TR 93/30 provides that occupancy expenses are generally private in nature and not deductible unless part of the home was used for income producing activities and that part of the home has the character of a place of business.

TR 93/30 goes on to provide that whether an area of the home has the character of a place of business is a question of fact which depends on the circumstances of each case.

As a result of the Chief Health Officer's directions and employer's directions during the pandemic, there is some level of contention as to how these deductibility principles should apply.

The Product comprises taxable and non-taxable ingredients respectively stored in two separate compartments. The Applicant intends for these ingredients to be mixed in at the time of consumption and not to be consumed separately.

There is uncertainty as to whether such a supply is:

a.

of a food that is a combination of one of more foods within the meaning of paragraph 38-3(1)(c) (at least one of which is of a kind specified in the 3^rd column of the table in clause 1 of Schedule 1 to the GST Act); such that it is not GST-free pursuant to section 38-2 of the GST Act; or

b.

not such a combination and instead a single, composite supply of one thing that is GST-free under section 38-2 of the GST Act, being made up of a dominant part and other parts that are not treated as having a separate identity as described in paragraph [21] of GSTR 2001/8.

The Panel observed that there are substantiation issues surrounding the occupancy and travel expenses claimed by the Applicant, noting also that the occupancy expenses are minimal.

Based on the circumstances of the matter, the main issue identified by the Panel was that the Applicant has not substantiated their expenses under Division 900 of the Income Tax Assessment Act 1997. Had the taxpayer been able to comply with the substantiation of overseas travel requirements and provide evidence that they had not been reimbursed by their employer, then most of the travel expenses may be deductible.

For the above reasons, the Panel recommended funding be declined. The Chair of the Panel agreed with the recommendation and declined test case funding for this matter.

1.

In regards to section 160-30 of the Income Tax Assessment Act (ITAA) 1997, the definition of trustee in section 6 of the ITAA 1936 and at law, section 254 of the ITAA 1936, whether or not an individual appointed as a trustee of a sequestrated estate pursuant to the Bankruptcy Act 1966 is an "agent" or "trustee" for the purposes of section 254 of the ITAA 1936 and hence answerable as taxpayer for the doing of all such things as required to be done by virtue of the ITAA 1936 in respect of income, or any profits or gains of a capital nature, derived by him or her in that capacity or derived by the principle by virtue of his/her agency.

2.

Whether or not a trustee in bankruptcy is considered an agent or trustee for the purposes of the general law which may also impart upon clarifying the duties and obligations that such a person may have in that role more broadly.

The Panel acknowledged the applicant's claims regarding industry wide concerns with the ATO view of the tax obligations on bankruptcy trustees, however it was noted that the issue has not been raised with the ATO widely by other taxpayers and industry bodies.

The Panel concluded that there is already established ATO guidance on the issues raised in the application which have been provided to the Trustee and thus test case funding is not an appropriate avenue to fund the matter.

For these reasons, the panel recommended that funding should not be approved. The chair accepted the recommendation and declined funding.

For these reasons, the Panel took the view that there are no issues requiring law clarification and there is unlikely to be any broad effect on the community such that it is necessary to litigate the issue.

Accordingly, the Panel recommended that funding be declined. The Chair of the Panel agreed with the recommendation and declined test case funding for this matter.

1.

The definition of 'payment' for the purposes of Division 7A of the Income Tax Assessment Act 1936 (Cth) (ITAA).

2.

Whether the words 'credit an amount to, or on behalf of, or for the benefit of' in s109C(3)(b) of the ITAA were intended to capture a 'crediting' (the receipt of one asset - such as the assignment of a loan receivable) as a replacement for another asset - (the Division 7A loan receivable).

3.

The application of section 45B of the ITAA and the relevant circumstances to be given regard to determine whether the capital reduction was carried out for the purpose of obtaining a tax benefit.

4.

The application of Part IVA of the ITAA and what may be considered a reasonable alternative to the transactions alleged to form the scheme.

For these reasons, the panel recommended that funding be declined The Chair of the Panel agreed with the recommendation and decided to decline test case funding for this matter.

1.

