Jenny Doyle

🇦🇺💡🌏 Royalty Withholding Tax - Topical Australian Issues Here is a recap on some of the topical RWT issues at the moment, with the Pepsi appeal heard and undecided and the Budget announcement of a new penalty from FY27. 🔎 Legal analysis. The ATO's approach in its draft software ruling TR 2024/D1 confirms that it looks closely at what IP rights are being used by AU entities. It involves a deep dive on the relevant area of law (copyright, patents, trademarks, etc). There are some public responses to the ATO’s draft ruling about copyright law which make for interesting reading. 🌏 Transfer pricing overlay. Where an AU entity has no license for the kind of IP rights mentioned above, but it is dealing with a related party, the question becomes whether it would be expected to have a license in place if it was dealing with a third party. This is a different question to the third party scenario, such as Pepsi / Schweppes. Or is it? 🧐 Use of know how. AU's tax treaties cover RWT for the obvious IP uses such as copyright, patents and trademarks, but often also cover the use of commercial knowledge or information. That might capture all kinds of information shared by a MNE HQ with its subsidiaries. Working out how much the information is worth is obviously difficult. ⚠️ Countries with no AU tax treaty. The consequences of RWT are way more significant for countries without a tax treaty with AU, with RWT at 30%. Most notable are 🇭🇰Hong Kong and 🇧🇷Brazil (but no longer 🇮🇸Iceland!). 🏭 Little bit of manufacturing in AU. Often manufacturing to some degree in AU triggers the need for the AU entity to use valuable IP, and therefore RWT. The Pepsi case involves significant manufacturing, with Schweppes making bottled products using concentrate, a recipe and trademarks. The resulting royalty was 16% of the payments purportedly made for concentrate only. It will be interesting to see how this plays out where the AU entity does some work on the goods, but not as much (e.g. labelling only). The comparability analysis might be more difficult. #taxlaw #royalties #transferpricing #internationaltax #withholdingtax

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The TPB has released draft guidance on the new breach reporting (‘dob-in’) obligations for registered tax practitioners, effective 1 July 2024. Broadly, these new obligations require registered tax practitioners to notify the: • TPB if they have reasonable grounds to believe that they have significantly breached the Code of Professional Conduct (‘the Code’); or • TPB and the relevant Recognised Professional Association (‘RPA’) if they have reasonable grounds to believe another registered tax practitioner has significantly breached the Code. TPB(I) D53/2024 seeks to clarify the scope and process of breach reporting and includes several illustrative case studies for practical understanding. These new registered tax practitioner obligations and this latest TPB guidance will be just some of the critical issues discussed in the NTAA’s upcoming 2024 Tax Schools seminars. You can secure your seat for the NTAA’s 2024 Tax Schools in the link below.

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Managing a self-managed super fund (SMSF) involves many responsibilities, especially meeting the compliance obligations set by the Australian Tax Office (ATO). Understanding these obligations is crucial for trustees, who must stay updated with the latest tax regulations and methodologies changes. This constant need for updates can be overwhelming, making it essential to have reliable information. Our latest blog offers an in-depth look at SMSF compliance requirements, guiding you on what needs to be done to stay compliant and explaining the ATO's procedures for noncompliance. If you are still unsure about compliance, don't worry—Accuratee is here to support you every step. Contact us today, and let's tackle SMSF compliance together. #SMSFCompliance #ATORegulations #SuperFundRules #FinancialCompliance #SelfManagedSuperFunds #Accuratee #accurateeaccountingservices #accurateebookkeepingservices #bookkeepingservices

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This Australian Taxation Office guidance sets out the Commissioner’s final view on the operation of the ‘liable entity’ and ‘hybrid payer’ concepts which impact the application of Australia’s hybrid mismatch rules, as outlined by Peter Oliver, Denis Larkin, Jennifer Ta and Fabian Fedele. #Hybrids #AuTax #TaxNow

