November 2024 Monthly Tax Update

In the November 2024 edition of Andersen in Australia’s Monthly Tax Update, we provide recent legislative updates and outline the latest developments in the areas of corporate tax, individual tax, indirect tax and international tax. We also examine the ATO’s recent activities, publications, rulings and other guidelines and discuss the latest Australian tax cases.

Key Sections

Legislation Updates

Bill to increase penalty unit now law

Crimes and Other Legislation Amendment (Omnibus No 1) Bill 2024 received assent as Act No 93 of 2024 on 24 October 2024.

This Bill was introduced to increase the penalty unit value for Commonwealth criminal offences. from $313 to $330.

Sch 3 to the Bill increases the value of the penalty unit for Commonwealth criminal offences. The amount also applies to civil penalty provisions by operation of the Acts Interpretation Act 1901 (Cth) (the definition of “penalty unit” is defined in s 2B of that Act).

The increase took effect from 7 November 2024 and will apply to offences committed on or after that date (i.e., 14 days after assent — see s 2 and Sch 3).

The existing indexation mechanism, which automatically increases the value of the penalty unit every three years in line with the Consumer Price Index, will remain in place. The next indexation is scheduled to occur on 1 July 2026.

Mergers and acquisitions reform bill introduced

Legislation which proposes to replace Australia’s current approach to merger control with a system that addresses anti-competitive mergers and acquisitions, has been introduced in the House of Representatives and referred to the Senate Economic Legislation Committee for inquiry on 5 November 2024.

The Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 seeks to:

• introduce a requirement for certain acquisitions of shares or assets to be notified to the Commission for assessment prior to completion, with penalties to support compliance;
• establish a new administrative system where the Commission will undertake an economic and legal assessment of whether the acquisition is likely to substantially lessen competition in a market, or is of public benefit;
• streamline the assessment of mergers and acquisitions with clear suspensory timelines;
• promote integrity and good decision-making by providing for review of Commission decisions by the Tribunal;
• enhance transparency through establishment of a public register of notified acquisitions and other procedural safeguards; and
• provide that fees are payable for certain actions under the reforms.

IGTO powers to be enhanced under Robodebt Bill

A Bill has been introduced to strengthen and modernise the oversight powers of the Commonwealth Ombudsman and Inspector-General of Taxation and Taxation Ombudsman (IGTO).

The Oversight Legislation Amendment (Robodebt Royal Commission Response and Other Measures) Bill 2024 contains amendments to the Inspector-General of Taxation Act 2003 to:

• impose a statutory duty on agency heads and their staff to use their best endeavours to assist the IGTO in the performance of their functions
• enhance the IGTO’s powers to obtain full, free and direct access to agency records by introducing a provision equivalent to s 33(3) of the Auditor-General Act 1997, requiring agencies to provide all reasonable facilities and assistance, and
• provide the IGTO with a power to obtain access to documents and other records by remote means, with a corresponding requirement for agencies to provide reasonable facilities and assistance to the IGTO in the exercise of this power.

The Bill also introduces additional amendments to the Ombudsman Act 1976, aimed at enhancing the powers and capabilities of the Commonwealth Ombudsman.

The Bill implements the government’s response to recommendations 21.1 and 21.2 from the Report of the Royal Commission into the Robodebt Scheme. These recommendations are intended to ensure that Commonwealth agencies are subject to stronger and more rigorous scrutiny.

The Bill also makes other amendments to the Ombudsman Act 1976 in relation to the powers and capability of the Commonwealth Ombudsman.

The Bill implements the government’s response to recommendations 21.1 and 21.2 of the Report of the Royal Commission into the Robodebt Scheme. These recommendations aim to ensuring Commonwealth agencies are subject to stronger and more rigorous scrutiny.

The amendments will apply to any investigations on foot after commencement of the Bill.

For further information, please refer here.

Other Legislation Update

Government issues response to merger reforms consultation

Following the introduction of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024, the Federal Government has released its response to consultation on reforms to Australia’s merger rules.

The Merger reform for a more competitive economy: Government response to consultation report explains the Government’s updated merger reform policy, provides its response to stakeholder feedback, and delivers an update on its proposed notification thresholds.

Following consultation, the Government has announced that there will be general notification thresholds that apply, in conjunction with additional targeted notification requirements that capture other high-risk acquisitions.

Treasury will consult further on the notification thresholds through the development of subordinate legislation later in 2024–25.

For further information, please refer here.

