The Tax Specialist

Articles from the current issue:

• Chevron and evidential preclusion

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  The Commissioner’s side in the Chevron litigation had a big problem with a key part of their case: the ATO officer who signed the s 136AD determinations had no authority to do so. Did this mean that no valid “determinations” had been made? Or that determinations were made but were somehow “wrong”? Or that the determinations were “correct” but affected by an immaterial “procedural” error? Or, instead, was the error linked with “substantive liability”, as would make it reviewable for quantum in a tax appeal? It is noteworthy that, in administrative law contexts, a decision-maker having no power to make a decision is a very considerable thing, often resulting in invalidity. So how do things stand in the tax arena? It turned out that s 177 was able to work its magic and protect the error from full scrutiny, and accordingly the ATO was spared some embarrassment.

• AMIT regime implementation – where are we at?

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  After some decades of grappling with applying the “old” rules of Div 6 of the Income Tax Assessment Act 1936 to modern-day widely held trusts, industry, at long last, got its wish … on 5 May 2016, the attribution managed investment trust (AMIT) regime was enacted. The AMIT regime is the culmination of a Board of Taxation recommendation for “a separate taxation regime for qualifying MITs” and extensive industry consultation. The regime seeks to codify much of the industry practice and administrative concessions that had to emerge to fit the taxation of managed investment trusts into Div 6. This article considers some key aspects and design features of the new regime and, where appropriate, attempts to bring the regime to life with worked examples.

• Fragmenting the Pt IVA lore applying to stapled structures

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  In TA 2017/1, the Australian Taxation Office expressed concern with “arrangements which attempt to fragment integrated trading businesses in order to re-characterise trading income into more favourably taxed passive income”. Among such arrangements, the ATO singled out stapled security structures, of which it identified four types: financing, rentals, royalties, and synthetics. The Commonwealth Treasury is also currently consulting on the “integrity risks” regarding the use of stapled structures. In that context, this article is concerned with rental stapled structures, and the extent, if any, to which Pt IVA of the Income Tax Assessment Act 1936 might apply to such structures. The author seeks to address what are seen as shortcomings and a lack of analysis in the ATO’s apparent views on the matter, as expressed in its public pronouncements. The article identifies types of rental stapled structures and analyses the possible application of Pt IVA to them.

• Speed dating in the new tax era: the BEPS Convention kicks off

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  Australia, along with 68 other countries or territories, recently signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the BEPS Convention). The BEPS Convention implements action 15 of the BEPS project which proposed a multilateral instrument that would operate automatically to amend and update the bilateral tax treaty network currently in existence to bring certain key provisions of treaties into line with the BEPS agenda. The BEPS Convention may potentially apply to more than 2,000 bilateral tax treaties between countries worldwide. This article introduces the key elements of the BEPS Convention and Australia’s position in signing it. The article sets out the history and context of the BEPS project, outlines the goals, framework and complicated implementation process of the BEPS Convention, and discusses each key element of the BEPS Convention and the Australian Treasury position in respect to it.