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Australian Tax Office flags common errors delaying R&D Tax registrations https://lnkd.in/ge4zSRng Entities registering activities for the R&D tax incentive have been warned on some of the issues delaying applications. The ATO has warned entities on some of the common errors causing delays with applications to register research and development (R&D) activities as it prepares to publish its first transparency report on the Research and Development tax incentive (R&D TI) program. The Department of Industry, Science and Resources (DIRS), that jointly administers the R&D TI program, has identified some of the common errors being made by entities and their representatives during the registration of R&D actitivies. To avoid delays with applications, the ATO said entities must ensure they're applying for the correct income year. "The income year needs to match the income period on the company’s income tax return submitted to us. This can't be amended by a variation," it said. Entities and their representatives should also check that the correct entity is applying to register the R&D activities. "Only the head company of a consolidated or multiple entry consolidated group can apply to register R&D activities," the ATO said. "The head company must register R&D activities performed by any member of the group. This information can't be later amended by a variation." The ATO also stressed the importance of providing correct details for the company representative, not their tax agent or adviser. "The primary contact must be a company representative with their correct email address – not the email for a tax agent, adviser or consultant," it said. "Contact details for agents, advisers and consultants are required elsewhere in the application form. Any amendments made after submission will require you to complete a variation, resulting in a delay in registration." In order to avoid delays with the processing of the company's tax return and R&D schedule with the ATO, the Tax Office reminded entities to check that the AusIndustry – IISA number is correct on the R&D TI schedule and corresponds to the income year of the return. The ATO also noted that the preliminary calculation on the R&D TI schedule must match item 7 label D on the company tax return. Entities should also check that the reporting entity turnover has been correctly calculated and placed under the correct label on the R&D TI schedule. The ATO noted that the annual turnovers of connected and affiliated entities must be included in the calculation of aggregate turnover of the reporting entity. The report will contain information about an entity's total expenditure on R&D and will provide transparency on the benefits derived by companies from the R&D TI and encourage voluntary compliance with the R&D program https://lnkd.in/ge4zSRng

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Australian Tax Office flags common errors delaying R&D Tax registrations https://lnkd.in/ge4zSRng Entities registering activities for the R&D tax incentive have been warned on some of the issues delaying applications. The ATO has warned entities on some of the common errors causing delays with applications to register research and development (R&D) activities as it prepares to publish its first transparency report on the Research and Development tax incentive (R&D TI) program. The Department of Industry, Science and Resources (DIRS), that jointly administers the R&D TI program, has identified some of the common errors being made by entities and their representatives during the registration of R&D actitivies. To avoid delays with applications, the ATO said entities must ensure they're applying for the correct income year. "The income year needs to match the income period on the company’s income tax return submitted to us. This can't be amended by a variation," it said. Entities and their representatives should also check that the correct entity is applying to register the R&D activities. "Only the head company of a consolidated or multiple entry consolidated group can apply to register R&D activities," the ATO said. "The head company must register R&D activities performed by any member of the group. This information can't be later amended by a variation." The ATO also stressed the importance of providing correct details for the company representative, not their tax agent or adviser. "The primary contact must be a company representative with their correct email address – not the email for a tax agent, adviser or consultant," it said. "Contact details for agents, advisers and consultants are required elsewhere in the application form. Any amendments made after submission will require you to complete a variation, resulting in a delay in registration." In order to avoid delays with the processing of the company's tax return and R&D schedule with the ATO, the Tax Office reminded entities to check that the AusIndustry – IISA number is correct on the R&D TI schedule and corresponds to the income year of the return. The ATO also noted that the preliminary calculation on the R&D TI schedule must match item 7 label D on the company tax return. Entities should also check that the reporting entity turnover has been correctly calculated and placed under the correct label on the R&D TI schedule. The ATO noted that the annual turnovers of connected and affiliated entities must be included in the calculation of aggregate turnover of the reporting entity. The report will contain information about an entity's total expenditure on R&D and will provide transparency on the benefits derived by companies from the R&D TI and encourage voluntary compliance with the R&D program https://lnkd.in/ge4zSRng

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🌏💻🐇 ATO Draft Software Ruling - Code and The Matrix When it applied to the High Court last week for leave to appeal in Pepsi, the ATO also announced that it would not finalise its draft software ruling while the High Court process plays out. But where will the rabbit hole take us? ⚠️ The draft software ruling, TR 2024/D1, has the ATO's views on whether arrangements relating to software trigger Australian withholding tax. 🔙 This draft was an update from a 2021 draft, TR 2021/D4. The earlier draft also took a rights-based approach, but the update cut the 6 examples to 2 and removed the "simple use" carve-out which many MNEs would have been clinging to. 🥤 Obviously the Pepsi decision is not about software, but many of the issues in the case will impact the ruling (eg identifying contractual consideration and what it is paid in return for). 🔙🔙 The 2021 draft ruling replaced a 1993 ATO ruling. If the High Court takes on the Pepsi case it will be another 12 months (minimum) for the ruling to be finalised. That’s cold comfort for taxpayers given that Australian WHT has no time limit. 🟢 And so to The Matrix, a movie which (like the software ruling) is all about computer code. The question is - which world will we end up in? The world where Pepsi ultimately wins in the High Court and the software ruling is wound back from its current state? Or is the current state only transient, and after an ATO win in the High Court this ruling will take on a life of its own? 💊 Which pill will it be? With no further appeals, whichever way the High Court goes will be the truth. (And if you think The Matrix came out a long time ago, that was in 1999 and the ATO initial ruling on software which was withdrawn in 2021 came out 6 years before that!) #taxlaw #internationaltax #transferpricing #pepsi #thematrix