The ordinary meaning of 'employee' in section 12(1) of the or the extended definition under section 12(3).

2.

Whether the worker had a right of delegation under his written contract; and

3.

Whether the contract was "wholly or principally for" the worker's labour or whether the worker's labour was directed towards himself in producing the result that he was contracted to produce.

When discussing these decisions, the Panel noted that the High Court established the meaning of 'employee' and agreed that the decisions provided clarification on the issues highlighted in the funding application. As such, the Panel agreed there is no general uncertainty or contention about the legal test.

Accordingly, the Panel agreed that the matter is an application of established principles to the facts and recommended funding be declined. The chair agreed with the recommendation and declined funding.

1.

Can the Commissioner treat the loan as contingent due to the inclusion of an explicit term that it need not be repaid if the services to which it relates are not delivered and/or

2.

Can the loan be treated as not being genuine in circumstances where the Commissioner is not alleging sham?

Additionally, the Panel noted the issues in this matter are narrow and any Tribunal decision may turn on the particular facts. In these circumstances, a resulting decision would have limited application.

For the above reasons, the Panel recommended funding be declined. The chair accepted the recommendation and declined funding.

It was noted that the trust structure in this matter is not novel. This arrangement has been well ventilated, with legal precedent already established. As such, any decision in these proceedings would provide little precedential value.

The Panel noted the principle in Fletcher v Commissioner of Taxation (1991) 173 CLR 1had been applied in the objection decision to limit the interest deductions to the amount of income received.

For these reasons, the Panel recommended funding be declined. The Chair of the Panel agreed with the recommendation and decided to decline test case funding for this matter.

1.

What constitutes a 'foreign transaction' in section 14 of the Income Tax Assessment (1936 Act) Regulation 2015 (Cth), which is not a defined term.

2.

What is required for income to come 'from' the foreign transaction identified.

3.

What is required to satisfy that a foreign transaction has been 'identified'.

The panel acknowledged there may be situations where this issue is more nuanced, such as if you have an Australian buyer and seller but that transaction is executed on a foreign exchange, or if a payment originates from an offshore entity for work done in Australia. In those situations, it may be argued that those are not foreign transactions.

The panel noted that the underlying question is not of sufficient contention. Most of the considerations in favour of funding in this matter are about sending a compliance message to the community, which is not within the remit of test case funding. This will be achieved in any event if the applicant does proceed to litigate.

Further, it was unclear on what basis the applicant sought to argue that the transaction was not a foreign transaction. For example, he has not argued that he believes the transaction did not take place on a foreign exchange, or that the transaction was completed on a computer in Australia. Instead, the applicant's submissions are about the lack of guidance provided by the Commissioner.

The panel also observed there is nothing particularly novel about this transaction. Foreign exchanges or servers are utilised every day to conduct millions of transactions.

The panel also drew analogies to contract law: acceptance takes place where the transaction is received, and defamation law: the defamation occurs where the defamatory material is read. Similarly, in the OECD's work in taxing digital transactions, the source of income is based on where the platform that processes the transaction is located. Accordingly, it does not seem controversial to say that a transaction that took place on a foreign exchange is a foreign transaction.

For these reasons, the panel recommended that funding should not be approved. The chair accepted the recommendation and declined funding.

1.

What constitutes the private ruling under review when the objection has been allowed in part and the objection decision purports to have provided two distinct documents being a:

a.

notice of objection decision; and

b.

reason for decision.

2.

Can additional documents not mentioned in the original private ruling material be relied upon to interpret the terms of a contract where the scheme in the private ruling is inclusive of the terms of that contract and there is a dispute about the interpretation of the terms of agreement:

a.

where that additional material was not before the Commissioner; or

b.

where that additional material was before the Commissioner but not mentioned in the private ruling or the objection decision; and/or

c.

where that material was mentioned under "we looked at this information" in relation to issue a.

3.

Can an attachment to a document be relied upon by the applicant where the document and selected attachments have been considered by the Commissioner and the attachment the applicant wishes to rely upon was provided at the same time attached to the same document but not listed amongst the attachment by the Commissioner.

