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Fitzroy Services Pty Ltd v Commissioner of Taxation [2013] FCA 471

[20 May 2013]

INCOME TAX – deductions claimed for management fees paid to associated companies and interest and charges paid to foreign bank – whether loans from foreign bank a sham – whether novation of original debt and assumption of new liability – no evidence of services provided for management fees – whether interest and charges incurred deductible under s 8-1 or s 25-25 of Income Tax Assessment Act 1997 (Cth) – power to issue amended assessment – whether fraud or evasion – shortfall penalties – whether base penalty amount should be calculated by reference to intentional disregard of taxation laws or recklessness.  Click here

Kronen v Commissioner of Taxation [2013] FCA 416

[10 May 2013]

SUPERANNUATION – employee claims employer failed to make proper superannuation guarantee payments – discussion of means by which employee may establish that claim – whether employee may require Commissioner to take steps to establish employee’s claim – where Commissioner does not agree with employee’s claim – Commissioner not obliged to take steps to establish employee’s claim in circumstances
PRACTICE AND PROCEDURE – application for leave to appeal from orders of Federal Court judge to Full Court – whether primary judgment attended by sufficient doubt to warrant it being reconsidered by Full Court – where applicant sought prerogative writs or declaratory relief to require respondent to take steps to recover alleged superannuation contribution shortfalls payable by applicant’s former employer to applicant’s superannuation fund – where applicant argues that respondent has an obligation to take such steps on proper construction of Superannuation Guarantee (Administration) Act 1992 (Cth) – the applicant has no prospect of success on appeal – application refused.  Click here

Caporale v Deputy Commissioner of Taxation [2013] FCA 427

[9 May 2013]

CONSTITUTIONAL LAW – challenge to validity of ss 55ZG(2) and (3) of the Judiciary Act 1903 (Cth) – Legal Services Directions 2005 Schedule 1, Appendix B –Commonwealth’s obligation to act as a model litigant – nature of obligations imposed – whether interference with federal judicial power or its exercise.  Click here

Tax Avoidance Conference - 17 May 2013

[2 May 2013]

The Melbourne Law School is hosting a conference on the topic of Tax Avoidance in the 21st century.  This important all day conference will be held at the Woodward Conference Centre at the Melbourne Law School. Speakers include the Hon David Bradbury, the Hon Justice Edmonds, the Hon Justice Pagone, Michael D'Ascenzo and Jonathan Woodger.  Click here for further details and/or to register.

Special CPD Seminar and Dinner - 4 June 2013

[2 May 2013]

The TBA is delighted to announce a special seminar to be given by Justice Kerr on “Considerations Relevant to Choice of Forum – Administrative Appeals Tribunal or the Federal Court”.  Please see flyer attached.

Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16

[1 May 2013]

Taxation – GST – Application of margin scheme – Anti-avoidance – Respondent representative member of GST group of companies – Where margin scheme applied to supply of units in property development – Where respondent engaged in "scheme" and obtained "GST benefit" – Whether s 165-5(1) of A New Tax System (Goods and Services Tax) Act 1999 (Cth) engaged – Whether GST benefit "not attributable to" making by respondent of choice, election, application or agreement expressly provided for by the GST law.  Click here

Resource Capital Fund III LP v Commissioner of Taxation [2013] FCA 363

[26 Apr 2013]

DOUBLE TAXATION TREATIES – United States Double Taxation Convention – principles of and materials in aid of interpretation – taxation of gains derived from disposition of shares in a company owning real property (mining tenements) situated in Australia by a limited partnership formed outside both Australia and the United States but comprised of limited partners being predominantly United States residents – whether gain derived by limited partnership or limited partners for the purpose of the Convention – reconciliation with any inconsistency under Australia’s domestic law – Div 5A of Pt III of Income Tax Assessment Act 1936 (Cth)

INCOME TAX – Div 855 of Pt 4-5 of Income Tax Assessment Act 1997 (Cth) – whether capital gains derived by a foreign resident to be disregarded – whether “principle asset test” in s 855-30 passed – consideration of what is to be valued and compared as the criterion for passing the test – hypotheses and methodologies of valuation to be adopted.  Click here

Commissioner of Taxation v Nash [2013] FCA 336

[16 Apr 2013]

INCOME TAX – appeal from the AAT – decision of the appellant to disallow deductions claimed by the respondent for the General Interest Charge (GIC) – AAT held that a GIC expense is incurred at the time at which the GIC become due and payable by the operation of the relevant tax legislation – whether a taxpayer incurs expenditure for the GIC within the meaning of s 25-5(1)(c) of the Income Tax Assessment Act 1997 (Cth) in the years in which the GIC accrues on the tax debts to which it relates or whether it is incurred only when an assessment is issued for those tax debts – the meaning of “incur” in s 25-5(1)(c) of the Income Tax Assessment Act 1997 (Cth) – ongoing significance of assessments in the imposition and recovery of tax and related provisions concerning GIC.  Click here