Digital ID Rules made

Rules to support the implementation of the Digital ID Rules 2024 (the Rules) have been established. The Rules aim to provide individuals with secure, convenient, voluntary, and inclusive methods to verify their identity for use in online transactions with both government and businesses.

The Rules are designed to establish a robust and effective legal framework governing the Australian Government Digital ID System (AGDIS), its participants, and their obligations as approved to operate within the system. Specifically, the Rules provide details on:

• fit and proper person considerations relevant to accreditation and participating in the AGDIS,
• requirements for participating in the AGDIS,
• record keeping obligations for certain entities, and
• arrangements relating to the notification and management of cyber security and digital ID fraud incidents that have occurred in relation to the AGDIS, including information sharing powers for the System Administrator.

The Rules also outline specific obligations and conditions for accredited entities regarding the use or display of the specified image of Australia’s Digital ID Accreditation Trustmark (the digital ID trustmark), as set out in Chapter 8 of the Digital ID Act.

Entities have been accredited to provide digital ID services since 2019 under the Australian Government’s Trusted Digital Identity Framework (TDIF) arrangements, commonly known as the TDIF pilot accreditation program. The unlegislated Australian Government Digital ID System (AGDIS) has also been operational since 2019 for government services. TDIF participating entities and relying parties have had the option to transition to the legislated AGDIS under the Digital ID Act. The mechanism for this transition is outlined in the Digital ID (Transitional and Consequential Provisions) Act 2024, along with supporting rules.

Upon the commencement of the Digital ID Act and the Rules, only public sector entities will be eligible to participate in the AGDIS. Additional rules and standards may be required to enable private sector participation in the AGDIS within two years of the Act’s commencement. These could address issues such as redress, interoperability, charging, dispute resolution, liability, and the holding of information outside Australia (data localisation).

Regulations to expand whistleblower information sharing to tax regulators registered

The Federal Government has registered a legislative instrument that allows tax system regulators to share whistleblower information, facilitating more effective regulatory responses to suspected breaches of the law.

The Taxation Administration Amendment (Extending Tax Whistleblower Protections) Regulations 2024 amends the existing tax whistleblower framework by designating the Inspector-General of Taxation (IGT), the Tax Practitioners Board (TPB), and the Australian Charities and Not-for-profits Commission (ACNC) under paragraph 14ZZW(2)(d) of the Taxation Administration Act 1953 (TAA).

Paragraph 14ZZW(2)(d) of the TAA allows the Taxation Administration Regulations 2017 (TAR) to prescribe a person or body to whom the confidentiality protections of paragraph 14ZZW(1) do not apply in relation to a whistleblower’s identity.

In addition, the 2024 Regulations amend the Taxation Administration Regulations 2017 (TAR) by designating the Inspector-General of Taxation (IGT) under paragraph 14ZZV(1)(d) of the Taxation Administration Act 1953 (TAA) as an eligible recipient. This allows whistleblowers to be protected when they make disclosures to the IGT under section 14ZZT(2).

DGR endorsement guidelines for community charities

Treasury has released draft guidelines that apply to deductible gift recipients (DGRs) under the community charity categories.

According to the Taxation Administration (Community Charity) Guidelines 2024, prior to the amendments made to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 (amending Act) community charity trusts and community charity corporations did not fit neatly into any of the DGR categories.

This was due to the fact that a charity’s activities could fall under multiple DGR categories, and some activities might extend beyond those categories. The specific listing process created integrity risks, which were further compounded by the lack of compliance mechanisms, aside from the option of de-listing.

According to Treasury, the guidelines outline requirements for:

• governance;
• record keeping; and
• allowed activities.

Consultation closes on 3 December 2024.

For further information, please refer here.

Other Updates

Proposed changes to repayments and a one-off reduction for the HELP and other student loans

The government has announced changes to the repayment system, including an increase in the amount people can earn before they are required to start repaying their loan. Additionally, there will be a one-off reduction for the Higher Education Loan Program (HELP) and other student loan schemes.

The minimum repayment threshold is proposed to increase from $54,435 in 2024–25 to $67,000 in 2025–26. Under the new system, HELP repayments will be calculated only on income above the new $67,000 threshold, rather than being based on total annual income. The proposed repayment thresholds and estimated compulsory repayment amounts are outlined in a factsheet (please refer here). These changes are expected to take effect from 1 July 2025.

The government also announced a one-off 20% reduction on all student loan debts. The ATO will automatically apply this reduction before indexation is applied to outstanding HELP balances on 1 June 2025, which is the usual timing for annual indexation. Please refer here for further details.