4.

Concerns an interlocutory application to stay the Commissioner's objection decision. That stay application has now been withdrawn. However, for completeness issue 4 relates to validity of the objection decision.

The panel found it difficult to identify the error of law put forward by the applicant and noted the issue being advanced in the funding application appeared to be procedural in nature and confined towards the factual circumstances.

For these reasons, the panel recommended that funding should not be approved. The chair accepted the recommendation and declined funding.

1.

What constitutes payment or constructive payment under section 11-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) ( TAA )?

2.

Whether a journal entry constitutes payment or constructive payment under section 11-5 of Schedule 1 to the TAA?

3.

What other conditions, circumstances, and/or evidence is required for a journal entry to constitute payment or constructive payment under section 11-5 of Schedule 1 to the TAA?

4.

Can you have a sole or dominant tax avoidance purpose under an anti-avoidance provision where you seek to avoid a different anti-avoidance provision?

The panel also considered that this case does not require consideration as to the substantive law in relation to the anti-avoidance provisions. The way the issues have been identified are in general terms.

The panel noted that the taxpayer appears to have been vague as to the historical events and did not discharge the burden proof during AAT proceedings. The panel agreed that this appeared to demonstrate an unwillingness to progress the issues in a timely manner to avoid delays. The panel considered that there also appears to be contrived arrangements to rewrite accounting history which may result in a benefit that is contrary to the law.

The panel considered that there are uncertainties and curiosities as to the facts of the case, but the matter has limited use as to the application of the substantive law.

For these reasons, the panel recommended that funding should not be approved. The chair accepted the recommendation and declined funding.

1.

Whether the Commissioner has discretion to remit penalties imposed pursuant to the Superannuation Guarantee (Administration) Act 1992 (SGAA) below 100% of the superannuation guarantee charge (SGC)

2.

Whether the Commissioner has discretion to remit penalties below the level of 100%, and whether the correct or preferable decision is to remit the penalties in full to nil

3.

Whether the Commissioner's audit should have been formally put on hold

4.

Whether the COVID-19 pandemic materially reduced the capacity of the taxpayer to lodge SG statements and make disclosures

5.

Whether the discretion to remit SGC was narrowly applied

6.

Whether the principles in the Taxpayer's Charter were applied.

The Panel acknowledged and discussed an inconsistency in the application regarding the 'nudge' letter and whether it was received by the taxpayer. The Panel concluded it was received based on the taxpayer's written response, that the process is clear with respect to the limitation of the Commissioners discretion if a 'nudge' letter is received by the taxpayer and it was incidental that the letter was received prior to the start of the COVID-19 pandemic as the issues relate to prior periods.

The Panel noted that the fundamental issue pertains to the Commissioner's ability to remit the penalties imposed to less than 80% due to the exceptional circumstances experienced by the taxpayer at that time. On this point, the Panel noted that there is sufficient judicial instruction regarding exceptional circumstances and agreed that the issue did not require further judicial clarification.

The Panel also observed that the matter is likely one which will rely on an evaluation of facts that are particular to the taxpayer and that the penalty remission powers were altered in 2018. Accordingly, the Panel agreed both elements would further limit any potential law clarification for other cases dealing with similar issues and recommended that funding be declined.

The Chair accepted the recommendation and declined funding.

a.

the Commissioner of Taxation's obligation under s 166 of the Income Tax Assessment Act 1936(Cth) ( ITAA ) to use all information in his possession to make an assessment of a taxpayer's taxable income and the amount of tax payable by the taxpayer; and

b.

the Commissioner's implied undertaking, commonly referred to as a Harman undertaking in reference to the decision in Harman v Secretary of State for the Home Department [1983] 1 AC 280, in relation to documents and information obtained through the curial processes not to make use of such documents and information other than in the litigation.

The panel noted that the issues had previously been determined in the cases of Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38 and Deputy Commissioner of Taxation v Shi [2021] HCA 22. It was considered that the matter does not relieve any ambiguity in those cases and is not entirely new or novel. Further, the matter does not narrow the application or does not contribute anything by way of precedent.

