Full details of all the items listed below are available on the Australian Tax Database
General tax news
Corporations law tax changes - The ATO has advised that taxpayers should be prepared for a start date of 1 July 1998 for the tax law changes related to the Corporations Law amendments. The legislation will be debated in the Senate this week.
Companies which have a "share premium account" which does not meet the definition under s6(1) may find themselves with a "tainted share capital account" when the amendments to the Corporations Law and associated tax changes take effect.
Taxi licence is not goodwill - The High Court has held that a taxi licence is not goodwill, and accordingly, the 50% goodwill exemption under s160ZZR was not available to reduce the capital gain on the sale of the licence (FC of T v Murry).
Steele granted leave to appeal to High Court - The High Court has granted the taxpayer special leave to appeal against the Full Federal Court's decision in Steele v FCT 97 ATC 4239. The Full Federal Court denied the taxpayer a deduction for interest expense on certain loans because the interest expense was considered to be an outgoing of capital or of a capital nature.
ASC warns tax scheme promoters to submit supplementary prospectuses - The Australian Securities Commission has warned promoters of tax driven schemes that they may need to submit a supplementary prospectus as soon as practicable.
Transfer pricing - The Tax Office was ordered to reveal documents relevant to a determination under the transfer pricing provisions (San Remo Macaroni Co Pty Ltd v FC of T).
Tax Agent failed to take reasonable care - The Small Taxation Claims Tribunal found that six taxpayers, all represented by the same tax agent, failed to take reasonable care when payments on termination of employment with the same employer were incorrectly included in their tax returns as tax-free bona fide redundancy payments, contrary to the information on group certificates which correctly categorised the payments as being for unused annual and long service leave (Arnett & Ors v FCT).
Payment for personal injury was not an ETP - The Full Federal Court held that a payment made by a superannuation fund to a taxpayer was made in respect of personal injury of the taxpayer and, as such, was not assessable as an eligible termination payment. The Full Federal Court ruled that the words "in respect of personal injury" are to be given a meaning which extends beyond what would otherwise be included in the expression "for personal injury" (Scully v FC of T).
Report of member contributions by superannuation providers - The ATO has announced that the notification date for reporting by superannuation providers of member contributions received during the 1998 financial year has been extended from 31 October to 15 December.
Unexpected CGT from share trusts - According to a report in the Sydney Morning Herald, investors in some international share trusts could have unexpectedly high CGT liabilities for the year ended 30 June 1997, due to gains made in US and European stock markets
TaxPack 98 released - The Tax Office has started distributing TaxPack 98 for individuals who lodge tax returns without taxpayer assistance. The publication has been split into a main TaxPack and a Supplement. The main TaxPack includes the more common income, deduction and rebate information, while the less commonly asked questions are in the Supplement.
Franking credit trading legislation - expected on 24 June 1998 -The proposed franking credit trading rules (45 day holding period) are likely to be introduced into Parliament on 24 June 1998 (presumably in TLAB (No 5)1998). It is expected that the formula based benchmark approach will be widely available to most industries, with the ATO having the option to exclude particular taxpayers who they believe are inappropriately exploiting the concession.
Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Bill 1998 - is expected to be debated in the House of Representatives in the week commencing 22 June 1998.
The following issued during last week -
- TD98/D6 which outlines the income tax and fringe benefits tax consequences of what are the taxation consequences of certain motor vehicle lease novation arrangements known as partial novations.
- TR 98/9 which outlines the income tax consequences of the deductibility of self-education expenses.
- Streamlined Sales Tax Ruling SST 11 which is a guide to the classification of goods for sales tax purposes.
International Tax News Highlights
Tax sparing - Australia and Vietnam - Government response - Details of the Government's response to the Seventh Report of the Joint Standing Committee on Treaties in relation the exclusion of accounting and audit services from tax sparing incentives in the 1992 Double Taxation Agreement between Australia and Vietnam are available on request.
For further information, contact:
Michael Croker Coopers & Lybrand Tower 580 George Street Sydney 2000 Australia Tel No: +61 29 28 57 777 Fax No: +61 29 26 18 777 E-mail: Click Contact Link
Visit the PricewaterhouseCoopers in Australia website at Click Contact Link