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  • 2021 completed issues

    The following public advice and guidance issues have been completed.

    COVID-19 related guidance – bad debts

    Purpose
    To provide advice about deductions for bad debts during the COVID-19 pandemic

    Outcome
    We have updated our web content to provide general guidance on bad debts which covers all circumstances (including COVID-19). On this basis, we have determined that it is no longer necessary to provide specific COVID-19 related guidance on bad debts.

    COVID-19 related guidance – commercial leasing

    Purpose
    To provide advice regarding the obligations of landlords and tenants where rental concessions are granted as a result of COVID-19.

    Outcome
    Our web guidance Commercial lease payment changes due to COVID-19 published on 12 July 2021.

    [3688] Promoter penalty laws

    Purpose
    This Practice statement provides guidance to ATO staff on the relevant administrative processes when applying the promoter penalty laws in:

    • Division 290 of Schedule 1 to the Taxation Administration Act 1953, and
    • section 68B of the Superannuation Industry (Supervision) Act 1993 dealing with the promotion of illegal early release superannuation schemes.

    Outcome
    Law Administration Practice Statement PS LA 2021/1 Application of the promoter penalty laws published on 8 April 2021.

    [3756] Work-related travel expenses

    Purpose
    This Ruling clarifies when deductions are available for work-related travel expenses.

    Outcome
    Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees’ transport expenses? published on 17 February 2021.

    Purpose
    This Ruling provides the Commissioner's view on when an employee can deduct accommodation and food and drink expenses under section 8-1 of the Income Tax Assessment Act 1997.

    Outcome
    Taxation Ruling TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses travel allowances, and living-away-from-home allowances published on 11 August 2021.

    Purpose
    This Guideline outlines the Commissioner’s compliance approach for determining if employees are travelling on work or living at a location away from their normal residence.

    Outcome
    Practical Compliance Guideline PCG 2021/3 Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location – ATO compliance approach published on 11 August 2021.

    [3768] Personal services income – attribution and deductions

    Purpose
    This draft Ruling proposed to provide a consolidation of TR 2003/6 Income tax: deductions that relate to personal services and TR 2003/10 Income tax: attribution of personal services income.

    Outcome
    After completing our review of this issue, we have reconsidered the need for this Ruling and are exploring whether other products, such as web content, may provide the appropriate guidance on this topic.

    [3777] Receiver’s obligation to retain money in respect of post-appointment tax liabilities

    Purpose
    This Determination sets out the Commissioner's view on a receiver's obligation to retain money in respect of post-appointment tax liabilities.

    Outcome
    Taxation Determination TD 2021/5 Income tax: what is a receiver’s obligation to retain money for post-appointment tax liabilities under section 254 of the Income Tax Assessment Act 1936? published on 19 May 2021.

    [3863] Fringe benefits tax – car parking fringe benefits

    Purpose
    This Ruling updates Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (withdrawn) to reflect contemporary commercial car parking arrangements and legal developments, including the Federal Court decisions in Commissioner of Taxation v. Qantas Airways Ltd [2014] FCAFC 168 and Virgin Blue Airlines Pty Ltd v Commissioner of Taxation [2010] FCAFC 137.

    Outcome
    Taxation Ruling TR 2021/2 Fringe benefits tax: car parking benefits published on 16 June 2021.

    [3929] Research and development – expenditure not at risk

    Purpose
    This Ruling explains the scope and operation of section 355-405 of the Income Tax Assessment Act 1997 which limits claims to research and development (R&D) expenditure that is ‘at risk’. It specifically address the application of the ‘at risk’ requirement to various scenarios where the R&D activities are carried out in the context of commercial contracts for the supply of goods or services. The advice addresses these scenarios, other concerns with the operation of the provisions and brings together existing advice and guidance on these issues.

    Outcome
    Taxation Ruling TR 2021/5 Income tax: research and development tax offsets – the ‘at-risk’ rule published on 22 December 2021.

    [3950] OECD hybrid mismatch rules

    Purpose
    This Ruling provides the Commissioner’s view in relation to the hybrid mismatch targeted integrity rule in Subdivision 832-J of the Income Tax Assessment Act 1997.

    Outcome
    Law Companion Ruling LCR 2021/1 OECD hybrid mismatch rules – targeted integrity rule published on 13 January 2021.

    Purpose
    The Guideline sets out the Commissioner’s compliance approach on the imported mismatch rule in Subdivision 832-H of the Income Tax Assessment Act 1997.

    Outcome
    Practical Compliance Guideline PCG 2021/5 Hybrid mismatch rule – ATO's compliance approach published on 16 December 2021.

    [3968] Small business concessions – active asset test

    Purpose
    This Determination provides advice that a company that carries on a business in a general sense, but whose only activity is renting out an investment property cannot claim the CGT small business concessions.

    Outcome
    Taxation Determination TD 2021/2 Income tax: can a company that carries on a business in a general sense as described in Taxation Ruling TR 2019/1 Income tax: when does a company carry on a business? but whose only activity is renting out an investment property claim the capital gains tax small business concessions in relation to that investment property? published on 24 February 2021.