Accordingly, the panel recommended that the funding application be declined . The chair accepted the recommendation and declined funding.

The chair noted that in these circumstances retrospective funding could set a difficult precedent and may expand the operation of the Test Case Funding Program. It was further noted that had the application been considered before the proceeding, that funding would have been declined.

a.

there is a direct link between income and expense for the maintenance of dogs/live animals from home.

b.

a 3m x 2m concrete area, which was paid and installed by the applicant's employer at the applicant's home for the maintenance of the dogs/live animals, be considered a place of work.

c.

2 dog kennels owned by the South Australian (SA) Government housing dogs/live animals daily at the applicant's home, be considered a place of work.

d.

2 live dogs, being SA Government assets and stored at the applicant's home, be considered as a place of work.

e.

a SA Government owned gun safe installed in the applicant's home for storage of SA Government guns and ammunition be considered a place of work.

f.

section 900-115(3) should have been applied to this matter rather than section 900-195 of the Income Tax Assessment Act 1997 (Cth).

Notwithstanding these observations, the panel also noted that the matters pursued in the application did not raise any novel issues requiring law clarification but rather issues that already have clear and established case law principles.

Accordingly, the panel unanimously recommended funding application be declined . The chair accepted the recommendation and declined funding.

The Panel noted that funding decisions need to be made with reference to the funding criteria and expectations. Particularly, a case "must be likely to provide legal precedent as a principle of law, capable of being used to decide other cases with similar facts, giving certainty and clarity for taxpayers". Accordingly, it was agreed that the matter was more a question of fact rather than a question of law.

The Panel observed that as the issue identified in the application was likely to turn on its specific facts, consequently, it was unlikely to lead to a legal precedent in an area of legal uncertainty. The Panel further added that the way in which different taxpayers evidence their claims and what is considered 'sufficient' evidence in a particular instance depends on the facts and circumstances of each matter.

Accordingly, the Panel recommended that funding be declined . The Chair accepted the advice of the Panel and declined funding.

The Panel noted that there is a lack of sufficient uncertainty or contention about how the law operates because the law is already clearly determined. It was considered that this matter was more a question of fact rather than a question of law.

The Panel conceded that whilst the matter may add to established case law, it would not provide a precedent for future cases.

Accordingly, the Panel recommended that funding be declined.

The Chair accepted the recommendation and declined funding.

1.

Whether the definition of a "Pension" in the Superannuation Industry (Supervision) Act 1993 ( SISA ) relating to pre-20 September 2007 recipients of a "disability superannuation benefit", does not comply with the rules of the sub-regulations of the Superannuation Industry (Supervision) Regulations 1994 ( SISR ), pertaining to a pension according to the respective SISR Reg:1.06; specifically, Sub-Reg:1.06(1A).

2.

Whether Commonwealth and Military superannuation entitlements are unfunded public sector "defined benefit interests", as provisioned by the Commonwealth Superannuation Corporation (CSC).

The Panel also noted that the matter is unlikely to provide precedent as a principle of law as the Tribunal's decision on this matter is likely to turn on a full evaluation of the facts.

The Panel was unanimous in the recommendation that funding should be declined . The Chair accepted the recommendation and declined funding.

1. Whether an applicant's burden of proof under subsection 14ZZK(b) of the Taxation Administration Act 1953 (Cth) will be satisfied:

a.

by adducing evidence suggesting that all or part of the Commissioner's methodology in making an assessment may have been flawed.

b.

by adducing evidence that the Commissioner may have been mistaken as to relevant facts when making an assessment.

The Panel noted that questions identified in the application will not deal with the onus of proof issue initially raised by the applicant. It was further noted that a re-hearing by the AAT will not finalise those questions raised. Rather, they would need to be determined by the Federal Court.

The Panel noted that because the applicant's matter is now back before the AAT for a fresh review of the objection, she is seeking funding for a fresh merits review of the objection decision. However, the Panel observed that Test Case Funding is not usually granted to fund such matters in the AAT.

The Panel remarked that there is no matter of contention or uncertainty which would warrant funding, as the AAT reconsideration of this matter would turn on its own facts.

