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  • 2018 completed issues

    The following public advice and guidance issues have been completed.

    [3766] Transfer pricing benefit from an outbound/inbound interest free loan

    Purpose
    To provide the Commissioner’s view on whether interest free loans will be considered to be an equity contribution when identifying the actual and arm’s length conditions.

    Outcome

    As a result of internal feedback the subject of this draft taxation determination will be combined into the taxation determination at reference [3765] transfer pricing rules and debt/equity tests.

    [3821] Thin capitalisation: attribution of ADI equity capital and Controlled Foreign Entity equity

    Purpose
    To outline an approach in determining the amount of ADI equity capital and controlled foreign equity attributed by outbound investing entities.

    Outcome
    PCG 2018/1 published on 24 January 2018.

    [3829] Low value goods

    Purpose
    To explain when a supply of low value imported goods will be connected with Australia.

    Outcome
    LCR 2018/1 published on 7 March 2018.

    Purpose
    To explain the Electronic Distribution Platform (EDP) rules and when an operator of an EDP will be responsible for GST on a supply of offshore low value goods made through their platform.

    Outcome
    LCR 2018/2 published on 7 March 2018.

    Purpose
    Provides guidance on when an entity is a redeliverer and when they will be responsible for GST on an offshore supply of low value goods.

    Outcome
    LCR 2018/3 published on 7 March 2018.

    [3894] Long term construction contracts

    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.

    Outcome

    TR 2018/3 published on 7 March 2018

    [3895] Expenditure incurred in relation to abandonment, decommissioning and rehabilitation activities

    Purpose
    To set out whether abandonment, decommissioning and rehabilitation expenditure incurred on a part of a petroleum project prior to a project being completely closed down is characterised as general project expenditure (under section 38) or closing down expenditure (under section 39) of the Petroleum Resource Rent Tax Assessment Act 1987.

    Outcome
    TR 2018/1 published on 24 January 2018.

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

    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.

    Outcome

    The final compliance appendix in TR 2002/14 published on 7 March 2018.

    Last modified: 20 Apr 2018QC 54468