• 2017 completed issues

    The following public advice and guidance issues have been completed.

    [3634] Income tax deductions available to superannuation funds

    Purpose
    To ensure the guidance provided in TR 93/17 is relevant to contemporary business and industry practices.

    Outcome
    Addendum to TR 93/17 published on 17 May 2017.
    TR 2013/D7 and IT 2672 were withdrawn on 17 May 2017.

    [3723] Deductions for mining and petroleum exploration

    Purpose
    To outline the ATO view in relation to the tax treatment of mining and petroleum exploration expenditure.

    Outcome
    TR 2017/1 and PCG 2016/17 were published on 22 February 2017.

    [3730] Distribution from foreign companies

    Purpose
    To clarify whether the NANE exemption in Subdivision 768-A of the Income Tax Assessment Act 1997 is available for a foreign equity distribution made to an Australian corporate tax entity in connection with a share buyback or cancellation.

    Outcome
    TR 2017/3 was published on 28 June 2017.

    [3764] Renounceable rights issues for resident and non-resident shareholders

    Purpose
    To determine the tax consequences for shareholders (including resident and non-resident shareholders) who receive a retail premium.

    Outcome
    TR 2017/4 was published on 5 July 2017.

    [3783] Thin capitalisation – arm’s length debt test

    Purpose
    To provide administrative guidance for taxpayers in applying the arm’s length debt test under the thin capitalisation rules via adoption of a tax integrity risk framework.

    Outcome
    Existing ATO guidance on this subject is currently under review with a view to development of a holistic suite of guidance products. Once the appropriate products are determined their development will be noted on this Program.

    [3806] Superannuation Guarantee and advances to former employees

    Title
    Final Superannuation Guarantee Determination
    Superannuation guarantee: is an advance paid under section 28 of the Fair Entitlements Guarantee Act 2012 to a former employee 'salary or wages' paid by the employer to the employee for the purposes of working out a superannuation guarantee charge liability under the Superannuation Guarantee (Administration) Act 1992?

    Outcome
    SGD 2017/1 published on 19 April 2017.

    [3808] Internal derivatives by multinational banks

    Purpose
    To extend the Commissioner’s practical approach to applying the arm’s length principles adopted in taxation rulings TR 2001/11 and TR 2005/11 to internal derivatives of multinational banks.
    It sets out the circumstances in which internal derivatives that represent arm’s length dealings can be used as an appropriate proxy for the purposes of allocating or attributing a bank’s income (gains), expenses (losses) or profit for the purposes of Subdivision 815-C of the Income Tax Assessment Act 1997. It also provides guidance on the Commissioner’s compliance expectations for banks seeking to rely on it.

    Outcome
    PCG 2017/8 published on 26 May 2017.

    [3812] Fixed trusts

    Purpose
    Outlines the factors the Commissioner will consider when deciding whether to exercise the discretion in subsection 272-5(3) of Schedule 2F to the Income Tax Assessment Act 1936 to treat an entitlement as being a fixed entitlement, which results in a trust being treated as a fixed trust under the trust loss provisions.

    Outcome
    PCG 2016/16 published on 13 September 2017. See also finalised consultation matter [201747].

    [3813] Non-share dividends paid by Authorised Deposit-taking Institutions

    Purpose
    To assist taxpayers in assessing the extent to which their facts, circumstances and associated tax treatment are perceived by the Commissioner as presenting a risk of non-compliance in relation to the application of paragraphs 215-10(1)(c) and (d) of the Income Tax Assessment Act 1997.

    Outcome
    PCG 2017/10 published on 5 June 2017.

    [3818] Australian consumers

    Purpose
    To provide guidance on whether supplies made by non-residents are to Australian consumers and therefore connected with Australia under paragraph 9-25(5)(d) of the A New Tax System (Goods and Services Tax) Act 1999.

    Outcome
    GSTR 2017/1 published on 7 June 2017.

    [3822] Distributions of net small business income

    Purpose
    To clarify entitlement to the small business income tax offset for a share of net small business income distributed via an interposed entity to an individual.

    Outcome
    This issue has been withdrawn.
    After further review of this issue there is no uncertainty in the law as enacted and as such, a Taxation Ruling is not required. We will confirm the ATO view in an article in the Tax Professionals newsletter in the coming weeks. ATO view is already published on the website at Small business income tax offset: Partnership and trust distributions.

    [3826] Offshore hubs

    Purpose
    To set out our compliance approach to transfer pricing issues related to the location and relocation of certain business activities and operating risks into a centralised operating model.