Accordingly, the Panel recommended that funding be declined. The Chair accepted the recommendation and declined funding.

1.

Whether the above-mentioned sections are laws with respect to the acquisition of property other than on just terms contrary to s 51(xxxi) of the Constitution and not supported by any other head of power, and therefore constitutionally invalid.

2.

If the provisions are valid, whether s 136-10(1) confers a discretion on the Commissioner to issue an excess transfer balance determination and if so, what are relevant considerations the Commissioner should take into account.

3.

If s 136-10(1) does confer a discretion on the Commissioner, whether the Commissioner's decision to issue the excess transfer balance determination (and to disallow the objection) was the correct decision on the merits.

The Panel also discussed the issue of constitutional validity and noted that a challenge to constitutional validity is not an issue that the Panel would recommend for funding.

The Panel observed that as the first issue on constitutional validity was not a matter to which funding should apply, as framed, the other issues fall away.

Accordingly, the Panel recommended that funding be declined. The Chair accepted the recommendation and declined funding.

1.

Was a Lump Sum Payment in Arrears ( LSPIA ) paid to taxpayers under each Deed of Acknowledgement and Assignment, ordinary income within the meaning of section 6-5 of the Income Tax Assessment Act 1997 (Cth) ( ITAA 1997 )?

2.

Did CGT event A1 (see section 104-10 of the ITAA 1997) happen for the taxpayers in respect of each Deed of Acknowledgment and Assignment entered into by them and that company?

3.

If CGT event A1 did happen in respect of each Deed of Acknowledgment and Assignment, then:

a.

did the taxpayers make a capital gain and, if so, what was the quantum of the capital gain; and

b.

was the capital gain made by the taxpayers a 'discount capital gain' within the meaning of Division 115 of the ITAA 1997?

The Panel also agreed that there is no plausible argument that the amount in question constitutes capital as opposed to revenue income.

Accordingly, the Panel recommended that funding be declined. The Chair accepted the recommendation and declined funding.

1.

Whether the expenses were incurred in gaining or producing the Applicant's assessable income under section 8-1(1)(a);

2.

Whether the expenses were an outgoing of capital or of a capital nature or of a private or domestic nature, and accordingly not deductible under 8-1(2).

1.

The occasion of the liability that was discharged was the work done by the respondent as employee. It did not matter that the liability itself was created by the Settlement Deed (after employment had ceased) because the claim that was compromised by that deed arose directly out of the respondent's employment.

2.

The respondent's conduct in his employment was at once the source of income and the cause of the risk of liability.

3.

The respondent's agreement to pay, and then payment, to bring allegations about his conduct in his employment to an end is similarly characterised – it is a loss or outgoing that reduces his income from his employment.

Further the Court held that the Settlement Sum was not an outgoing of capital or of a capital nature because:

1.

It was to be characterised as bringing to an end the litigation risk arising from the respondent's conduct in his employment years previously, rather than as in the protection of his reputation in the future.

2.

It did not involve the acquisition of any tangible asset, but rather arose out of the very activities the respondent performed in gaining assessable income. The discharge of the liability that arose out of those activities cannot sensibly be characterised as a loss or outgoing of capital or of a capital nature – it was not to protect goodwill or widespread or general reputation, or to secure habitual patronage by clients or customers.

1.

In respect of the first appeal, the issues raised are:

a.

Whether a present entitlement of a beneficiary to a share of the income of the trust arose out of a reimbursement agreement within the meaning of section 100A of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936).

b.

Whether the Commissioner's posited reimbursement agreement was entered into in the course of ordinary family or commercial dealing within the meaning of subsection 100A(13).

c.

Whether the Commissioner's posited reimbursement agreement was entered into for the requisite tax reduction purpose within the meaning of subsection 100A(8).

2.

In respect of the second appeal, the issues raised are:

a.

Whether there was a scheme to which Part IVA applied.

b.

Whether, in relation to the '2012 related scheme' and '2013 related scheme' as defined in the first instance judgment, the taxpayer obtained a tax benefit in connection with one or both schemes.

c.