    [3982] Development lease arrangements in the ACT

    Purpose
    This Determination clarifies our view of the GST outcomes of development lease arrangements in the Australian Capital Territory.

    Outcome
    Goods and Services Tax Determination GSTD 2021/1 Development works in the Australian Capital Territory published on 31 March 2021.

    [3984] Non-arm's length expenditure

    Purpose
    This Ruling provides the Commissioner’s view of amendments in the Treasury Laws Amendment (2018 Superannuation Measures No 1) Act 2019, concerning the application of the non-arm’s length income provisions where a trustee incurs ‘non-arm’s length expenditure’ under a scheme.

    Outcome
    Law Companion Ruling LCR 2021/2 Non-arm's length income – expenditure incurred under a non-arm's length arrangement published on 28 July 2021.

    [3987] Retention of refunds on outstanding notifications

    Purpose
    This Practice statement outlines how the Commissioner will administer the Government’s extension to the Commissioner’s discretion to retain tax refunds in Schedule 4 of the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020.

    Outcome
    Law Administration Practice Statement PS LA 2021/2 The ATO's administrative approach to the extension of the Commissioner's discretion to retain tax refunds published on 22 April 2021.

    [3988] Hybrid instruments – market value

    Purpose
    This Guideline provides a practical compliance approach for determining the market value of certain hybrid securities when they are bought back or redeemed (as relevant) from an investor holding their hybrid securities on capital account.

    Outcome
    Practical Compliance Guideline PCG 2021/1 Application of market value substitution rules when there is a buy-back or redemption of hybrid securities – methodologies for determining market value for investors holding their securities on capital account published on 13 January 2021.

    [3991] Professional firms – allocation of profit guidelines and Everett assignment

    Purpose
    This Guideline explains how the ATO will apply compliance resources when considering the allocation of professional firm profits or income in the assessable income of individual professional practitioners. It will also assist individual practitioners to self-assess their risk against risk assessment factors. This Guideline replaces the professional firm guidelines that were suspended in December 2017.

    Outcome
    Practical Compliance Guideline PCG 2021/4 Allocation of professional firm profits – ATO compliance approach published on 16 December 2021.

    [3994] Disclosure of business tax debts

    Purpose
    This Guidance explains when the Commissioner will consider disclosing the tax debt information of a business to credit-reporting bureaus, including guidance on the law and ATO administrative policies.

    The guidance provides transparency and assurance to the community in respect of the ATO‘s administrative policies and relevant safeguards.

    Outcome
    Our web guidance Disclosure of business tax debts published on 29 November 2021.

    [3997] GST – adjustable beds

    Purpose
    This Determination sets out the Commissioner's view about when an adjustable bed in items 59 and 60 of Schedule 3 to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are GST-free.

    Outcome
    Goods and Services Tax Determination GSTD 2021/2 Goods and services tax: when is the supply of an adjustable bed GST-free under subsection 38-45(1) of the A New Tax System (Goods and Services Tax) Act 1999? published on 8 December 2021.

    [3998] GST – cross-border legislative amendments

    Purpose
    This Addendum to Goods and Services Tax Ruling 2004/7 reflects law change introduced by the Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act 2016 and to align with other recent GST rulings.

    Outcome
    The Addendum to Goods and Services Tax Ruling GSTR 2004/7 Goods and services tax: in the application of items 2 and 3 and paragraph (b) of item 4 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 published on 15 December 2021.

    [3999] Compensation payments made by financial institutions

    Purpose
    Guidance has been prepared to advise:

    • income tax consequences of individuals receiving underpaid credit interest, and
    • withholding and reporting obligations of financial institutions as a consequence of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

    Outcome
    The fact sheet PAYG withholding and reporting obligations relating to remediation payments published on 9 April 2021.

    [4003] Car expenses – reimbursements from employer

    Purpose
    This Determination proposed to provide the Commissioner's view on the implications for an employee who receives a reimbursement for car expenses from their employer, where they are using a car they own or lease, to undertake work-related travel.

    Outcome
    This Determination is not progressing at this time due to the prioritisation of other advice and guidance products.

    [4007] Research and development activities subsidised by JobKeeper payments

    Purpose
    This Determination sets out the Commissioner’s view on how the ‘at risk' rule applies to JobKeeper payments received by a research and development entity.

    Outcome
    Taxation Determination TD 2021/9 Income tax: notional deductions for research and development activities subsidised by JobKeeper payments published on 22 December 2021.

    [4009] Excise Refund Scheme for alcohol manufacturers

    Purpose
    The update to Chapter 7 of the Excise guidelines for the alcohol industry provides a detailed explanation of when an alcohol manufacturer has manufactured an alcoholic beverage, and when alcohol manufacturers are legally and economically independent for the purposes of the excise refund scheme.

    Outcome
    The update to Chapter 7 of the Excise guidelines for the alcohol industry published on 23 December 2021.

