Date posted: 18/11/2022

ATO Draft advice and guidance

List of draft rulings, determinations, legislative instruments, practical compliance guidelines and other items released by the Australian Taxation Office (ATO) since 1 January 2022

Draft guidance released the week ended  November 2022

ABRS 2022/D1 - Draft Corporations (Eligible Officer Exclusion - non-individuals and resigned directors) Determination 2022 l entities that hold a role as a director under the Corporations Act.

ABRS 2022/D2 - Draft Corporations (Aboriginal and Torres Strait Islander) (Eligible Officer Exclusion - resigned directors) Determination 2022

The above instruments will exclude the following classes of persons from being an eligible officer, relieving them of the obligation to apply for a director ID in certain circumstances:

  • Resigned directors - persons who have ceased to hold any role as a 'director or alternate director acting in that capacity' (directors) prior to 1 December 2022 (for directors under the Corporations Act 2001) or 1 December 2023 (for directors under the Corporations (Aboriginal and Torres Strait Islander) Act 2006), and
  • Corporate directors - non-individual entities that hold a role as a director under the Corporations Act.

Comments are due to the ATO by 9 December 2022.

ER 2022/D1 - Excise: the meaning of 'legally and economically independent' - explains the Commissioner's view on the meaning of 'legally and economically independent' for the purposes of the Excise remission scheme for manufacturers of alcoholic beverages and the former Excise refund scheme for alcohol manufacturers.

Comments are due to the ATO by 16 December 2022.

 
 

Draft: Taxation Rulings

GSTR 2002/2DC1 Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions - This draft update amends GSTR 2002/2 to reflect changes in the GST law (for instance, changes to the GST legislation applicable to cross-border supplies and in relation to digital currency), include new references to public guidance released relating to financial supplies, and contains some proposed changes to modernise parts of the Ruling. It also contains a new buy-now pay-later example that applies the ATO’s longstanding view on interest‑free loans and a number of updates to Schedule 2 of the Ruling to indicate when certain foreign currency-denominated products and overseas payment products are GST-free.

TR 2005/5DC2 - Income tax: ascertaining the right to tax United States (US) and United Kingdom (UK) resident financial institutions under the US and the UK Taxation Conventions in respect of interest income arising in Australia - This draft update amends this Ruling to clarify certain aspects of the second limb of the definition of ‘financial institution’ as used in Australia’s double-tax conventions with the United States and the United Kingdom. Key aspects covered by the draft update include:

  • when an enterprise is substantially deriving its profits from carrying on a business of spread activities
  • why some activities are not considered to be the provision of finance, and
  • changes to the use of the word ‘bank’ by financial institutions following changes to Australian banking law.

The draft update will also apply to residents of other countries with a double-tax agreement with Australia if they contain an article that is similarly worded and has the same effect as the United States or United Kingdom conventions.

TR 2005/5DCW - Withdrawal: Income tax: ascertaining the right to tax United States (US) and United Kingdom (UK) resident financial institutions under the US and the UK Taxation Conventions in respect of interest income arising in Australia - This draft update is being withdrawn and being replaced by a further draft update to TR 2005/5 to allow additional community consultation and comment. 

TR 2022/D1 Income tax: section 100A reimbursement agreements
Commissioner’s view on key elements of section 100A including what is: 
- a purpose of eliminating or reducing someone’s income tax
- an agreement, arrangement or understanding entered into in the course of ordinary family commercial dealing. 

TR 2022/D2 - Income tax: residency tests for individuals - This Ruling consolidates and replaces the material in Taxation Rulings IT 2650 Income tax: residency - permanent place of abode outside Australia and TR 98/17 Income tax: residency status of individuals entering Australia on residency for individuals. It also updates the views reflected in those Rulings to take into account developments in case law (including but not limited to Harding v Commissioner of Taxation [2019] FCAFC 29, Pike v Commissioner of Taxation [2019] FCA 2185 and Addy v Commissioner of Taxation [2019] FCA 1768. IT 2650 and TR 98/17 are withdrawn with effect from the date of issue of this Ruling.

TR 2021/2DC1 - Fringe benefits tax: car parking benefits – the draft update amends this Ruling to incorporate changes which address the concept of ‘primary place of employment’, in light of the decision in Commissioner of Taxation v Virgin Australia Regional Airlines Pty Ltd [2021] FCAFC 209.

Comments are due to the ATO on 2 December 2022.


Draft: Taxation Determinations

TD 2022/D1Income tax: Division 7A: when will an unpaid present entitlement or amount held on sub-trust become the provision of 'financial accommodation'? Describes when a private company provides financial accommodation within the meaning of section 109D of the Income Tax Assessment Act 1936 where that company is made presently entitled to income of a trust and either that entitlement remains unpaid (an unpaid present entitlement), or the trustee sets aside an amount from the main trust and holds it on a new separate trust (sub-trust) for the private company beneficiary. 

