Taxation Determination TD 2011/13
This TD specifies that, for the purposes of s 108-85 of the ITAA 1997, the improvement threshold for the 2011/12 income year is $130,418 (up from $126,619 in 2010/11).
Where a pre-CGT asset has had an improvement of a capital nature made to it after 19 September 1985, that improvement may be treated as an asset separate from the pre-CGT asset to which the improvement was made. This will occur if the cost base to the taxpayer of the improvement would exceed the improvement threshold for the income year.
FBT: car parking threshold for 2011
Taxation Determination TD 2011/14
This TD specifies that, for the purposes of s 39A of the FBT Assessment Act, the car parking threshold for the FBT year that commenced on 1 April 2011 is $7.71 (up from $7.46 that applied in the previous year). Where
there is more than one commercial parking station located within one kilometre of an employer-provided car park, where the lowest fee charged by any of the operators is more than the threshold, FBT applies.
Charitable institutions: meaning of charitable
Draft Taxation Ruling TR 2011/D2
This very lengthy draft ruling sets out the Commissioner’s views on the meaning of “charitable” and “funds established for public charitable purposes” for the purposes of the ITAA 1997 and the FBT Assessment Act. The draft ruling re-writes the previously issued Taxation Ruling TR 2005/21 (FBT: charities) in light of court decisions including: FCT v Word Investments Limited (2008) 70 ATR 225 and Aid/Watch Incorporated v FCT (2010) 77 ATR 195.
As a consequence, the ATO withdrew TR 2005/21 with effect from 11 May 2011. Some of the main changes in the draft ruling from TR 2005/21 include:
- the addition of new key terms such as “charitable purpose”, “public charitable purposes”, “purpose”, “objects”, “sole purpose”, and “tax law”
- an entity can be charitable if it has a purpose of generating public debate with a view of influencing legislation, government policies or activities as long as the subject matter comes within one of the four heads of charity (relief from poverty, needs arising from old age, sickness and distress, as well as the advancement of education)
- a charitable organisation’s status will not be affected by non-charitable political activities which are incidental
- the charitable status of an institution will not be affected by it carrying on a business or commercial enterprise to give effect to its charitable purpose
- the objects or objectives in the constitutional documents as well as the activities performed are the main factors when determining the purpose of a charitable institution
- an institution can be charitable even if its activities are not intrinsically charitable
- an institution with the power to accumulate funds can still be charitable, and
- where the objects of an institution are charitable, the fact that it can distribute surpluses to owners or members in furtherance of those objects does not preclude it from being charitable as long as certain conditions are met.
The ATO says trustees whose only function is the management of a trust fund consistent with the terms of a trust deed will not qualify as a charitable institution. In its view, some additional quality or function that gives the trust, when regarded as a whole, the character of an establishment, organisation or association instituted for the promotion of an object is required, eg, the carrying on of activities or the provision of services relevant to the charitable purpose.
The ATO considers that enquiry as to the purpose of a charity is a holistic one. It is the substance and reality of the institution’s purpose that must be determined. The objects or objectives in the constituent documents of an institution, and the activities by which those objects or objectives are achieved, are the main factors to be considered in determining the purpose of the institution.
However, if the objects or objectives in the constituent documents of an institution indicate it has a sole purpose which is charitable, but its activities or other relevant factors (eg, how the institution is operated, any legislation governing its operation, the circumstances in which it was formed, its history, and its control) indicate the substance and reality is to the contrary, the ATO considers the institution will not be charitable.
If the purpose of an organisation is otherwise charitable, the ATO says its status will not be affected by non-charitable political activities that are no more than incidental to its sole charitable purpose.
The draft ruling says that, where state legislation extends charitable status to various purposes, those purposes are not, as a result, also deemed to be “charitable” for Commonwealth taxation purposes. According to the ATO, only Commonwealth legislation that is intended to apply, and does apply, for Commonwealth taxation purposes will have this effect.
GST and tax invoices
Draft GST Ruling GSTR 2011/D1
This draft ruling does a number of things concerning tax invoices. It:
- sets out the minimum information requirements for a tax invoice under s 29-70(1) of the GST Act
- explains when a document is in the approved form for a tax invoice
- explains the circumstances under s 29-70(1A) when a recipient of a supply can treat a document as a tax invoice even though it does not meet all of the tax invoice requirements
- explains when a document is taken to be a tax invoice under s 48-57 for the purposes of a GST group even though the group member that is the recipient of the supply is not identified in the document
- includes a summary of the circumstances where the Commissioner has determined under s 29-10(3) that a taxpayer can claim an input tax credit without a tax invoice.
The ruling replaces GST Ruling GSTR 2000/17, which was withdrawn on and from 25 May 2011.
The ruling says a tax invoice must include information to establish the identity of the supplier, and the recipient if applicable. Information sufficient to identify the supplier or recipient includes, but is not limited to, the legal name of the entity, the business name, or the trading name. A tax invoice must also contain sufficient information to identify the thing supplied including quantity and price.
A tax invoice must also contain enough information to determine the extent to which a supply is a taxable supply. The ATO says this requirement will be satisfied if the tax invoice includes:
- the amount of GST payable for each taxable supply, or
- a statement of the extent to which the supply is a taxable supply, or
- asterisking each taxable supply with a corresponding statement of the extent to which the supply is a taxable supply.
The document must make clear that it was intended to be a tax invoice or recipient created tax invoice. This must be satisfied by reference to the document itself. The ATO says other documents relating to the intentions of the supplier are irrelevant.
Circumstances in which a tax invoice need not be held include where:
- the value of the taxable supply is less than $75 or such higher amount as the regulations specify
- the GST is reverse charged
- a recipient is claiming an input tax credit for a creditable importation.
Date of effect
When the final Ruling is issued, it is proposed to apply on and from 1 July 2010.
Value of goods taken from stock for private use: 2010/11
Taxation Determination TD 2011/11
This TD provides an update of the amounts the Commissioner will accept for 2010/11 as estimates of the value of goods taken from trading stock for private use by taxpayers in certain specified industries. The amounts (which exclude GST) are shown in table 1.