    [4010] Fuel tax credits – basic heavy vehicle apportionment method

    Purpose
    This Guideline provides simple formulas which allow small claimants in the transport industry to apportion fuel used (on public roads and for other purposes) and to calculate their fuel tax credit entitlement.

    Outcome
    Practical Compliance Guideline PCG 2021/2 Fuel tax credits – basic heavy vehicle apportionment method published on 5 February 2021.

    [4011] Overtime meal allowance expenses – substantiation exception

    Purpose
    This draft Ruling proposed to provide the Commissioner’s compliance approach regarding the substantiation of overtime meal allowance expenses. The Ruling would have partially replaced Taxation Ruling TR 2004/6.

    Outcome
    This Ruling will not be progressing as the view contained within TR 2004/6 has not changed. New and updated web content will instead be developed to assist clients to meet their requirements.

    [4012] Travel allowance expenses – substantiation exception

    Purpose
    This draft Ruling proposed to provide the Commissioner’s compliance approach regarding the substantiation of travel allowance expenses. The Ruling would have partially replaced Taxation Ruling TR 2004/6.

    Outcome
    This Ruling will not be progressing as the view contained within TR 2004/6 has not changed. New and updated web content will instead be developed to assist clients to meet their requirements.

    [4013] Single Touch Payroll lodgment obligations – due dates and deferrals

    Purpose
    This Practice Statement captures information about lodgment obligations and deferrals in the context of Single Touch Payroll reporting. These updates will incorporate relevant existing ato.gov.au content.

    Outcome
    The update to Law Administration Practice Statement PS LA 2011/15 Lodgment obligations, due dates and deferrals published on 26 August 2021.

    [4016] Residual value of a leased asset – meaning of ‘term of lease’

    Purpose
    The Addendum to Taxation Determination TD 93/142 clarifies the operation of the tables in this Determination, which are used to calculate the minimum residual value of a leased asset, such as a car.

    Outcome
    The Addendum to Taxation Determination TD 93/142 Income tax: in calculating the residual value of a leased item, may a lower residual value than those outlined in IT 28 be adopted in light of the more generous depreciation rates? published on 14 July 2021.

    [4017] Corporate loss carry back tax offset – loss carry back choice

    Purpose
    This draft Determination proposed to set out the Commissioner’s preliminary view on the application of the loss carry back choice, and whether a choice can be revisited after it has been made.

    Outcome
    Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 proposes to allow a loss carry back choice to be amended. We have decided that further guidance is not required on this topic based on the proposed amendment and the topic is now withdrawn.

    [4019] Fuel tax credits – public roads

    Purpose
    This draft Determination proposed to set out the Commissioner’s view on what is a public road for fuel tax credit purposes.

    Outcome
    On further reflection, we consider this draft Determination is no longer required, noting guidance on public roads is addressed in Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge. We are exploring whether other products, such as web content, may provide the appropriate guidance on this topic to complement the existing guidance in FTR 2008/1.

    [4020] Aggregated turnover issues for large business

    Purpose
    The Determination sets out the Commissioner’s view on how the aggregation rules apply where a connected entity or affiliate has a different accounting period to the entity calculating its aggregated turnover.

    Outcome
    Taxation Determination TD 2021/7 Income tax: aggregated turnover – calculating the annual turnover of a connected entity or affiliate with a different accounting period to you published on 13 October 2021.

    [4022] Temporary full expensing

    Purpose
    This Ruling complements existing ato.gov content with more detailed guidance on the application of the temporary full expensing rules. It addresses specific issues raised from external stakeholders since introduction of the measure, including how the temporary full expensing rules interact with the Instant Asset Write-Off and Backing Business Investment provisions, as well as consolidation interaction issues.

    Outcome
    Law Companion Ruling LCR 2021/3 Temporary full expensing published on 22 December 2021.

    [4024] Early engagement service

    Purpose
    The Federal Budget announced a new ATO early engagement service to encourage and support new business investments into Australia. This service offering commenced on 1 July 2021.

    Outcome
    We have introduced a New Investment Engagement Service which provides details about the new program, including its scope and eligibility requirements. This web guidance was published on 28 June 2021.

    [4025] Super guarantee – Part 7 penalties

    Purpose
    This Practice Statement outlines the Commissioner’s revised approach in relation to the remission of additional super guarantee charge imposed under Part 7 of the Superannuation Guarantee (Administration) Act 1992.

    Outcome
    Law Administration Practice Statement PS LA 2021/3 Remission of additional superannuation guarantee charge published on 25 November 2021.

    [4031] Treatment of COVID-19 vaccination incentives

    Purpose
    This Fact Sheet outlines the FBT, PAYG withholding and superannuation guarantee treatment for employers for incentives and rewards they provide to employees who receive COVID-19 vaccinations. It also outlines the income tax treatment for employees.

    Outcome
    The fact sheet COVID-19 vaccination incentives and rewards – your tax and super obligations published on 9 December 2021.

    Last modified: 04 Apr 2022QC 64677