    Outcome
    PCG 2017/1 was published on 16 January 2017.

    [3827] Superannuation reform

    Purpose
    To provide public advice and guidance to complement the Superannuation Reform package.

    Outcome
    LCG 2016/8 was published on 8 March 2017.

    LCG 2016/9 was published on 10 March 2017.

    LCG 2016/10 was published on 6 April 2017.

    LCG 2016/11 was published on 28 February 2017.

    LCG 2016/12 was published on 20 March 2017.

    PCG 2017/5 was published on 27 April 2017.

    LCG 2017/1 was published on 28 April 2017.

    [3828] GST cross-border supplies – supplies of online advertising

    Purpose
    To explain the Commissioner’s views on when certain types of online advertising are ‘done’ in Australia.

    Outcome
    This issue has been withdrawn as it will now be addressed as part of an addendum to GSTR 2000/31. Refer to GST issue [3870].

    [3850] GST – what is a particular?

    Purpose
    To explain the Commissioner’s views on what is a particular for the purposes of subsection 155-70(1) of Schedule 1 to the Taxation Administration Act 1953 and in relation to amending an assessment of a net amount.

    Outcome
    This issue has been withdrawn.

    After further review, we consider that the ATO view of what is a 'particular' is sufficiently explained in TR 2011/5 at paragraphs 154-171. The principles discussed at these paragraphs, whilst in the context of section 14ZV of the Taxation Administration Act 1953, also apply to amending assessed net fuel amounts.

    [3851] Fuel tax – what is a particular?

    Purpose
    To explain the Commissioner’s views on what is a 'particular' for the purposes of section 155-70 of Schedule 1 to the Taxation Administration Act 1953 and in relation to amending an assessment of a net fuel amount.

    Outcome
    This issue has been withdrawn.

    After further review, we consider that the ATO view of what is a 'particular' is sufficiently explained in TR 2011/5 at paragraphs 154-171. The principles discussed at these paragraphs, whilst in the context of section 14ZV of the Taxation Administration Act 1953, also apply to amending assessed net fuel amounts.

    [3854] GST – supplies of 'things other than goods or real property' done in the indirect tax zone

    Purpose
    To explain the Commissioner’s views on when a supply of 'things other than goods or real property' is done in the indirect tax zone.

    Outcome
    This issue has been withdrawn as it will now be addressed as part of an addendum to GSTR 2000/31. Refer to GST issue [3870].

    [3855] GST – supplies made through an enterprise carried on in the indirect tax zone

    Purpose
    To explain the Commissioner’s views on when a supply is made through an enterprise carried on in the indirect tax zone.

    Outcome
    This issue has been withdrawn as it will now be addressed as part of an addendum to GSTR 2000/31. Refer to GST issue [3870].

    [3856] GST – supplies of a right or option to acquire another thing connected with the indirect tax zone

    Purpose
    To explain the Commissioner’s views on when a supply of a right or option to acquire another thing is connected with the indirect tax zone.

    Outcome
    This issue has been withdrawn as it will now be addressed as part of an addendum to GSTR 2000/31. Refer to GST issue [3870].

    [3869] Supply of credit card – GST-free

    Purpose
    To provide guidance regarding to what extent the supply of a credit card will be a supply made in relation to rights for use outside the indirect tax zone.

    Outcome
    GSTD 2017/1 was published on 12 July 2017.

    [3872] Effective life of depreciating asset

    Purpose
    To outline the methodology used by the Commissioner of Taxation in making a determination of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997. New assets and effective lives have been added to the ruling this year for the following industries:

    • Dairy product manufacturing (cheese, milk powder and yoghurt)
    • Data storage services (data centres)
    • Grain mill product (flour, linseed oil, rice) manufacturing
    • Mining support services
    • Photo processing
    • Poultry processing
    • Pulses and seed processing
    • Textile floor covering manufacturing
    • Wool scouring and carbonisation

    Outcome
    TR 2017/2 was published on 28 June 2017.

    [3873] Division 7A – Unpaid entitlements under sub-trust arrangements

    Purpose
    To provide greater certainty on the consequences where a UPE held on sub trust solely for the benefit of a private company beneficiary and is invested in accordance with Option 1 of the safe harbours in PSLA 2010/4, and that investment is not repaid at the end of the investment term.

    Comments
    PCG 2017/13 was published 19 July 2017. See also finalised consultation matter [201702].

    Last modified: 15 Sep 2017QC 51293