Australia: Recent court case roundup; Structural reform delayed

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Australia: Recent court case roundup; Structural reform delayed

cridland.jpg

Matthew Cridland

Australia was focussed on state and federal politics in early February, including an upset election result in Queensland. Notwithstanding these distractions, tax developments still continued apace. The Federal Court provided a detailed judgment regarding the tax promoter penalty provisions in FCT v Arnold (No 2). The court imposed penalties of $1.5 million in respect of a pharmaceuticals donations scheme.

In the case of Tara Nominees Pty Ltd as Trustee for the Burnley Street Trust v FCT, the Full Federal Court held that the transfer of land from the taxpayer to a joint venture trust was a "resettlement" that triggered CGT [capital gains tax] event E1. There is a CGT exemption that may apply where there has been no change in beneficial ownership. However, the court also held that particular exemption did not apply.

The Queensland Supreme Court handed down an important stamp duty decision in the case of Sojitz Coal Resources Pty Ltd v Commissoner of State Revenue. The court held that interests in mining leases did not need to be taken into account as a part of a corporation's land holdings for the purposes of land rich duty.

In relation to rulings, the Australian Taxation Office (ATO) finalised its GST Determination on supplies of brokerage services for overseas purchases – GSTD 2015/1. The determination confirms such brokerage services are GST-free, even if the services are supplied to recipients in Australia.

The ATO released its updated Code of Settlement (PSLA 2015/1) which, although streamlined, provides a broad range of options for taxpayers and the ATO to settle issues in dispute. This code is consistent with the recent practice of the ATO to clear a backlog of outstanding disputes with taxpayers.

The Australian Senate Economics Committee enquiry into Corporate Tax Avoidance has been principally focussed on multinationals and international tax planning. The Committee received 69 submissions which reflects an overwhelming level of interest in global tax issues.

Finally, and most importantly, Joe Hockey, the Australian Treasurer, has indicated that major structural reform of the Australian tax system (including a tax white paper/tax reform options approach) will be delayed for a couple of months, being after the release of the government's inter-generational report (IGR). The IGR is expected to emphasise the extent of likely budget deficits over the coming decades if government spending and tax policy is not reshaped. The government's Budget in May 2015 will be critical in establishing the basis for broader structural tax reform thereafter.

Matthew Cridland (matthew.cridland@dlapiper.com)

DLA Piper

Tel: +61 2 9286 8202

Website: www.dlapiper.com

more across site & shared bottom lb ros

More from across our site

New French legislation should create a more consistent legal environment for taxing gains from management packages, say Bruno Knadjian and Sylvain Piémont of Herbert Smith Freehills Kramer
The South Africa vs SC ruling may embolden the tax authority to take a more aggressive approach to TP assessments, an adviser tells ITR
Indirect tax professionals now rate compliance as a bigger obstacle than technology and automation; in other news, Italy approved a VAT cut on art sales
AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Gift this article