Whether, in applying section 177CB to the 2013 income year, the Commissioner's posited counterfactual has comparable substance and achieves comparable results and consequences (other than tax consequences).

d.

Whether one, or both schemes was carried out for the sole or dominant purpose of obtaining a tax benefit.

In relation to the second appeal, the Court held that Part IVA applied in the 2013 income year but not the 2012 income year. The Court found that:

•

The 2012 related scheme and 2013 related scheme were each a 'scheme' as defined in s 177A;

•

The taxpayer received a tax benefit in each of the 2012 and 2013 income years. In respect of the 2013 income year, this conclusion was strengthened by the application of subsection 177CB(4).

The Court concluded that a party entered into or carried out the 2013 related scheme for the dominant purpose of enabling the taxpayer to obtain a tax benefit. However, it found there was no such purpose in respect of the 2012 related scheme.

Additionally, the Court observed that following the 2013 amendments to Part IVA and introduction of section 177CB, it may not have regard to a higher tax cost of implementing an alternative postulate, in determining what might reasonably have occurred in the absence of the scheme.

At the time of test case funding being approved, section 100A and in particular subsection 100A(13) had not been subject to significant recent judicial analysis. Further, the observations in the first instance decision on the operation of the purpose test in subsection 100A(8) and the meaning of 'ordinary family or commercial dealing' in subsection 100A(13) did not fully align with the Commissioner's draft public advice and guidance (PAG) in TR 2022/D1 on what agreements would be subject to section 100A.

Additionally, section 177CB had not previously been applied in any court or tribunal decisions. This case provided a precedent on the application of section 177CB to post-2012 Part IVA arrangements. It was thought that it may provide a precedent on whether or to what extent these provisions impact on the application of RCI Pty Limited v Commissioner of Taxation (RCI) [2011] FCAFC 104 to Part IVA schemes. Unlike in RCI however, the taxpayer did not seek to contend that nothing would have happened in the 2013 income year absent the scheme.

The Commissioner issued a Decision Impact Statement on 24 April 2023.

•

The Commissioner's contention focused on the word "supply" whereas the concept employed in s75-5(1) is a "taxable supply of real property";

•

The gateway to Division 75 is a taxable supply of real property. Once a taxable supply of real property has been identified, there is no further need to embark on an inquiry as to whether the supply is a component of another supply;

•

The terms of s 75-10 direct attention to the individual freehold interest, noting in particular the language in s 75-10(2) "the interest, unit or lease in question";

This interpretation is consistent with other provisions in Div 75, such as s 75-16 and s 75-22, which are drafted by reference to the supply of the particular freehold interest. It would be a distortion of the language of the provisions as a whole to read the singular as encompassing the plural.

Where spouses purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them only, should it be inferred in the absence of evidence to the contrary that it was intended that each the spouses would have a one-half interest in the property regardless the amounts contributed by them?

The High Court held that the presumption of resulting trust will not arise where there is evidence from which it may be inferred that the parties' objective intention is inconsistent with the person providing the purchase money obtaining an interest in a property. Here, the inference to be drawn from the facts was that the parties objectively intended for Ms Bosanac to be the sole beneficial owner of the property, and Mr Bosanac was merely facilitating her acquisition of the same.

At the time of test case funding being approved, section 100A and in particular subsection 100A(13) had not been subject to significant recent judicial analysis. Further, the observations in the first instance decision on the operation of the purpose test in subsection 100A(8) and the meaning of 'ordinary family or commercial dealing' in subsection 100A(13) did not fully align with the Commissioner's draft public advice and guidance (PAG) in TR 2022/D1 on what agreements would be subject to section 100A.

Additionally, section 177CB had not previously been applied in any court or tribunal decisions. This case provided a precedent on the application of section 177CB to post-2012 Part IVA arrangements. It was thought that it may provide a precedent on whether or to what extent these provisions impact on the application of RCI Pty Limited v Commissioner of Taxation (RCI) [2011] FCAFC 104 to Part IVA schemes. Unlike in RCI however, the taxpayer did not seek to contend that nothing would have happened in the 2013 income year absent the scheme.

