The following public advice and guidance issues have been completed.
[3702] Capital allowances – composite items
Purpose
This Ruling addresses the issue of whether an asset that is made up of a number of parts or components (that is, the composite item) is itself a depreciating asset, or whether one or more of its components are separate depreciating assets.
Outcome
Taxation Ruling TR 2024/1 Income tax: composite items – identifying the relevant depreciating asset for capital allowances published on 31 January 2024.
[3708] Forex realisation event 4
Purpose
An updated draft Determination was originally proposed to clarify whether forex realisation event 4 happens on the repayment of a loan obligation incurred prior to the effective date of an applicable functional currency choice and denominated in the same non-Australian dollar currency that later becomes the applicable functional currency.
Outcome
After consideration of this issue, on 26 June 2024 we amended the withdrawal notice dated 8 October 2014 for Draft Taxation Determination TD 2014/D10 Income tax: does forex realisation event 4 happen to the debtor under subsection 775-55(1) of the Income Tax Assessment Act 1997 on repayment of a loan taken out prior to the effective date of a choice to use the applicable functional currency and denominated in the same non-AUD currency that later becomes the applicable functional currency?.
We will apply the view that forex realisation event 4 happens in the circumstances outlined in former TD 2014/D10 to gains and losses where the applicable functional currency election is made on or after 12 June 2024.
[3718] Corporate limited partnership ‘credits’
Purpose
This Ruling clarifies when a corporate limited partnership 'credits' an amount to one of its partners within the meaning of section 94M of the Income Tax Assessment Act 1936.
Outcome
Taxation Ruling TR 2024/2 Income tax: when does a corporate limited partnership ‘credit’ an amount to a partner in that partnership? published on 21 February 2024.
[3869] Time limits on entitlements to tax credits
Purpose
This Ruling sets out the Commissioner's views on when entitlements to an input tax credit or fuel tax credit do not cease.
Outcome
Miscellaneous Taxation Ruling MT 2024/1 Miscellaneous tax: time limits for claiming an input tax or fuel tax credit published on 4 December 2024.
[3887] Infrastructure privatisation framework
Purpose
This guidance outlines the ATO’s position on the taxation of social infrastructure Public Private Partnerships (PPPs).
Outcome
Taxation of PPPs for social infrastructure projects was published on 10 April 2024.
[3899] Division 7A – undue hardship – corporate trustees
Purpose
This guidance outlines 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.
Outcome
Debt forgiveness by private companies was published on 30 May 2024.
[3938] Superannuation income stream
Purpose
Taxation Ruling TR 2013/5 Income tax: when a superannuation income stream commences and ceases was impacted by the legislative amendments flowing from the 2016 Budget announcement of the transfer balance cap, which limits the superannuation interests that a person can have in retirement phase. This Addendum updated the legislative references in the Ruling as a result of these amendments, as well as addressing other amendments, including to the definition of a superannuation income stream benefit.
Outcome
The addendum to TR 2013/5 published on 26 June 2024.
[3950] OECD hybrid mismatch rules
Purpose
This guidance addresses the Commissioner’s view on key aspects of the ‘subject to foreign income tax’ definition, with particular focus on treatment of intra-group payments between members of the same US consolidated group.
Outcome
Hybrid mismatch rules, which explains how the hybrid mismatch rules work and when they apply, published on 25 January 2024.
[4006] Intangibles arrangements
Purpose
The Guideline sets out the ATO's compliance approach to international arrangements connected with the development, enhancement, maintenance, protection and exploitation of intangible assets; specifically, the potential application of the transfer pricing, general anti-avoidance rule and the diverted profits tax provisions.
Outcome
Practical Compliance Guideline PCG 2024/1 Intangibles migration arrangements published on 24 January 2024.
[4015] Supply of burial rights by a government agency
Purpose
This Determination sets out the Commissioner's view on the GST consequences where an Australian Government agency supplies a right of burial in respect of a public cemetery.
Outcome
Goods and Services Tax Determination GSTD 2024/2 Goods and services tax: is the supply of a burial right in respect of a public cemetery subject to GST? published on 4 December 2024.
