

    [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 83A105(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

    [3919] Retirement villages – exit ACA calculation

    Title
    Draft Practical Compliance Guideline
    Retirement villages: ATO compliance approach to the exit allocable cost amount calculation at step 4 for certain resident liabilities under lease premium or loan/lease occupancy agreements.

    Registered
    May 2018

    Purpose
    The draft Guideline will provide proposed practical guidance on the treatment of certain liabilities arising under loan/lease or lease premium arrangements on exit of a subsidiary member (that owns or develops a retirement village) of a consolidated group for the purposes of section 711–45 of the Income Tax Assessment Act 1997.

    Expected completion
    October 2018

    [3920] Consolidation churning measure

    Title
    Final Law Companion Ruling
    Consolidation: churning of joining entities by foreign-owned groups

    Registered
    November 2017

    Purpose
    The final Ruling will provide advice on the application of section 716–440 of the Income Tax Assessment Act 1997 which addresses the interaction between the non-resident capital gains tax rules and the consolidation regime in respect of certain group restructures.

    Expected completion
    31 October 2018

    Comments
    Draft LCR 2018/D3 published on 9 May 2018. The final Ruling is currently being developed.

    [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
    December 2018

    [3925] Ancillary funds – exercising the discretion to reduce the minimum annual distribution rate

    Title
    Law Administration Practice Statement
    Administration of the Commissioner’s discretion to reduce the minimum annual distribution rate for ancillary funds

    Registered
    June 2018

    Purpose
    The practice statement will provide process guidance to staff when considering the exercise of the Commissioner’s discretion to reduce the minimum annual distribution rate under the amended Private Ancillary Fund Guidelines 2009 and the Public Ancillary Fund Guidelines 2011.

    Expected completion
    September 2018

    [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
    To be advised

    [3933] Expansion of the taxable payments reporting system – courier and cleaning industries

    Title
    Final Law companion ruling
    Expansion of the taxable payments reporting system to contractors in the courier and cleaning industries

    Registered
    July 2018

    Purpose
    The final Ruling will explain the taxable payment reporting requirements for businesses who supply courier or cleaning services from 1 July 2018.

    Expected completion
    To be advised

    Comments
    Draft LCR 2018/D6 published on 1 August 2018. The comments period closes on 14 September 2018.

    [3934] Pension tax bonuses

    Title
    Draft Taxation Ruling
    Application of section 99B of the Income Tax Assessment Act 1936

    Registered
    September 2018

    Purpose
    The draft Ruling will set out the proposed ATO view on the scope and application of section 99B.

    Expected completion
    19 December 2018

    [3935] Enterprise tax plan

    Title
    Final Practical Compliance Guideline
    Enterprise Tax Plan: small business company tax rate change: compliance and administrative approaches for the 2015-16, 2016-17 and 2017-18 income years

    Registered
    July 2018

    Purpose
    The final Guideline will provide compliance and administrative approaches for corporate tax entities that have faced practical difficulties in determining their corporate tax rate and corporate tax rate for imputation purposes in the 2015-16, 2016-17 and 2017-18 income years.

    Expected completion
    To be advised

    Comments
    Draft PCG 2018/D5 published on 25 July 2018. Comments period closed on 24 August 2018.

    [3936] Disposal of dwellings acquired from a deceased estate

    Title
    Final Practical Compliance Guideline
    The Commissioner's discretion to extend the two year period to dispose of dwellings acquired from a deceased estate

    Registered
    August 2018

    Purpose
    The final Guideline will outline the factors we will consider when deciding whether to allow a longer period for trustees or beneficiaries of deceased estates to sell a dwelling acquired from the estate. The Guideline will also set out a ‘safe harbour’ compliance approach.

    Expected completion
    To be advised

    Comments
    Draft PCG 2018/D6 published on 22 August 2018. Comments period closes 21 September 2018.

    [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. Comments period closes 5 October 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
    26 June 2019

    [3942] Section 100A reimbursement agreements

    Title
    Draft Taxation Ruling
    Income tax: section 100A: reimbursement agreements – purpose and ordinary dealing exclusions

    Purpose
    The draft Ruling will provide the Commissioner’s preliminary views on the exclusions from a ‘reimbursement agreement’ for:

    • agreements not entered into with a purpose of eliminating or reducing someone’s income tax, and
    • agreements entered into in the course of ordinary family or commercial dealings.

    Expected completion
    December 2018

    Last modified: 24 Sep 2018QC 50315