Amendments to the Higher Education Support Act 2003 and other relevant legislation will be introduced to give effect to the above.

Draft information sheets on obligations under the expanded Code

The Tax Practitioners Board (TPB) has issued draft information sheets on the recently expanded Code of Professional Conduct (the Code).

The Code was recently expanded by the Tax Agent Services (Code of Professional Conduct) Determination 2024 (the Determination), as part of the government’s response to the PwC tax leak scandal. Commencing on 1 August 2024, the Determination was later amended by:

• Tax Agent Services (Code of Professional Conduct) Amendment (Measures No 1) Determination 2024, which provides registered tax practitioners with a transitional period to develop, implement, and update the systems and processes necessary to meet their new obligations. Compliance with the new requirements will be required by 1 July 2025 for smaller tax practitioner firms, and by 1 January 2025 for all other tax practitioner firms.

• Tax Agent Services (Code of Professional Conduct) Amendment (Measures No 2) Determination 2024, which clarifies obligations under sections 15 (regarding false or misleading statements) and 45 (regarding keeping clients informed). The amendment also includes small refinements to sections 20, 25, 30, and 45 to better clarify the intent and scope of these provisions.

On 24 October 2024, the TPB issued the following exposure draft information sheets to assist registered tax practitioners to understand their obligations under the Determination: 

• draft Information Sheet TPB(I) D56/2024 on upholding and promoting the ethical standards of the tax profession under s 10 of the Determination;
• draft Information Sheet TPB(I) D57/2024 on false or misleading statements under s 15 of the Determination;
• draft Information Sheet TPB(I) D58/2024 on managing of conflicts of interest when undertaking activities for government and maintaining confidentiality in dealings with government under ss 20 and 25 of the Determination;
• draft Information Sheet TPB(I) D59/2024 on the obligation to keep proper client records of tax agent services provided under s 30 of the Determination;
• draft Information Sheet TPB(I) D60/2024 on supervision, competency and quality management. This draft proposes amendments to TPB Information Sheet TPB(I) 36/2021 Supervisory arrangements under the Tax Agent Services Act 2009, and
• draft Information Sheet TPB(I) D61/2024 on keeping clients informed under s 45 of the Determination. 

The closing date for submission of comments is 21 November 2024.

For more information, please refer here.

OECD Updates

OECD releases report summarising recent international tax reform developments.

The Organisation for Economic Co-operation and Development (OECD) has released the OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors which sets out recent developments in international tax reform since July 2024.

The report provides an overview on developments in the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, progress made on the implementation of the BEPS minimum standards and tax transparency, as well as updates on tax policy, tax and inequality, and tax administration

For more information, please refer here.

ATO Rulings & Activity

ATO updated changes to FBT exemptions for PHEVs

The ATO has updated its guidance on how fringe benefits tax (FBT) exemptions apply to plug-in hybrid vehicles (PHEVs) from 1 April 2025.

From 1 April 2025, a PHEV will not be considered a zero or low emissions vehicle under FBT law and isn’t eligible for the electric cars exemption, though an employer can continue to apply the exemption if:

• the PHEV was exempt from FBT before 1 April 2025, and
• they have a financially binding commitment to continue providing private use of the vehicle to an employee or their associate on and after 1 April 2025.

According to the ATO, if there is a change to a pre-existing commitment on or after 1 April 2025, the FBT exemption for the PHEV will no longer apply from the date of that change.

For more information, please refer here.

ATO compliance approach to restructures for new thin capitalisation debt deduction creation rules

The ATO has issued its first public guidance on Australia’s new thin capitalisation rules through draft Practical Compliance Guideline PCG 2024/D3. This draft guideline is designed to provide a framework for assessing the risk of anti-avoidance provisions being applied to restructures made in response to the changes in the thin capitalisation rules. The draft PCG outlines areas where the ATO is likely to focus its review efforts, with risk assessment categories ranging from white (no further risk assessment required) to red (high risk), along with corresponding examples.

This draft guideline has been prepared following the passage of the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Act 2024 (the Act) on 8 April 2024. The Act introduces new thin capitalisation rules under Division 820 of the Income Tax Assessment Act 1997 (ITAA 1997), along with the debt deduction creation rules (DDCR) in Subdivision 820-EAA of the ITAA 1997.

The draft PCG currently only addresses compliance risks associated with restructures in response to the debt deduction creation rules (DDCR). It will be updated in the future to include a new schedule that covers restructures resulting from other changes to the thin capitalisation rules.

