[4042] Ordinary meaning of the term 'employee' [updated]
We are reviewing several products that currently provide 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:
- Taxation Ruling TR 2023/4 Income tax: pay as you go withholding – who is an employee?
- Taxation Ruling TR 2013/1 Income tax: the identification of 'employer' for the purposes of the short-term visit exception under the Income from Employment Article, or its equivalent, of Australia's tax treaties
- Superannuation Guarantee Rulings SGR 2009/1 Superannuation guarantee: payments made to sportspersons and SGR 2005/2 Superannuation guarantee: work arranged by intermediaries
- ATO Interpretative Decision ATO ID 2014/28 Superannuation Guarantee Status of the Worker: Pizza delivery drivers as employees.
Expected completion
To be advised.
Comments
Practical Compliance Guideline PCG 2023/2 Classifying workers as employees or independent contractors – ATO compliance approach published on 6 December 2023.
A draft update to 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. Superannuation Guarantee Ruling SGR 2005/1 Superannuation guarantee: who is an employee? has now been withdrawn.
For more information, see the Decision impact statement on Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1.
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[4063] Determining the amount of statutory income that is non-arm’s length income [updated]
Title
Final Taxation Determination
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
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 will address 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.
Expected completion
July 2024
Comments
Draft Taxation Ruling TR 2023/D1 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 28 June 2023. Comments period closed on 28 July 2023.