TD 2022/D2 Income tax: deductibility of expenses incurred in establishing and administering an 'employee share scheme'

TD 2022/D3 - Income tax: use of an individual's fame by related entities - This draft Determination covers arrangements where:
  • the individual with fame (for example, media personalities, professional sportspersons, entertainers, actors, artists and influencers) establishes and enters an agreement with a related entity (for example, a company or a family trust) to use their fame, and
  • the related entity then authorises other entities to use the individual’s fame for a fee.

It explains that income derived under the arrangement is the individual’s and not the related entity’s.

Comments are due to the ATO by 4 November 2022.

 


Draft: Practical Compliance Guidelines

PCG 2022/D4 - Update - Claiming a deduction for additional running expenses incurred while working from home - ATO compliance approach – the draft Guideline will allow taxpayers working from home to use a new method to claim the additional running expenses they incur as a result of working from home. When this Guideline is finalised, the new method (the revised fixed method) will be available for taxpayers to calculate their working from home expenses from 1 July 2022. 
From 1 July 2022, the shortcut method outlined in Practical Compliance Guideline PCG 2020/3 Claiming deductions for additional running expenses incurred whilst working from home due to COVID-19 and the fixed-rate method outlined under ‘Special rules for home office running expenses' in Law Administration Practice Statement PS LA 2001/6 Verification approaches for home office running expenses and electronic device expenses are no longer available for taxpayers to calculate their working from home expenses.

Comments are due to the ATO by 30 November 2022.

PCG 2022/D3 - Goods and services tax and residential colleges - sets out the Commissioner’s proposed compliance approach for universities and residential colleges supplying accommodation, meals, tertiary residential college courses and religious services to resident students and claiming input tax credits. The purpose of the Guideline is to assist residential colleges to determine if supplies of accommodation, meals, tertiary residential college courses and religious services satisfy section 38-250 of the A New Tax System (Goods and Services Tax) Act 1999 and can be treated as GST-free supplies.

Comments on the draft are due by 30 September 2022.

PCG 2022/D1 - Section 100A reimbursement agreements - ATO compliance approach Sets out how the ATO proposes to differentiate risk for a range of trust arrangements to which section 100A might apply. It is designed to provide greater certainty to taxpayers and their advisers to be able to assess the level of risk regarding trust distribution arrangements and determine the level of engagement that they can expect from the ATO.  

PCG 2022/D2 - Non-commercial business losses - Commissioner's discretion regarding flood, bushfire or COVID-19 - proposes a safe harbour for individuals that make a loss from non-commercial business activities due to the special circumstances of flood, bushfire or some COVID-19 impacts (a government-imposed lockdown, business closure and/or restriction) by allowing them to manage their tax affairs as if the Commissioner had exercised the discretion without the need to seek a private ruling. 


Draft: Legislative Instruments

LI 2022/D6 - Taxation Administration - Payment Summary Deferral: Employment Termination and Departing Australia Superannuation Payments Deferral 2022.

LI 2022/D8 - Draft Income Tax Assessment - Cents per Kilometre Deduction Rate for Car Expenses Determination 2022.

LI 2022/D13 - Draft Taxation Administration: Classes of Electronic Payment System Transactions Exempt from Being Reported in Third Party Reports Determination 2022 – This instrument exempts administrators of a payment system (within the meaning of the Payment Systems (Regulation) Act 1998) from having to include specified classes of transactions in reports prepared and lodged in relation to table item 9 in section 396-55 of Schedule 1 to the Taxation Administration Act 1953.

Comments on the draft are due by 30 September 2022.

LI 2022/D14 - Draft A New Tax System (Goods and Services Tax) Margin Scheme Valuation Requirements Determination 2022 - specifies requirements for making valuations for the purposes of the margin scheme under Division 75 of the A New Tax System (Goods and Services Tax) Act 1999.

Comments on the draft are due by 12 October 2022.


Draft: Luxury Car Taxation Determinations

LCTD 2022/D1 - Luxury car tax: how to determine the principal purpose of a vehicle Provides the Commissioner’s proposed view on how to determine whether a car’s ‘principal purpose’ is to carry passengers or goods. 


Other draft items

TPRE 2022/D1 - Draft Taxation Administration Deferral of Third Party Reports by Eligible Community Housing Providers for the 2020-21 Financial Year Determination 2022. 

TPRE 2022/D3 - Draft Taxation Administration Excluded Classes of Transactions and Entities for Third Party Reports on Shares and Units Determination 2022.

LODGE 2022/D1 - Draft Notice of Requirement to Lodge a Return for the Income Year Ended 30 June 2022.

LODGE 2022/D2 - Draft Notice of Requirement for Parents with a Child Support Assessment to Lodge a Return for the Income Year Ended 30 June 2022.
 

Late releases from 2021 and previous years

TR 93/25DC1 - Income tax: assessability of proceeds from illegal activities, treatment of amounts recovered and deductibility of fines and penalties 

GSTR 2012/3DC2 - Goods and services tax: GST treatment of care services and accommodation in retirement villages and privately funded nursing homes and hostels.

 

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