The draft PCG also offers some limited guidance on the records and evidence a taxpayer must maintain to determine whether the DDCR applies to their arrangements. Importantly, the ATO stresses that the burden of proof is on the taxpayer to demonstrate that the DDCR does not apply. Furthermore, the ATO does not view it as appropriate to restrict its compliance activities to only more recent transactions.

When finalised, the guideline will apply to restructures entered into on or after 22 June 2023 (being the date that the thin capitalisation amending Bill was introduced into Parliament).

The guideline may be updated as the ATO’s engagement with taxpayers and compliance activity increases throughout implementation of the Act. Comments on the draft guideline closed 8 November 2024.

Deliberate and targeted approach to collect unpaid tax and super

The ATO is adopting a focused and strategic approach to collect unpaid tax and superannuation from businesses that refuse to engage with them and continue to ignore previous attempts at contact, such as SMS and letter reminders. Specifically:

• for businesses that do not engage with the ATO or set up a payment plan for unpaid GST, pay as you go (PAYG) withholding or employee super – the ATO will move more quickly to firmer actions such as issuing Director Penalty Notices (DPNs) and garnishees; and
• directors of multiple companies who allow amounts of GST, PAYG withholding and employee super to go unpaid, and do not engage with the ATO – the ATO is expected to look at their debts more “holistically”. These directors can expect to receive Director Penalty Notices (DPNs) for the full amount of unpaid tax and superannuation across all related entities. If they fail to take action, the ATO has the authority to recover these amounts directly from the directors, potentially putting their personal assets at risk.

For further information, please refer to the ATO website.

Changes recommended to ATO’s objections administration and management

The Inspector-General of Taxation (IGTO) has published a report recommending changes to streamline the process, making it faster and easier for all taxpayers to lodge an objection with the ATO.

An objection is a statutory right to request an internal review of an assessment or decision of the Commissioner of Taxation.

The report highlights 4 areas of improvement:

• Increase accessibility by expanding online lodgement to all taxpayers. Currently, unrepresented individual taxpayers and professionals who are not registered tax agents are unable to lodge objections electronically. Instead, they must use paper forms, which are either mailed or faxed. The report recommends that the ATO prioritise the “Optimising Disputes” project to create an online channel, allowing both taxpayers and tax professionals to lodge objections electronically.

• Streamline processes to reduce the time and resources spent on high-volume, low-risk objections. Currently, around 55% of objections are self-initiated and not prompted by any ATO action. The report recommends that the ATO explore options to more efficiently handle self-initiated objections, particularly those lodged to seek amendments to prior lodgements that are out of time, of low value, or pose low risk to revenue.

• Increase taxpayer engagement to speed up the resolution of objections, especially in cases involving default assessments or covert audits. The report recommends that the ATO review options for administratively reconsidering audit decisions or assessments that were finalised without giving the taxpayer an opportunity to engage.

• Learn from objections to reduce the number of objections required. The review found that a significant portion of disputes that progress to objections could have been avoided with better engagement and information exchange between the ATO and the taxpayer during the audit process. The report recommends that the ATO further develop its structured feedback framework between the objections function and all business lines to share insights and lessons learned from objection cases, both at the individual case level and on a broader systemic level. It also suggests monitoring the impact of these improvements over time.

The report on objections finalises a review that has been conducted over several years, including the publication of an interim report on 10 October 2022.

The ATO agrees with all the recommendations, either fully, partly, or in principle, noting that some of its responses are influenced by organisational priorities and limited resources.

For further information, please refer here.

Replacement draft GST determination on food marketed as a prepared meal

The ATO has withdrawn draft GSTD 2024/D1 (originally issued in March 2024) and replaced it with a revised draft determination, GSTD 2024/D3. This new draft determination outlines the ATO’s view on the circumstances in which a supply of food is not GST-free under paragraph 38-3(1)(c) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), specifically when the food is marketed as a prepared meal, but not including soup.

The draft Determinationconsiders what products are food of a kind marketed as a prepared meal and hence not GST-free under s 38-3(1)(c) of the A New Tax System (Goods and Services Tax) Act 1999 as specified in the third column of the table in cl 1 of sch 1, particularly table item 4. The guidance has been issued in light of the Federal Court decision in Simplot Australia Pty Ltd v FC of T 2023 ATC ; [2023] FCA 1115, which considered the GST treatment of a range of frozen food products supplied or imported by the taxpayer.

