The following key Taxation Rulings, Taxation Determinations, Interpretative Decisions and Law Companion Guides have recently been released.
Indirect tax zones
Draft Goods and Services Tax ruling 2017/D1 and 2017/D2 discusses when supplies of goods are connected with Australia under subsections 9-25(1), (2) and (3) of A New Tax System (Goods and Services Tax) Act 1999 and when a supply of real property is connected with the indirect tax zone under subsection 9-25(4) of the A New Tax System (Goods and Services Tax) Act 1999 respectively.
Trust vesting
Draft Taxation ruling 2017/D10 explains the Commissioner’s views about amending the trust’s vesting date and the income tax consequences of the passing of a trust vesting date.
Foreign trusts and residency
Taxation Determination 2017/23 and 2017/24 states that the residency assumption in subsection 95(1) of the Income Tax Assessment Act 1936 does not apply for the purpose of section 855-10 of the Income Tax Assessment Act 1997 which disregards certain capital gains of a trust which is a foreign trust for CGT purposes. Further an amount included in a beneficiary’s assessable income under subsection 99B (1) of the Income Tax Assessment Act 1936 which had its origins in a capital gain from non-taxable Australian property of a foreign trust, the beneficiary cannot offset capital losses or a carry-forward net capital loss (‘capital loss offset’) or access the CGT discount in relation to the amount.
Interest deductibility
Draft Taxation determination 2017/D4 details the deductibility of interest expenses incurred by a beneficiary of a discretionary trust on borrowings on-lent interest free to the trustee.
Cross-border related party financing arrangments
Practical Compliance Guideline 2017/4 discusses the ATOs compliance approach to taxation issues associated with cross-border related party financing arrangements and related transactions.
Exempt car and residual benefits
Practical Compliance Guideline 2017/D14 discusses the compliance approach to determining private use of vehicles.
Multi-client seismic data
Draft Taxation ruling 2017/D11 considers how the capital allowance provisions in Division 40 of the Income Tax Assessment Act 1997 apply to the expenditure incurred by a service provider in collecting and processing seismic data licensed on a non-exclusive basis to multiple clients.
Employee share schemes
Taxation determination 2017/26 sets out when a dividend equivalent payment is assessable as remuneration, and therefore ordinary income, under section 6-5 of the Income Tax Assessment Act 1997 to an employee as an Australian resident participant of an employee share scheme and beneficiary of a trust.
Practical Compliance Guideline 2017/D9W sets out the safe harbour terms on which the Commissioner will accept, for income tax purposes, that a dividend equivalent payment made to an employee participant of an employee share scheme is not connected with the employee’s employment and will not be assessable to the employee under section 6-5 of the Income Tax Assessment Act 1997.
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