1.

Does a disclaimer of a gift render the gift void ab initio for all purposes?

2.

Where a beneficiary of a trust disclaims a distribution after an income year, is it nevertheless the case that the beneficiary was "presently entitled" to the distribution at all material times for the purposes of s 97(1) of the Income Tax Assessment Act 1936 (Cth) ( 1936 Act )?

3.

Does s 97(1) of the 1936 Act operate on the facts as they are at the end of the year of income, or can s 97(1) be applied or disapplied by events occurring after the end of the year of income?

4.

What was the nature of the beneficiary's interest in the income of the trust estate prior to their disclaimer?

The Commissioner issued a Decision Impact Statement on 10 June 2022.

Those "same circumstances" to be considered cannot include being or not being the holder of a working holiday visa, because that status depends on nationality. The taxpayer was an Australian resident for tax purposes but was subject to working holiday maker tax rates. However, an Australian national deriving taxable income from the same source during the same period would have been taxed at a lower rate. As the higher more burdensome taxation was imposed on the taxpayer because of her working holiday maker status it was regarded as being imposed due to her nationality and for that reason, contravened Article 25(1) of the DTA. The taxpayer should have been given the same treatment as a resident Australian national in the same circumstances, that is the lower amount of tax should have been imposed.

The case had the potential to establish principles of law that go beyond the working holiday maker provisions, particularly in relation to the operation of the non-discrimination clause in those of Australia's tax treaties that include it.

The Commissioner issued a decision impact statement on 17 December 2021.

1.

by adducing evidence suggesting that all or part of the Commissioner's methodology in making an assessment may have been flawed; and

2.

by adducing evidence that the Commissioner may have been mistaken as to relevant facts when making an assessment.

1.

Did the applicant have an Australian Business Number (ABN) on 12 March 2020 for the purposes of s 11(6) of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2000) ('the Rules'); being a criterion for establishing his eligibility to JobKeeper payments?

2.

If not, does the Administrative Appeal Tribunal (AAT) have jurisdiction to review the Commissioner's "later time" discretion ('the discretion') to allow a later time for the Taxpayer to hold an ABN (ss11(6) of the Rules)?

3.

If so, should the discretion be exercised in the applicant's circumstances?

On the first issue, their Honours held that the requirement in subsection 11(6) of the Rules that an entity "had an ABN on 12 March 2020" should be construed as a point-in-time requirement. That is, a request that an inactive ABN be reinstated and backdated to before 12 March 2020 will not be effective in meeting the requirements of subsection 11(6). The appropriate enquiry is, 'if one had inspected the Australian Business Register on 12 March 2020, would the entity be recorded as holding an ABN?'

For the second issue, their Honours held that the exercise of the discretion forms part of a single entitlement decision rather than standing alone as a separate decision. Accordingly, the Commissioner's decision not to exercise the discretion could be objected to under section 13 of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, as it formed part of the reviewable decision in respect of entitlement to JobKeeper payments. The AAT is empowered to review objection decisions made by the Commissioner about entitlement decisions, encompassing the exercise of the discretion.

In relation to the third issue, the Court decided that the Tribunal did not err in exercising the discretion in subsection 11(6) to allow the Respondent a later time to have an ABN. The Court concluded that the discretion is constructed broadly according to its terms and its exercise is confined only by statutory purpose and context.

It should be noted that, while the Court did not find error in the Tribunal's decision that the discretion should be exercised in relation to the current applicant, it does not follow that the discretion should be exercised in all cases.

The ATO issued a Decision Impact Statement in relation to this decision on 29 April 2021.

1.

Has an entity made a taxable supply in a tax period that applied to it that started on or after 1 July 2018 and ended before 12 March 2020 (as required under paragraph 5(6)(a) of the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020) where:

a.

an individual carrying on a business prior to December 2019 restructures the business to operate through the entity, which was created on 17 January 2020

b.

the entity was registered for GST on a quarterly basis effective from 20 January 2020, and

c.

the entity made its first taxable supplies in January 2020?