The draft Determination clarifies that salads are a broad category of food, which includes both products marketed as prepared meals and those that are not. Generally, salad products marketed as prepared meals contain a variety of ingredients, a balanced proportion of these ingredients, and a sufficient overall quantity to constitute a meal. These types of salads are typically marketed as complete meals intended to be eaten on their own. In contrast, salads lacking variety and a balance of ingredients are less likely to be considered food marketed as a prepared meal. The revised draft determination also provides a method statement and compliance approach for salad products. Additionally, it proposes the inclusion of new entries for specific, readily recognisable categories of salad products in the Detailed Food List.

The replacement draft determination also includes a few minor additions, such as further clarification of the “common sense and common experience” test.

When finalised, the determination is proposed to apply both before and after its date of issue.

Comments on the replacement draft determination close on 15 November 2024.

Practice statements updated in line with ATO style and accessibility requirements

The ATO has updated the following practice statements in line with ATO style and accessibility requirements:

• Practice Statement Law Administration PS LA 2002/11 Escalation of issues concerning fixed entitlements to a share of the income or capital of a trust.
• Practice Statement Law Administration PS LA 2007/24 Making default assessments: section 167 of the Income Tax Assessment Act 1936. This practice statement has also been amended to, among other things, update examples, discuss recent judicial decisions, and include additional footnotes and references. There is also a new paragraph in s 5 regarding deductions when an indirect audit methodology is used and GST credits when making a default GST assessment.
• Practice Statement Law Administration PS LA 2011/3 Compromise of undisputed tax-related liabilities and other amounts payable to the Commissioner.
• Practice Statement Law Administration PS LA 2011/15 Lodgment obligations, due dates and deferrals. The example in para 57 of this practice statement has also been updated for currency.
• Practice Statement Law Administration PS LA 2020/3 Self-managed superannuation funds – administrative penalties imposed under subsection 166(1) of the Superannuation Industry (Supervision) Act 1993.
• Practice Statement Law Administration PS LA 2008/3 (GA) in line with current ATO style and accessibility requirements.
• Practice Statement Law Administration PS LA 2011/6 Risk management in the enforcement of lodgment obligations and debt collection activities.
• Practice Statement Law Administration PS LA 2017/2 Diverted profits tax assessments – Content checked for technical accuracy and currency. Updated in line with current ATO style and accessibility requirements. 
• Practice Statement Law Administration PS LA 2006/17 Self-managed superannuation funds – disqualification of individuals to prohibit them from acting as a trustee of a self-managed superannuation fund, which outlines the circumstances in which ATO staff can consider disqualifying an individual and thereby prohibit them from acting as a trustee of a self-managed superannuation fund.
• Practice Statement Law Administration PS LA 2006/7 Alternative assessments, to explain the use of alternative assessments in respect of the same income, benefit or transaction for one or more taxpayers.
• Practice Statement Law Administration PS LA 2007/3 Remission of penalty for failure to comply with requirements in relation to tax invoices, adjustment notes or third party adjustment notes, to set out the guidelines for the remission of penalty.
• Practice Statement Law Administration PS LA 2010/1 Approach to cases involving Division 6 (trust income) of the Income Tax Assessment Act 1936, to set out how to approach compliance activities involving Div 6 of ITAA 1936. 
• Practice Statement Law Administration PS LA 2011/4 Collection and recovery of disputed debts, containing guidelines for managing the collection and recovery of disputed debts. This practice statement has also been updated to reflect the change from the Administrative Appeals Tribunal to the Administrative Review Tribunal. 

The content of each of the above practice statements has been checked for technical accuracy and currency. 