[4030] Water rights
Purpose
The draft Determination intended to clarify whether certain CGT assets, such as water access entitlements, are ‘taxable Australian real property’ in order to provide certainty to foreign residents on whether a capital gain or loss from a CGT event that happens in relation to interests in water access entitlements is disregarded.
Outcome
This draft Determination was removed from the Advice under development program in September 2024. Following the Budget measure announced on 14 May 2024 to make amendments to the foreign resident capital gains tax regime, on 23 July 2024 Treasury issued a consultation paper titled Strengthening the foreign resident capital gains tax regimeExternal Link for public comment. Work on this draft Determination has ceased and the need for public advice and guidance on this issue will be assessed as part of public advice and guidance plans for amendments related to the Budget measure.
[4042] Ordinary meaning of the term 'employee' [new]
Purpose
We reviewed several products that provided guidance on the meaning of the term ‘employee’ to reflect the direction provided in the High Court decision in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1.
For more information, see the Decision impact statement on Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1.
Outcome
Practical Compliance Guideline PCG 2023/2 Classifying workers as employees or independent contractors – ATO compliance approach published on 6 December 2023.
The addendum to Taxation Ruling TR 2023/4 Income tax: pay as you go withholding – who is an employee? published on 11 December 2024.
[4043] Suspected external fraud [new]
Purpose
The Practice statement outlines when the Commissioner can remediate suspected fraud undertaken by unconnected third parties.
Outcome
Law Administration Practice Statement PS LA 2024/1 Suspected fraud involving unconnected third parties was published on 12 December 2024.
[4054] Fringe benefits tax and electric vehicles
Purpose
This Guideline considers both fringe benefits tax and income tax issues and provides a methodology to enable users of electric vehicles to determine an approximate cost for the electricity when charging an electric vehicle at home.
Outcome
Final Practical Compliance Guideline PCG 2024/2 Electric vehicle home-charging rate: calculating electricity costs when charging a zero or low emissions vehicle at an employee's or individual's home published on 1 February 2024.
[4055] Financial advice fees
Purpose
This Determination sets out the Commissioner's 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 broadens and updates Taxation Determination TD 95/60 Income tax: are fees paid for obtaining investment advice an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for taxpayers who are not carrying on an investment business?
Outcome
Final Taxation Determination TD 2024/7 Income tax: deductions for financial advice fees paid by individuals who are not carrying on an investment business published on 25 September 2024.
[4057] Deductibility of self-education expenses
Purpose
This Ruling provides an update of Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business (withdrawn) 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 also includes content from Taxation Ruling TR 92/8 Income tax: deductibility of self-education expenses (withdrawn) regarding why certain legs of travel are or are not deductible.
Outcome
Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual published on 21 February 2024.
[4060] ATM fees and credit, debit and prepaid card surcharges
Purpose
The addenda to Goods and Services Tax Rulings GSTR 2014/2 Goods and services tax: treatment of ATM service fees, credit card surcharges and debit card surcharges and GSTR 2002/2 Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions outline the ATO’s position on the meaning of ‘ATM’ and ‘ATM Services’ following the decision in Banktech Group Pty Ltd v Commissioner of Taxation [2023] AATA 3850.
Outcome
The addenda to GSTR 2014/2 and GSTR 2002/2 published on 20 November 2024.
[4063] Determining the amount of statutory income that is non-arm’s length income
Purpose
Subsection 295–550(1) of the Income Tax Assessment Act 1997 (ITAA 1997) refers to ‘an amount of ordinary or statutory income’ that is non-arm's length income (NALI) as a result of a scheme in which the parties were not dealing with each other at arm's length in relation to the scheme.
Statutory income includes the net capital gain as calculated using the method statement in subsection 102–5(1) of the ITAA 1997 (including the application of capital losses, discount percentage and small business concessions) and, as such, is relevant in calculating:
- statutory income for the purposes of subsection 295–550(1) of the ITAA 1997, and
- tax payable by superannuation funds, approved deposit funds and pooled superannuation trusts using the method statement in subsection 295–10(1) of the ITAA 1997.
This final Determination addresses how these provisions interact to determine the amount of statutory income that is NALI where a capital gain arises as a result of non-arm’s length dealings.
