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  • 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

    July 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    Draft guidance was issued for consultation on 31 January 2017.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

    July 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

    To be advised

    Comments

    The ATO is working through a technical matter and will advise of an expected publication date once the matter is resolved.

    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 in mid 2023.

    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

    June 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

    June 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

    May 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

    Comments

    Targeted consultation was undertaken with key professional bodies and financial advice providers. Comments period closed on 6 April 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 closed 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

    June 2023

    Contact

    Ruth Geary, Individuals and Intermediaries

    Phone: (02) 6058 7157

    Ruth.Geary@ato.gov.au

    [4059] Crypto guidance

    Title

    Web guidance

    Tax treatment of crypto assets

    Purpose

    This guidance will provide greater certainty to the community and assist in improving tax compliance on a variety of issues relating to the use of crypto assets.

    We are refreshing and enhancing current ato.gov content to include information on recent developments.

    Expected completion

    June 2023

    Contact

    Klarence Lim, Individuals and Intermediaries

    Phone: (08) 9268 0845

    Klarence.Lim@ato.gov.au

    For more information, see Consultation matter [202309]

    Last modified: 08 May 2023QC 50315