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  • 2018 completed issues

    The following public advice and guidance issues have been completed.

    [3599] Employee remuneration trust arrangements

    Purpose
    To provide advice on how the taxation laws apply to an employee remuneration trust arrangement.

    Outcome
    TR 2018/7 published on 31 October 2018.

    [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.

    [3780] Trust vesting

    Purpose
    To provide the Commissioner's view of the trust law and tax law consequences of various issues concerning the vesting of a trust.

    Outcome
    TR 2018/6 published on 15 August 2018.

    [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.

    [3830] Commercial transactions – payments or loans made by private companies to an interposed entity

    Purpose
    To reflect the views in ATO ID 2011/104.

    Outcome
    TD 2018/13 published on 18 July 2018.

    [3832] Diverted profits tax

    Purpose
    To provide the Commissioner's view on some of the new concepts that have been introduced by the new law.

    Outcome
    LCR 2018/6 and PCG 2018/5 published on 26 September 2018.

    [3838] Corporate residency – central management and control in Australia

    Purpose
    To provide the ATO’s view on ‘central management and control in Australia’ for the purposes of paragraph (b) of the definition of ‘resident’ or ‘resident of Australia’ in subsection 6(1) of the Income Tax Assessment Act 1936.

    Outcome
    TR 2018/5 published on 21 June 2018.

    [3849] Deductibility of interest expenses incurred – beneficiaries of discretionary trusts

    Purpose
    To confirm our view about when the beneficiary of a discretionary trust can deduct interest expenses incurred in relation to amounts borrowed and on-lent to the trustee

    Outcome
    TD 2018/9 published on 20 June 2018.

    [3852] GST – supplies connected with the indirect tax zone (goods)

    Purpose
    To provide the Commissioner's views on when a supply of goods will be connected with the indirect tax zone.

    Outcome
    GSTR 2018/2 published on 19 September 2018.

    [3853] GST – supplies of real property connected with the indirect tax zone

    Purpose
    To provide the Commissioner's views on when a supply of real property will be connected with the indirect tax zone.

    Outcome
    GSTR 2018/1 published on 22 August 2018.

    [3857] Treatment of payments for use of an individual's 'public fame' or 'image'

    Purpose
    To provide a 'safe harbour' for apportioning single payments for, in combination, the provision of a professional sportsperson's services and the use or exploitation of their 'public fame' or 'image' under licence.

    Outcome
    PCG 2017/D11 was withdrawn on 24 August 2018 and will not be finalised. Details of the ATO's approach to arrangements is outlined on the withdrawn draft Guideline.

    [3865] MAAL – directly in connection with supply

    Purpose
    To provide guidance on when activities undertaken in Australia will be 'directly in connection with' a supply by a foreign entity under the Multinational Anti-Avoidance Law.

    Outcome
    TD 2018/12 published on 4 July 2018.

    [3874] Propagation arrangements adopted by registrable superannuation entities

    Purpose
    To set out the ATO’s compliance approach to the use of propagation arrangements used by registrable superannuation entities when selecting assets for disposal. It applies from 1 July 2018 and clarifies the ATO’s approach to these types of arrangements for the large superannuation industry. This Guidance does not apply to self-managed superannuation funds.

    Outcome
    PCG 2018/2 published on 30 May 2018.

    [3875] Deceased estate

    Purpose
    To provide certainty to Legal Personal Representatives of smaller deceased estates when making distributions to beneficiaries in regard to later tax claims on the estate that could make them personally liable. The Guideline gives the representatives an understanding of what they can do to ensure that the Commissioner will not seek to obtain estate taxation liability amounts of the estate from the representative after they have distributed estate assets.

    Outcome
    PCG 2018/4 published on 22 August 2018.

    [3876] Nexus for determining whether a depreciating asset is first used for exploration or prospecting

    Purpose
    To outline the relevant nexus for determining a depreciating asset is first used for exploration or prospecting for the purpose of section 40-80 of the Income Tax Assessment Act 1997.

    Outcome
    TD 2018/D2 published on 13 June 2018. This draft taxation determination is being finalised under item [3877].

    [3880] Operation of the system

    Purpose
    To update WETR 2009/1 following legislative amendments receiving royal assent on 23 August 2017.

    Outcome
    Addendum to WETR 2009/1 published on 29 June 2018.