Outcome
Taxation Determination TD 2024/5 Income tax: how the non-arm's length income and capital gains tax provisions interact to determine the amount of statutory income that is non-arm's length income published on 17 July 2024.
[4065] Liability of a legal personal representative of a deceased person
Purpose
This Guideline has been updated to provide improved certainty for legal personal representatives when finalising less complex estates.
Outcome
An update to Practical Compliance Guideline PCG 2018/4 Income tax – liability of a legal personal representative of a deceased person was published on 10 April 2024.
[4081] Corporate collective investment vehicles
Purpose
This Ruling represents the Commissioner’s view on the operation of the corporate collective investment vehicle regime and supports its introduction.
Outcome
Final Law Companion Ruling LCR 2024/1 The corporate collective investment vehicle regime published on 2 October 2024.
[4087] Resident trust beneficiaries and income from foreign trusts
Purpose
The Practical Compliance Guideline provides taxpayers with:
- guidance on common scenarios where section 99B of the Income Tax Assessment Act 1936 (ITAA 1936) should be considered
- practical guidance about record-keeping, and
- information about when the Commissioner will apply compliance resources to review the application of section 99B of the ITAA 1936 to distributions from non-resident trusts to beneficiaries.
The Determination addresses the hypothetical resident taxpayer tests in paragraphs 99B(2)(a) and (b) of the ITAA 1936.
Outcome
Practical Compliance Guideline PCG 2024/3 Section 99B of the Income Tax Assessment Act 1936 – ATO compliance approach and Taxation Determination TD 2024/9 Income tax: factors taken into account applying paragraphs 99B(2)(a) and (b) of the Income Tax Assessment Act 1936 published on 27 November 2024.
[4096] Supplies of combination food
Purpose
The Determination provides the Commissioner’s view on the meaning of 'food that is a combination of one or more foods’ for the purposes of paragraph 38-3(1)(c) of A New Tax System (Goods and Services Tax) Act 1999 following the Administrative Appeals Tribunal decision in Chobani Pty Ltd and Commissioner of Taxation [2023] AATA 1664.
Outcome
Goods and Services Tax Determination GSTD 2024/1 Supplies of combination food published on 28 February 2024.
[4100] Deductibility of settlement payment
Purpose
This Decision impact statement outlines the ATO’s response to the Federal Court decision on Commissioner of Taxation v Wood [2023] FCA 574 which concerned whether a payment made by the taxpayer to settle litigation after his relevant employment ended was deductible under section 8-1 of the Income Tax Assessment Act 1997.
Outcome
The Decision impact statement on Commissioner of Taxation v Wood was published on 21 February 2024 and no further updates will be made.
[4109] First home super saver scheme
Purpose
The Treasury Laws Amendment (2023 Measures No. 3) Act 2023 amends the law from 15 September 2024 to improve the flexibility and operation of the first home super saver (FHSS) scheme. The final Taxation Ruling and Super Guidance Note outline the operation of the FHSS scheme as amended. Law Companion Ruling LCR 2018/5 First home super saver scheme and Super Guidance Note GN 2018/1 First home super saver scheme have been withdrawn.
Outcome
Taxation Ruling TR 2024/4 First home super saver scheme and Superannuation Guidance Note GN 2024/1 First home super saver scheme published on 16 September 2024.
[4110] Trustee risk reserve expenses
Purpose
This Determination sets out the Commissioner’s view on the deductibility for the superannuation fund, under section 8-1 of the Income Tax Assessment Act 1997, of payments made by the trustee of the fund (in its capacity as trustee) to the trustee in its own capacity to address the trustee’s risk of exposure arising from amendments to section 56 of the Superannuation Industry (Supervision) Act 1993. The amendments were effective from 1 January 2022 and expanded the range of penalties that could be incurred by a trustee for which they can no longer use trust assets to pay.
Outcome
Taxation Determination TD 2024/6 Income tax: trustee risk reserves – deductibility of payments made by a superannuation fund to its trustee published on 24 July 2024.
[4114] Application of non-arm's length provisions
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal's decision in BPFN and Commissioner of Taxation [2023] AATA 2330, which was about whether the non-arm’s length income provision in subsection 295-550(5) of the Income Tax Assessment Act 1997 applied to distributions made to a self-managed superannuation fund.