Class rulings issued

Issue No.1	Class Ruling CR 2024/63 Civmec Singapore Limited – exchange of shares for Civmec Limited shares. This ruling applies from 1 July 2024 to 30 June 2025.
Issue No.2	Class Ruling CR 2024/64 Civmec Singapore Limited – employee share scheme – replacement of performance rights. This ruling applies from 1 July 2024 to 30 June 2025.
Issue No.3	Class Ruling CR 2024/65 Prospa Group Limited – scheme of arrangement. This ruling applies from 1 July 2024 to 30 June 2025.
Issue No.4	Class Ruling CR 2024/66 Base Resources Limited – scrip for scrip roll-over and special dividend. This ruling applies from 1 July 2024 to 30 June 2025.
Issue No.5	Class Ruling CR 2024/67 Royal Australian Navy – compensation for non-performance of training contract. This ruling applies to the income year in which compensation was received by claimants.
Issue No.6	Class Ruling CR 2024/68 Navman Wireless Australia Pty Limited – use of FTC Manager for fuel tax credits. This ruling applies to taxable fuel acquired on or after 1 July 2024 to 30 June 2026.
Issue No.7	Class Ruling CR 2024/69 WEB Travel Group Limited – demerger of Webjet Group Limited. This ruling applies from 1 July 2024 to 30 June 2025.
Issue No. 8	Class Ruling CR 2024/70 Kalamazoo Resources Limited – return of capital by in-specie distribution of shares in Kali Metals Limited. This ruling applies from 1 July 2023 to 30 June 2024.
Issue No. 9	Class Ruling CR 2024/71 Department of Energy, Environment and Climate Action – Victorian Forestry Transition Program. This ruling applies from 1 February 2023 to 30 June 2028.

Other rulings issued

Issue No.1	Product Ruling PR 2024/18 Navman Wireless Australia Pty Limited and FTC Manager – FTC Self Claim level clients. This ruling applies to taxable fuel acquired on or after 1 July 2024 by the class of entities that enter into the scheme for the fuel tax credit results from the FTC Manager telematics and technology product from 1 July 2024 until 30 June 2026.
Issue No.2	Addendum to Product Ruling PR 2022/10 Swiss Life (Singapore) Pte. Ltd. Life Asset Portfolio Universal Asia. The addendum applies both before and after its date of issue.
Issue No. 3	Addendum to Product RulingPR 2023/22 Swiss Life (Singapore) Pte. Ltd. Alpha Plus Variable Universal Life. The addendum applies both before and after its date of issue.
Issue No. 4	Addendum to Product Ruling PR 2023/24 Allianz Guaranteed Income for Life. The addendum applies both before and after its date of issue.
Issue No. 5	Addendum to Taxation Ruling TR 2004/4 Income tax: deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activities. The addendum substitutes the reference to Draft Taxation Ruling TR 2021/D5 with Taxation Ruling TR 2023/3. This addendum applies from 27 September 2023.

Latest Australian Tax Cases

• Assessable income – The taxpayers have appealed to the Full Court against the Federal Court decision reported as Youssef v FC of T [2024] FCA 1154]. The case dealt with the issue of amended assessments by the Commissioner in relation to substantial unexplained deposits in the taxpayers’ accounts. The AAT (at [2023] AATA 3493) had found that the taxpayers failed to establish what their assessable income should have been, concluding that it was unable to identify the extent to which the deposits were gambling profits, as contended by the taxpayers. Their first appeal was dismissed by the Federal Court having found no error in the Tribunal’s decision. [Youssef v FC of T [2024] FCA 1154].]

• Royalty withholding tax – The Federal Court has refused to grant Oracle Australia a temporary stay in its dispute with the ATO involving royalty withholding tax and software distribution arrangements, citing public interest reasons. [Oracle Corporation Australia Pty Ltd v Commissioner of Taxation Stay Application; [2024] FCA 1262, 31 October 2024.]

• Interest deduction – The High Court has refused the taxpayer’s application for special leave to appeal against the decision in Singapore Telecom Australia Investments Pty Ltd v FC of T 2024 ATC ¶20-897; [2024] FCAFC 29. In that case, the Full Federal Court dismissed the Australian subsidiary of SingTel’s appeal against Federal Court decisions denying interest deductions and a carry forward loss deduction. In Singapore Telecom Australia Investments Pty Ltd v FC of T 2021 ATC; [2021] FCA 1597, interest deductions of $894 million arising from a related party loan arrangement were denied for the 2011, 2012 and 2013 income years on the basis that the taxpayer had obtained a transfer pricing benefit under ITAA 1997 s 815-15(1). The court ruled in subsequent proceedings that concerned the form of final orders and costs relating to the 2021 decision (at 2022 ATC; [2022] FCA 260) that the taxpayer was not entitled to a carry forward loss deduction of $259 million in 2011 relating to earlier income years. [Singapore Telecom Australia Investments Pty Ltd v FC of T 2024 ATC ; [2024] FCAFC 29.]

• Superannuation – The AAT has held that a genuine and honest mistake made by an experienced legal practitioner as to the application of provisions relating to the non-concessional contributions cap could not be elevated to the status of “special circumstances” to warrant an excess concessional contributions determination under s 292-465 of ITAA 1997. [BVZH v FC of T [2024] AATA 3618, 10 October 2024.]