1998/99 Federal Budget - The 1998/99 Federal Budget was handed down on 12 May 1998. The main measures contained in the Budget deal with:
- Deductions for Y2K compliance expenditure
- Amortisation of systems and application software
- CGT - majority underlying interests in assets held by public entities
- Provisional tax uplift factor for 1998/99
- New penalty tax arrangements
- Self-managed superannuation funds
- Superannuation Supervisory Levy
- New super investment rules
- No access to superannuation for housing
- Tax rebate for landcare works
- FBT - car parking threshold amount
- Demutualisation of non-insurance organisations
- High wealth individuals taskforce
- Extension of PPS system
- Medicare levy low-income thresholds for 1998/99
- Extension of gold card medicare exemption
- Donations to political parties and independents
- No CPI reduction for dependant rebates
- Beneficiary tax rebate for Community Development Employment
- Projects (CDEP) participants
- Sales tax quarterly remitter threshold.
Government's tax reform package - There are rumours that the Government may be preparing to release its tax reform package in mid to late June.
Commissioner wins on debt defeasance - ICI High Court appeal - The majority of the High Court held that a "gain" made under a debt defeasance transaction was assessable to the taxpayer under the capital gains tax provisions, rather than as income according to ordinary concepts or as part of a profit making scheme (FCT v Orica Ltd (formerly ICI Australia)).
Tax rulings - the following rulings and determinations were issued/withdrawn:
Draft Taxation Ruling TR98/D5 on expenditure incurred in making computer systems year 2000 (Y2K) compliant. The draft Ruling explains the circumstances in which such expenditure is on revenue or capital account for the purposes of determining the extent to which it may be deductible under s8-1 or 25-10. Taxation Ruling IT 26 (deductions for computer equipment), was withdrawn with effect from 11 May 1998.
Draft Taxation Ruling TR98/D4 which discusses benefits that may be received by individuals from involvement in sport. The Ruling provides guidelines for determining whether these benefits are assessable income.
Taxation Determination TD98/8 provides that the "car parking threshold" for the FBT year commencing on 1 April 1998 has been set at $5.25.
Taxation Determination TD98/9 sets out the indexation factors for valuing non-remote area housing and the statutory amounts for valuing remote area housing for the FBT year commencing 1 April 1998. The indexation factor for valuing non-remote area housing in New South Wales is 1.037. The statutory amount for valuing remote area general housing is $106.98 weekly.
Taxation Determination TD98/10 sets out the rates to be applied on a cents per kilometre basis for calculating the taxable value of a residual fringe benefit arising from the private use of a motor vehicle for the FBT year commencing 1 April 1998.
Deduction for investment in films - Legislation to provide for a deduction for money paid during the 1998/99 and 1999/2000 income years to subscribe for shares in a Film Licensed Investment Company was introduced into the House of Representatives on 14 May 1998.
Appeal news - The Commissioner has applied to the High Court for special leave to appeal against the Full Federal Court's decision in FC of T v De Luxe Red and Yellow Cabs Co-operative. The Full Court previously held that the relationship between taxi operators and taxi drivers was not an employer/employee relationship for PAYE and superannuation guarantee purposes.
Superannuation choice start date - The Assistant Treasurer announced that the start date for superannuation choice for new employees will be 1 July 1999.
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