Outcome
The Decision impact statement on BPFN and Commissioner of Taxation published on 10 April 2024 and no further updates will be made.
[4116] Thin capitalisation
Purpose
On 8 April 2024, the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024 received Royal Assent. Schedule 2 of that Act amends the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 to update Australia’s thin capitalisation rules.
Outcome
The updated Thin capitalisation guide published on 24 July 2024 reflects these amendments. The new content incorporates changes to entity classification and the introduction of 3 new thin capitalisation tests.
[4119] Victorian Taxi Reform Fairness Fund Payments
Purpose
The Decision impact statement on Bains and Commissioner of Taxation [2023] AATA 2477 outlined the ATO's response to the Administrative Appeals Tribunal's decision that a payment received by a Victorian taxi licence holder from the Victorian Taxi Reform Fairness Fund is not income according to ordinary concepts.
Outcome
Taxi licence holders – payments and levies has been updated to provide current advice on tax obligations for taxi industry assistance payments.
[4125] Frozen foods marketed as prepared meals
Purpose
The Decision impact statement outlines the ATO’s response to the Federal Court decision on Simplot Australia Pty Limited v Commissioner of Taxation [2023] FCA 1115, which concerned whether 6 frozen food products were of a kind 'marketed as a prepared meal' and therefore taxable under paragraph 38-3(c) of the A New Tax System (Goods and Services Tax) Act 1999.
Outcome
The Decision impact statement on Simplot Australia Pty Limited v Commissioner of Taxation published on 8 November 2023 and no further updates will be made. Work continues on reviewing impacted advice and guidance outlined in the Decision impact statement.
[4131] Application of the promoter penalty laws
Purpose
This Practice Statement provides guidance on the application of Division 290 of Schedule 1 to the Taxation Administration Act 1953 (promoter penalty laws). The ATO updated this Practice Statement and our website content to reflect the amendments to the promoter penalty laws that came into effect on 1 July 2024.
Among other things, the legislative amendments:
- expand the scope of schemes to which the promoter penalty laws will apply
- increase the maximum penalties for contraventions, and
- change the definition of when a person will be a ‘promoter’ of a ‘tax exploitation scheme’.
Outcome
The updated Law Administration Practice Statement PS LA 2021/1 Application of the promoter penalty laws published on 21 August 2024.
[4138] Sale of residential premises – profit-making purpose
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal decision in Bowerman and Commissioner of Taxation [2023] AATA 3547, which concerned the deductibility under section 8-1 of the Income Tax Assessment Act 1997 of a loss incurred by an individual on the sale of her home which she acquired with the purpose of making a profit in a commercial manner.
Outcome
The Decision impact statement on Bowerman and Commissioner of Taxation published on 13 March 2024 and no further updates will be made.
[4139] Decisions made by the Commissioner in the general administration of taxation laws
Purpose
This Practice Statement explains the purpose, nature and scope of the Commissioner’s general administration of the taxation laws. It also contains guidance about the escalation of general administration decisions to the Commissioner.
This Practice Statement improves how key concepts are explained in it to focus the guidance on the making of general administration decisions that are most commonly about the allocation of ATO resources. We also clarify the types of general administration decisions that should be escalated to the Commissioner and the process for that escalation.
Outcome
The revised Law Administration Practice Statement PS LA 2009/4 When a proposal requires an exercise of the Commissioner's powers of general administration published on 31 July 2024.
[4144] Inbound related-party financing for private groups in the property and construction industry [new]
Purpose
This guidance helps privately owned and wealthy groups in the property and construction industry comply with their obligations and mitigate tax risks associated with their inbound related-party financing arrangements. It also includes examples of inbound related-party financing arrangements.
Outcome
Inbound related-party financing for private groups in the property and construction industry web guidance published on 10 December 2024.
[4149] OECD hybrid mismatch rules
Purpose
This Determination sets out the Commissioner’s view on certain aspects of the ‘liable entity’ and ‘hybrid payer’ definitions in Division 832 of the Income Tax Assessment Act 1997.