ATS Pacific Pty Ltd v Commissioner of Taxation [2013] FCA 341

[15 Apr 2013]

TAXATION – Goods and Services Tax – characterisation of supply – booking and arranging services provided by Australian company to overseas travel agents for overseas tourists in Australia – whether merely supply of booking and arranging services – whether supply of a promise that Australian providers would supply hotel rooms and other holiday services – whether margin is incidental – whether Commissioner of Taxation has discretion to refuse to refund GST.  Click here

Denlay v Commissioner of Taxation [2013] FCA 307

[5 Apr 2013]

JUDICIAL REVIEW – application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) for judicial review of the decision of the respondent to issue a garnishee notice pursuant to s 260-5 of Schedule 1 of the Taxation Administration Act 1953 (Cth) – whether the decision to issue the notice was an improper exercise of power, per s 5(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – whether the respondent failed to take relevant considerations into account in the exercise of the power to issue the 260-5 notice, per s 5(2)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – whether the decision to issue the notice in circumstances where there was a stay of the enforcement of a Queensland Supreme Court judgment in respect of the appellant’s amended assessment based taxation liabilities and while the tax appeals were part-heard, was so unreasonable that no reasonable decision maker could have exercised the power, per s 5(2)(g) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – an examination of the number of relevant considerations in relation to the discretionary power to issue a garnishee notice under s 260-5 of Schedule 1 of the Taxation Administration Act 1953 (Cth) in light of the broader statutory scheme within which it operates.  Click here

Tax Bar Association Rules

[3 Apr 2013]

Dear Member

at a general meeting of the Association held on 2 April 2013 new Rules regulating the Tax Bar Association were adopted. A copy of the rules is attached.

Simon Steward, S.C. 

 

VN Railway Pty Ltd v Commissioner of Taxation [2013] FCA 265

[27 Mar 2013]

TAXATION – appeal from Administrative Appeals Tribunal – proper construction of phrase “eligible employee” in s 82AAC of the Income Tax Assessment Act 1936 (Cth) – whether entitlement to deduction where superannuation contribution allegedly made in respect of an employee – whether book entries sufficient to show that contribution has in fact been made – whether open to Tribunal to determine intentional disregard for law where certain witness allegedly not cross-examined with respect to beliefs as to tax obligations – whether denial of procedural fairness – whether determination unreasonable.  Click here

Bell v Commissioner of Taxation [2013] FCAFC 32

[22 Mar 2013]

TAXATION – income tax – capital gain – whether taxpayer satisfied “maximum net asset value test” – calculation of “net value of CGT assets” – requirement to subtract from asset values the liabilities that related to those assets – whether Administrative Appeals Tribunal erred in law in holding that relation did not exist between certain liabilities and assets of taxpayer – whether trustee taxpayer’s intention to preserve assets of trust provided necessary relation between borrowing and those assets after borrowed funds distributed to beneficiary – whether bank account in debt and interest offset account in credit to be treated as single account

TAXATION – income tax – penalty – whether Administrative Appeals Tribunal erred in law in imposing penalty by reference to taxpayer’s failure to exercise reasonable care  Click here

Commissioner of Taxation v Boyn [2013] FCA 232

[20 Mar 2013]

INCOME TAX – employee termination payment (“ETP”) – tax payable on taxable component where taxable component exceeds ETP cap amount giving rise to an employment termination remainder (“ETR”) – calculation of ETR where excess exceeds taxable income by reason of allowable deductions exceeding the sum of the ETP cap amount and other classes of assessable income other than the excess.  Click here

Gashi v Commissioner of Taxation [2013] FCAFC 30

[14 Mar 2013]

INCOME TAX – assessable income – husband failed to lodge returns in some years and lodged returns in others – wife failed to lodge returns in all years – Commissioner assessed husband and wife as liable to tax using asset betterment method pursuant to s 167 of Income Tax Assessment Act 1936 (Cth) – onus on taxpayer pursuant to s 14ZZO of Taxation Administration Act 1953 (Cth) – method of satisfying onus where Commissioner relies on asset betterment method – taxpayer must positively establish actual taxable income – in doing so, taxpayer must show that unexplained accumulated wealth was from non-income sources – insufficient to seek to disprove items included in asset betterment statement

INCOME TAX – assessable income – multiple notices of amended assessment subsequently issued in respect of the same income year – whether subsequent notices of amended assessment invalid – whether Court competent to consider validity of notices of assessment in proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth) Click here