Advice under development – income tax issues
We are developing advice and guidance on the following income tax issues.
On this page
[3702] Capital allowances – composite items
Title
Draft 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
May 2023
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.au if 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
[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
March 2023
Comments
Draft guidance was issued for consultation on 31 January 2017. Finalisation of this item has been delayed due to enactment of new legislation and priority work.
Staged updates have commenced and are planned to be released on the Legal Database.
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
Mid 2023
Comments
Finalisation of this item has been delayed due to other priority work.
Contact
Peter Glindemann, Office of the Chief Tax Counsel
Phone: (07) 3213 5401
Peter.Glindemann@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
May 2023
Comments
We have received a number of submissions on 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
[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
July 2023
Comments
The ATO continues to work on this matter with relevant parties.
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 2023
Comments
Draft TR 2021/D4 published on 25 June 2021. Having regard to comments and submissions received in relation to original draft TR 2021/D4, the Commissioner is preparing a revised draft Ruling to issue for further public comment.
Contact
Joseph Meoli, Public Groups and International
Phone: (02) 9374 1853
Joseph.Meoli@ato.gov.au
[4005] Expenses associated with vacant land
Title
Final Taxation Ruling
Income tax: expenses associated with holding vacant land
Purpose
The 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
April 2023
Comments
Draft TR 2021/D5 published on 4 August 2021. Completion of this product has been delayed; however, we are actively working to finalise this Ruling.
Contact
Michelle Gainford, Individuals and Intermediaries
Phone: (02) 6058 7954
Michelle.Gainford@ato.gov.au
[4028] Use of an individual's image
Title
Final Taxation Determination
Income tax: use of an individual’s image by related entities
Purpose
The final Determination will set out the Commissioner’s 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
July 2023
Comments
Draft TD 2022/D3 published on 5 October 2022. Comments period closed on 4 November 2022.
Contact
Sharon Imbert, Individuals and Intermediaries
Phone: (02) 9354 3115
Sharon.Imbert@ato.gov.au
[4029] Residency tests for individuals
Title
Final Taxation Ruling
Income tax: residency tests for individuals
Purpose
The final Ruling will provide the Commissioner's guidance to individuals to enable them to self-assess their residency status.
Expected completion
May 2023
Comments
Draft TR 2022/D2 published on 6 October 2022. Comments period closed on 25 November 2022. Feedback received on the draft is being considered.
Contact
Ruth Geary, Individuals and Intermediaries
Phone: (02) 6058 7157
Ruth.Geary@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
April 2023
Contact
Harsh Datt, Office of the Chief Tax Counsel
Phone: (02) 9374 2867
Harsh.Datt@ato.gov.au
[4055] Financial advice fees
Title
Draft Taxation Determination
Income tax: deductions for fees paid for financial advice
Purpose
This draft Determination will set out the Commissioner's preliminary view on the deductibility of financial advice fees under sections 8-1 (deductions) or 25-5 (deductions for tax-related expenses) of the Income Tax Assessment Act 1997 for individuals who are not carrying on a business.
This Determination will broaden and update TD 95/60, which will be withdrawn when the updated Determination issues.
Expected completion
Mid 2023
Contact
Danijela Jablanovic, Individuals and Intermediaries
Phone: (07) 3213 5864
Danijela.Jablanovic@ato.gov.au
For more information, see Consultation matter [202303].
[4056] Decline in value of a depreciating asset
Title
Decision impact statement on Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2
Purpose
The Decision impact statement provides the ATO’s response to the Full Federal Court decision, which concerned whether the amount of the deduction available under section 40-25 of the Income Tax Assessment Act 1997 for the decline in value of a depreciating asset was the cost of that asset by virtue of the operation of section 40-80 of the ITAA 1997.
Comments
The Decision impact statement on Commissioner on Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2 published on 31 January 2023. Comments period closes on 3 March 2023.
Contact
Nitin Gulati, Office of the Chief Tax Counsel
Phone: (02) 9285 1661
Nitin.Gulati@ato.gov.au
[4057] Deductibility of self-education expenses
Title
Draft Taxation Ruling
Income tax: deductibility of self-education expenses incurred by an employee or an individual carrying on a business
Purpose
This draft ruling will provide a preliminary update of TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business to reflect the repeal of section 82A of the Income Tax Assessment Act 1936, include new case law, and ensure consistency of language across related rulings. It will also include content from TR 92/8 Income tax: deductibility of self education expenses (now withdrawn) regarding why certain legs of travel are or are not deductible.
Expected completion
May 2023
Contact
Ruth Geary, Individuals and Intermediaries
Phone: (02) 6058 7157
Ruth.Geary@ato.gov.au
We are developing advice and guidance on the following income tax issues.