The following public advice and guidance issues have been completed.
[3702] Capital allowances – composite items
Purpose
This Ruling addresses the issue of whether an asset that is made up of a number of parts or components (that is, the composite item) is itself a depreciating asset, or whether one or more of its components are separate depreciating assets.
Outcome
Taxation Ruling TR 2024/1External Link Income tax: composite items – identifying the relevant depreciating asset for capital allowances published on 31 January 2024.
[3708] Forex realisation event 4 [new]
Purpose
An updated draft Determination was originally proposed to clarify whether forex realisation event 4 happens on the repayment of a loan obligation incurred prior to the effective date of an applicable functional currency choice and denominated in the same non-Australian dollar currency that later becomes the applicable functional currency.
Outcome
After consideration of this issue, on 26 June 2024 we amended the withdrawal notice dated 8 October 2014 for Draft Taxation Determination TD 2014/D10 Income tax: does forex realisation event 4 happen to the debtor under subsection 775-55(1) of the Income Tax Assessment Act 1997 on repayment of a loan taken out prior to the effective date of a choice to use the applicable functional currency and denominated in the same non-AUD currency that later becomes the applicable functional currency?.
We will apply the view that forex realisation event 4 happens in the circumstances outlined in former TD 2014/D10 to gains and losses where the applicable functional currency election is made on or after 12 June 2024.
[3718] Corporate limited partnership ‘credits’
Purpose
This Ruling clarifies when a corporate limited partnership 'credits' an amount to one of its partners within the meaning of section 94M of the Income Tax Assessment Act 1936.
Outcome
Taxation Ruling TR 2024/2 Income tax: when does a corporate limited partnership ‘credit’ an amount to a partner in that partnership? published on 21 February 2024.
[3887] Infrastructure privatisation framework
Purpose
This guidance outlines the ATO’s position on the taxation of social infrastructure Public Private Partnerships (PPPs).
Outcome
Taxation of PPPs for social infrastructure projects was published on 10 April 2024.
[3899] Division 7A – undue hardship – corporate trustees
Purpose
This guidance outlines whether a corporate trustee could suffer undue hardship on payment of a debt owed to a company for the purposes of subsection 109G(4) of the Income Tax Assessment Act 1936.
Outcome
Debt forgiveness by private companies was published on 30 May 2024.
[3938] Superannuation income stream [new]
Purpose
Taxation Ruling TR 2013/5 Income tax: when a superannuation income stream commences and ceases was impacted by the legislative amendments flowing from the 2016 Budget announcement of the transfer balance cap, which limits the superannuation interests that a person can have in retirement phase. This Addendum updated the legislative references in the Ruling as a result of these amendments, as well as addressing other amendments, including to the definition of a superannuation income stream benefit.
Outcome
The addendum to TR 2013/5 published on 26 June 2024.
[3950] OECD hybrid mismatch rules
Purpose
This guidance addresses the Commissioner’s view on key aspects of the ‘subject to foreign income tax’ definition, with particular focus on treatment of intra-group payments between members of the same US consolidated group.
Outcome
Hybrid mismatch rules, which explains how the hybrid mismatch rules work and when they apply, published on 25 January 2024.
[4006] Intangibles arrangements
Purpose
The Guideline sets out the ATO's compliance approach to international arrangements connected with the development, enhancement, maintenance, protection and exploitation of intangible assets; specifically, the potential application of the transfer pricing, general anti-avoidance rule and the diverted profits tax provisions.
Outcome
Practical Compliance Guideline PCG 2024/1 Intangibles migration arrangements published on 24 January 2024.
[4054] Fringe benefits tax and electric vehicles
Purpose
This Guideline considers both fringe benefits tax and income tax issues and provides a methodology to enable users of electric vehicles to determine an approximate cost for the electricity when charging an electric vehicle at home.
Outcome
Final Practical Compliance Guideline PCG 2024/2 Electric vehicle home-charging rate: calculating electricity costs when charging a zero or low emissions vehicle at an employee's or individual's home published on 1 February 2024.
[4057] Deductibility of self-education expenses
Purpose
This Ruling provides an update of Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business (withdrawn) to reflect the repeal of section 82A of the Income Tax Assessment Act 1936, include new case law and ensure consistency of language across related rulings. It also includes content from Taxation Ruling TR 92/8 Income tax: deductibility of self education expenses (withdrawn) regarding why certain legs of travel are or are not deductible.
Outcome
Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual published on 21 February 2024.
[4065] Liability of a legal personal representative of a deceased person
Purpose
This Guideline has been updated to provide improved certainty for legal personal representatives when finalising less complex estates.
Outcome
An update to Practical Compliance Guideline PCG 2018/4 Income tax – liability of a legal personal representative of a deceased person was published on 10 April 2024.
[4096] Supplies of combination food
Purpose
The Determination provides the Commissioner’s view on the meaning of 'food that is a combination of one or more foods’ for the purposes of paragraph 38-3(1)(c) of A New Tax System (Goods and Services Tax) Act 1999 following the Administrative Appeals Tribunal decision in Chobani Pty Ltd and Commissioner of Taxation [2023] AATA 1664.
Outcome
Goods and Services Tax Determination GSTD 2024/1 Supplies of combination food published on 28 February 2024.