    [3881] Operation of the producer rebate

    Purpose
    To update WETR 2009/2 following legislative amendments receiving royal assent on 23 August 2017.

    Outcome
    Addendum to WETR 2009/2 published on 29 June 2018.

    [3882] Operation of the producer rebate for New Zealand entities

    Purpose
    To update WETR 2006/1 following legislative amendments receiving royal assent on 23 August 2017.

    Outcome
    Addendum to WETR 2006/1 published on 29 June 2018.

    [3894] Long term construction contracts

    Purpose

    To refresh IT 2450 Income tax: recognition of income from long term construction contracts (published in 1987) and consolidate five related taxation determinations. A new accounting standard (AASB 15 Revenue from contracts with customers, which takes compulsory effect from 1 January 2018) is now referenced, and the and the content expanded to cover the treatment of both income and deductions in respect of long term construction contracts. The 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.

    [3897] Exempt car benefits and exempt residual benefits – compliance approach to determining private use of vehicles

    Purpose
    To provide a practical approach for employers in demonstrating that the private use of eligible vehicles provided to their employees during an FBT year meet the car related exemptions of work related travel or other private use that is 'minor, infrequent and irregular'.

    Outcome
    PCG 2018/3 published on 11 July 2018.

    [3902] Offshore hubs – non-core procurement

    Purpose
    To set out the ATO's risk assessment framework, including the low risk benchmark for offshore procurement hubs that supply 'direct' or 'non-core' goods or services.

    Outcome
    Schedule 2 to PCG 2017/1 published on 11 October 2018.

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

    Purpose
    To 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.

    Outcome
    LCR 2018/7 published on 10 October 2018.

    [3916] GST – GST at settlement

    Purpose
    To explain new provisions that require a purchaser of certain types of real property to make a payment to the Commissioner that represents the GST payable by the vendor.

    Outcome
    LCR 2018/4 published on 27 June 2018.

    [3921] Effective life review of assets

    Purpose
    To add new effective life determinations to the Commissioner’s Schedule for the assets used in the following industries:

    • butter manufacturing
    • gas, oil and mining support services (excluding offshore services)
    • fruit and vegetable processing
    • ice cream manufacturing
    • scientific testing and analysis services
    • spirit manufacturing.

    Outcome
    TR 2018/4 published on 27 June 2018.

    [3923] Contributing the proceeds of downsizing to superannuation

    Purpose
    Contributing the proceeds of downsizing to superannuation measure is part of the Australian Government’s broader housing affordability package to reduce pressure on housing affordability in Australia. The final Ruling provides advice on how the measure will apply and clarify new concepts introduced by the measure.

    Outcome
    LCR 2018/9 published on 7 November 2018.

    [3924] First home super saver scheme

    Purpose
    To provide advice on how the first home super saver scheme measure will apply and clarify new concepts introduced by the measure.

    Outcome
    LCR 2018/5 published on 15 August 2018.

    [3927] Part IVA of the Income Tax Assessment Act 1936 and restructures of hybrid mismatch arrangements

    Purpose
    To provide administrative guidance on the application of Australia’s general anti avoidance rules (Part IVA) to restructuring and unwinding of arrangements undertaken in response to the introduction of  Division 832 of the Income Tax Assessment Act 1997 and associated legislative amendments (the hybrid mismatch rules).

    Outcome
    PCG 2018/7 published on 25 October 2018.

    [3931] GST – inbound tour operators

    Purpose
    To outline the circumstances for when the Commissioner will not apply compliance resources to examine whether or not an inbound tour operator is acting as an agent for its non-resident clients.

    Outcome
    PCG 2018/6 published on 10 October 2018.

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

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

    Outcome
    LCR 2018/8 published on 31 October 2018.

    [3935] Enterprise tax plan

    Purpose
    To 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.

    Outcome
    PCG 2018/8 published on 6 December 2018.

    [3945] Government grants

    Purpose
    To provide greater clarity to our existing view, including by the insertion of further examples of government payments made.

    Outcome
    Addendum to TR 2006/3 published on 14 November 2018.

    [3948] Sole purpose test

    Purpose
    This Decision impact statement explains our view following the Federal Court decision in Aussiegolfa Pty Ltd (Trustee) v. Federal Commissioner of Taxation, in particular the sole purpose test.

    Outcome
    The Decision impact statement on Aussiegolfa published on 3 December 2018.

    Last modified: 05 Dec 2018QC 54468