The Tribunal further held that activities of the business conducted by another entity prior to incorporation were not relevant in determining whether the corporate entity made taxable supplies in the required period. As a matter of law, business activities carried on by the company are separate and distinct from the activities carried on by the individual as a sole trader.

The Tribunal commented in obiter that the requirement to notify the Commissioner of taxable supplies for current purposes is not expressly tied to the statutory requirement that a return or Business Activity Statement be lodged.

Two of the decisions, Burns and Walker, concerned the taxation of invalidity benefits paid from the Military Superannuation and Benefits Scheme (MSBS) and the third, Douglas, concerned the taxation of invalidity benefits paid from the Defence Force Retirement and Death Benefits Scheme (DFRDBS).

The matter raised a significant number of issues for consideration. Central to all was whether the invalidity benefits received by the taxpayers should be taxed as superannuation income stream benefits or superannuation lump sums.

Three primary issues were identified for resolution (resolution of the other issues turned on the resolution of these issues):

1.

Whether subregulation 995-1.01(2) of the Income Tax Assessment Regulations 1997 (ITAR), as it was prior to the Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2018 (2018 amendments), properly prescribed 'superannuation benefits' for the purposes of the definition of 'superannuation income stream benefit' in subsection 307-70(1) of the Income Tax Assessment Act 1997 (ITAA);

2.

Whether the invalidity benefits paid to Burns and Walker were a superannuation income stream as defined in subregulation 995-1.01(1) of the ITAR. A sub-issue for Burns was whether the invalidity benefits paid to him were a superannuation income stream that commenced to be paid before 20 September 2007.

3.

Whether the invalidity benefits paid to Douglas were a superannuation income stream as defined in subregulation 995-1.01(1) of the ITAR. A sub-issue was whether the invalidity benefits paid to him were a superannuation income stream that commenced to be paid before 20 September 2007.

If the invalidity benefits were found not to be superannuation income streams the payments would not be superannuation income stream benefits and would be superannuation lump sum benefits under section 307-65 of the ITAA.

In relation to issue 1, the Court raised concerns about the drafting of the definition of 'superannuation income stream benefit' in the ITAR as it read prior to the 2018 amendments, but held that the definition did properly prescribe superannuation benefits for the purposes of section 307-70 of the ITAA.

In relation to issue 2, the Court held that the invalidity benefits satisfied the definition of pension in section 10 of the Superannuation Industry (Supervision) Act 1993 (SISA), but that the rules of the MSBS do not satisfy the standards set out in subregulation 1.06(2) and subparagraph 1.06(9A)(b)(iii) of the Superannuation Industry (Supervision) Regulations 1994 (SISR) because they do not ensure the invalidity benefits are payable for the lifetime of the recipient.

Accordingly, the Court held that the invalidity benefits paid to Walker, which commenced to be paid after 20 September 2007, were not a superannuation income stream as they did not satisfy the requirements of subparagraph (a)(ii) of that definition in subregulation 995-1.01(1) of the ITAR.

Hence, the invalidity benefits paid to Walker are superannuation lump sums. However, the Court held that the invalidity benefits paid to Burns were a pension that commenced before 20 September 2007 and, hence, were a superannuation income stream as they satisfied the requirements of subparagraph (b)(i) and (ii) of that definition in subregulation 995-1.01(1) of the ITAR. Hence the invalidity benefits paid to Burns are superannuation income stream benefits.

In relation to issue 3, the Court held that the invalidity benefits satisfied the definition of pension in section 10 of the SISA but the rules of the DFRDBS did not satisfy the standards of subregulation 1.06(2) and subparagraph 1.06(9A)(b)(iii) of the SISR because they do not ensure the invalidity payments are paid annually for the person's lifetime.

The Court further held that the invalidity benefits paid to Douglas were not a pension that commenced before 20 September 2007.

Accordingly, the Court held that the invalidity benefits were not a superannuation income stream as they did not satisfy the requirements of subparagraph (a)(ii) or (b)(i) and (ii) of that definition in subregulation 995-1.01(1) of the ITAR.

Hence, the invalidity benefits paid to Douglas are superannuation lump sums.