[4100] Deductibility of settlement payment
Purpose
This Decision impact statement outlines the ATO’s response to the Federal Court decision on Commissioner of Taxation v Wood [2023] FCA 574 which concerned whether a payment made by the taxpayer to settle litigation after his relevant employment ended was deductible under section 8-1 of the Income Tax Assessment Act 1997.
Outcome
The Decision impact statement on Commissioner of Taxation v Wood was published on 21 February 2024 and no further updates will be made.
[4114] Application of non-arm's length provisions
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal's decision in BPFN and Commissioner of Taxation [2023] AATA 2330, which was about whether the non-arm’s length income provision in subsection 295-550(5) of the Income Tax Assessment Act 1997 applied to distributions made to a self-managed superannuation fund.
Outcome
The Decision impact statement on BPFN and Commissioner of Taxation published on 10 April 2024 and no further updates will be made.
[4119] Victorian Taxi Reform Fairness Fund Payments
Purpose
The Decision impact statement on Bains and Commissioner of Taxation [2023] AATA 2477 outlined the ATO's response to the Administrative Appeals Tribunal's decision that a payment received by a Victorian taxi licence holder from the Victorian Taxi Reform Fairness Fund is not income according to ordinary concepts.
Outcome
Taxi licence holders – payments and levies has been updated to provide current advice on tax obligations for taxi industry assistance payments.
[4125] Frozen foods marketed as prepared meals
Purpose
The Decision impact statement outlines the ATO’s response to the Federal Court decision on Simplot Australia Pty Limited v Commissioner of Taxation [2023] FCA 1115, which concerned whether 6 frozen food products were of a kind 'marketed as a prepared meal' and therefore taxable under paragraph 38-3(c) of the A New Tax System (Goods and Services Tax) Act 1999.
Outcome
The Decision impact statement on Simplot Australia Pty Limited v Commissioner of Taxation published on 8 November 2023 and no further updates will be made. Work continues on reviewing impacted advice and guidance outlined in the Decision impact statement.
[4138] Sale of residential premises – profit-making purpose
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal decision in Bowerman and Commissioner of Taxation [2023] AATA 3547, which concerned the deductibility under section 8-1 of the Income Tax Assessment Act 1997 of a loss incurred by an individual on the sale of her home which she acquired with the purpose of making a profit in a commercial manner.
Outcome
The Decision impact statement on Bowerman and Commissioner of Taxation published on 13 March 2024 and no further updates will be made.
[4149] OECD hybrid mismatch rules [new]
Purpose
This Determination sets out the Commissioner’s view on certain aspects of the ‘liable entity’ and ‘hybrid payer’ definitions in Division 832 of the Income Tax Assessment Act 1997.
Outcome
Taxation Determination TD 2024/4 Income tax: hybrid mismatch rules – application of certain aspects of the ‘liable entity’ and ‘hybrid payer’ definitions published on 3 July 2024.
[4155] Eligibility of R&D activities and feedstock adjustment [new]
Purpose
This Decision impact statement outlines the ATO's response to the Administrative Appeals Tribunal's (AAT's) decision in GQHC and Commissioner of Taxation [2024] AATA 409. In this case, the AAT considered:
- whether the Commissioner has the power to assess or make decisions as to whether a research and development (R&D) entity's registered activities consisted of eligible R&D activities as defined in Division 355 of the Income Tax Assessment Act 1997
- the eligibility of GQHC's registered activities, and
- (assuming an R&D tax offset was available) whether expenditure incurred by GQHC in acquiring or producing both day-old broiler chickens and poultry feed given to chickens were feedstock input expenditure which requires a feedstock adjustment.
Outcome
The Decision impact statement on GQHC and Commissioner of Taxation published on 12 April 2024. The comments period closed on 10 May 2024 and no further updates will be made.
[4163] Is a contract lecturer of a higher education provider an employee or an independent contractor? [new]
Purpose
This Decision impact statement outlines the ATO's response to JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76, which concerned whether a contract lecturer of a higher education provider was engaged as an employee or an independent contractor pursuant to:
- the common law meaning of the term 'employee' under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA), or
- the extended meaning of the word contained in subsection 12(3) of that the SGAA.
Under subsection 12(3) of the SGAA, an individual is an employee of an engaging entity where they work under a contract that is wholly or principally for their labour.
Outcome
The Decision impact statement on JMC Pty Ltd and Commissioner of Taxation published on 15 May 2024. The comments period closed on 14 June 2024 and no further updates will be made. The 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) includes updates related to this decision.
[4164] An individual will be an employee of an engaging entity where they work under a contract that is wholly or principally for their labour [new]
Purpose
This Decision impact statement outlines the ATO's response to Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48, which concerns whether the appellants were employees of the first and second respondents (ZG Operations Australia Pty Ltd and its predecessors) pursuant to subsection 12(3) of the Superannuation Guarantee (Administration) Act 1992. Under subsection 12(3) of that Act, an individual will be an employee of an engaging entity where they work under a contract that is wholly or principally for their labour.
Outcome
The Decision impact statement on Jamsek v ZG Operations Australia Pty Ltd (No 3) published on 15 May 2024. The comments period closed on 14 June 2024 and no further updates will be made. The 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) includes updates related to this decision.