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Our latest tax update covers the many ATO updates and activities from September, including: 1. Updates to various Draft Guidances and Practice statements on taxpayer alerts. 2. Several Gazette notices regarding data-matching programs 3. GST Updates and a revised definition of "ATM" We also cover key Australian Tax Cases: 1. Tax Agent Services Act Penalty - violation of the TASA 3,359 times 2. An appeal to the Full Federal Court by Taxpayers regarding unexplained bank deposits Find these updates in full in September's MTU: https://ow.ly/YmFl50TBQKL #UnlockNew #AndersenAustralia #ATO #taxupdate #Australiancases #TaxUpdate

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🚩 Privacy Act Reform 🚩 🌐 On 12 September 2024, the Privacy and Other Legislation Amendment Bill 2024 was tabled in the House of Representatives (https://shorturl.at/v0rJ8). The Bill follows the Attorney-General’s “Privacy Act Review Report”, which contained 116 proposals for reform of Australia’s privacy framework and amendment of the Privacy Act 1988 (Cth)(https://lnkd.in/gm_QVT6D). ✍ If passed, this first tranche of changes would: 1. facilitate information sharing in emergency situations or following eligible data breaches; 2. require the development of a Children’s Online Privacy Code;  3. introduce a statutory tort for serious invasions of privacy; and 4. amend the Criminal Code Act 1995 to introduce criminal offences for menacing/harassing online conduct (‘doxxing’). 👀 Other, more substantive changes, based on the A-G’s report, may feature in future amendment proposals. These include proposals to: ◾ ensure all handling of personal information is ‘fair and reasonable’; ◾ expand opt-out rights for direct marketing and targeted advertising;  ◾ remove information handling exemptions for small businesses; and ◾ give rights to individuals to take direct court action for breaches of the Privacy Act (without applying to the Office of the Information Commissioner). 🤔 Do you think the first tranche of changes goes far enough, considering recent cybersecurity and privacy breaches in Australia? Which of the further proposals would you be eager to see in future reforms? ⚡ Have views on this topic, or other issues in law and tech? Reach out to: [email protected]. We invite article submissions or blog posts on the intersection of Australian law and technology. 📚 Interested in reading more on Australian technology law? Check out our website: https://anujolt.org/ 

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Tax advisors should be mindful of #OperationProtego, which is an ATO-led investigation into large-scale #GSTfraud that was promoted particularly on social media. The attempted fraud involves an individual: 🔺 inventing a fake business; 🔺 lodging a fraudulent Australian business number (ABN) application; and 🔺 submitting fictitious business activity statements (BAS) to attempt to gain a false GST refund. A recent ATO media release details the latest in sentencing for Operation Protego: 🔶 16 October 2024: - A woman has been sentenced to 4 years jail with a non-parole period of 2 years and 4 months, and was ordered to repay $599,349. 🔶 Charges: - one count of obtaining a financial advantage by deception - one count of attempting to obtain a financial advantage by deception. 🔶 Details of the fraudulent GST refund: - The woman registered for both an ABN and for GST in November 2021 for a residential cleaning business. Between November 2021 and March 2022, she lodged fraudulent BAS. - The woman obtained $599,349 in fraudulent GST refunds she was not entitled to and attempted to obtain a further $259,976, which was stopped by ATO officers. For the latest news and further sentences handed down as a result of Operation Protego, see: https://lnkd.in/e3qR52SA ------- Always seek advice specific to your circumstances directly from your appointed professional advisor. #Tax #TaxLawyer #AustralianTax

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IP Australia has updated its practice for calculating and processing excess claim fees. Under the new practice, excess claim fees are payable on the largest number of claims on file, between the issuance of the first examination report and acceptance. To find out when these changes come into effect and how they might impact your organization, read more here: https://ow.ly/6hM350Tl2wt #intellectualproperty #iplaw #patentsanddesigns

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INSIGHT | The Privacy Act’s employee record exemption tested in ALI and ALJ A recent decision from the Office of the Australian Information Commissioner (OAIC) clarifies the operation of the employee records exemption under the Privacy Act and brings into focus the privacy obligations of employers in regard to their employees. Piper Alderman partner Craig Subocz along with JD Hohmann, Lawyer discuss this issue. Read the complete article here: https://lnkd.in/gQA8ZkwC #CyberSecurity #DataProtection #PiperAlderman

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