Outcome
Taxation Determination TD 2024/4 Income tax: hybrid mismatch rules – application of certain aspects of the ‘liable entity’ and ‘hybrid payer’ definitions published on 3 July 2024.
[4155] Eligibility of R&D activities and feedstock adjustment
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal's (AAT's) decision in GQHC and Commissioner of Taxation [2024] AATA 409. In this case, the AAT considered:
- whether the Commissioner has the power to assess or make decisions as to whether a research and development (R&D) entity's registered activities consisted of eligible R&D activities as defined in Division 355 of the Income Tax Assessment Act 1997
- the eligibility of GQHC's registered activities, and
- (assuming an R&D tax offset was available) whether expenditure incurred by GQHC in acquiring or producing both day-old broiler chickens and poultry feed given to chickens were feedstock input expenditure which requires a feedstock adjustment.
Outcome
The Decision impact statement on GQHC and Commissioner of Taxation published on 12 April 2024. The comments period closed on 10 May 2024 and no further updates will be made.
[4163] Is a contract lecturer of a higher education provider an employee or an independent contractor?
Purpose
This Decision impact statement outlines the ATO's response to JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76, which concerned whether a contract lecturer of a higher education provider was engaged as an employee or an independent contractor pursuant to:
- the common law meaning of the term 'employee' under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA), or
- the extended meaning of the word contained in subsection 12(3) of that the SGAA
- Under subsection 12(3) of the SGAA, an individual is an employee of an engaging entity where they work under a contract that is wholly or principally for their labour.
Outcome
The Decision impact statement on JMC Pty Ltd and Commissioner of Taxation published on 15 May 2024. The comments period closed on 14 June 2024 and no further updates will be made. Draft Taxation Ruling TR 2023/4DC1 Income tax and superannuation guarantee: who is an employee? published on 26 June 2024 (with the comments period closing 9 August 2024) includes updates related to this decision.
[4164] An individual will be an employee of an engaging entity where they work under a contract that is wholly or principally for their labour
Purpose
This Decision impact statement outlines the ATO's response to Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48, which concerns whether the appellants were employees of the first and second respondents (ZG Operations Australia Pty Ltd and its predecessors) pursuant to subsection 12(3) of the Superannuation Guarantee (Administration) Act 1992. Under subsection 12(3) of that Act, an individual will be an employee of an engaging entity where they work under a contract that is wholly or principally for their labour.
Outcome
The Decision impact statement on Jamsek v ZG Operations Australia Pty Ltd (No 3) published on 15 May 2024. The comments period closed on 14 June 2024 and no further updates will be made. Draft Taxation Ruling TR 2023/4DC1 Income tax and superannuation guarantee: who is an employee? published on 26 June 2024 (with the comments period closing 9 August 2024) includes updates related to this decision.
[4167] Claiming input tax credits and creditable acquisitions when carrying on an enterprise
Purpose
This Decision impact statement outlines the ATO's response to this case, which concerned whether creditable acquisitions were made in carrying on any enterprise and, if so, whether input tax credits can be claimed.
Outcome
The Decision impact statement on Konebada Pty Ltd ATF the William Lewski Family Trust v Commissioner of Taxation was published on 21 August 2024 and no further updates will be made.
[4173] Australian Defence Force redundancy and termination payments
Purpose
This Decision impact statement outlines the ATO's response to this case, which concerned whether the termination payment made to a colonel in the Australian Regular Army was a genuine redundancy payment under section 83-175 of the Income Tax Assessment Act 1997.
Outcome
The Decision impact statement on Fidge and Commissioner of Taxation was published on 21 August 2024 and no further updates will be made.
[4199] Obligations and rights of payers, recipients and the Commissioner where an amount has been withheld
Purpose
Law Administration Practice Statement PS LA 2011/11 Refunds of certain pay as you go withholding amounts has been updated to include information on foreign resident capital gains withholding. It outlines the obligations and rights of payers, recipients and the Commissioner where an amount has been withheld in error, purportedly under the pay as you go withholding system. General information is also provided as to how recipients may obtain a refund of incorrectly withheld amounts.
Outcome
The update to PS LA 2011/11 published on 5 December 2024.