Public advice and guidance community

Published: Wednesday 17 October, 2018

Thank you for taking the time to provide us with feedback in relation to Practical Compliance Guideline 2018/6 GST - inbound tour operators and agency.

The final document has now been published on the legal database, click link below to access the document: PCG 2018/6 GST - inbound tour operators and agency

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Published: Thursday 23 August, 2018

We have published draft PCG 2018/D7 Goods and Service Tax – inbound tour operators and agency and are seeking your feedback.

This draft Guideline describes the circumstances in which the Commissioner proposes not to apply compliance resources to examine whether or not an inbound tour operator is acting as an agent for its non-resident clients. When the draft Guideline is finalised, an inbound tour operator may self-assess as an agent of a non-resident if they meet the requirements outlined in the Guideline. The final Guideline will apply on and from the date of issue.

The administrative approach in the proposed Guideline can only be adopted by inbound tour operators, that is, Australian resident entities who are registered for GST that make supplies of agency services to their non-resident clients. The proposed Guideline will not apply to offshore online travel agents (foreign operators) who are not registered for GST in Australia but make supplies of rights to accommodation in Australia to their clients. We note that the announced 2018 Budget measure ‘GST – levelling the playing field for online bookings’ deals with the GST registration turnover threshold for these foreign operators and is a separate issue than that dealt with in the proposed Guideline.

We invite you to provide feedback on the draft PCG 2018/D7 guideline.

Have your say by COB Friday 21 September, 2018.

Updated: Friday 31 August, 2018

Feedback was sought on any practical issues arising in two areas of the cryptocurrency market. The first, when exchanging one cryptocurrency for another and the second, record keeping requirements relating to cryptocurrency transactions.

Specifically, we asked the following four questions to better understand these issues from the taxpayers’ perspective.

• Are there any practical issues that arise in relation to the CGT record keeping rules, so far as cryptocurrency transactions are concerned?


• Are there any specific factors that you think we should take into account when developing further public advice and guidance about CGT record keeping for cryptocurrency?


• Are there any practical issues in relation to complying with the taxation obligations that arise for each cryptocurrency to cryptocurrency transaction?


• Are there any specific factors that you think we should take into account when developing further public advice and guidance about cryptocurrency to cryptocurrency transactions?

We received 799 pieces of feedback via the Let’s Talk response template, and 11 additional submissions from law and accounting firms, software publishers and other interested parties.

Due to the high volume of feedback, the responses were analysed for common themes and irritants. Through this process, we identified the five most frequently raised issues and our current response to these issues, as follows:

Issue 1:	Response 1:
In many situations, cryptocurrency transactions are not reasonably able to be accounted for on a transaction by transaction basis and the only reasonable approach is taxing on a fiat in and fiat out basis.	The normal record keeping rules under the tax laws apply to cryptocurrency transactions as with any other transactions involving the disposal of property. As part of our research, we discovered low cost software solutions that are able to both record each cryptocurrency transaction (including cryptocurrency to cryptocurrency transactions) and convert the value of the proceeds into Australian dollars.
Issue 2:	Response 2:
High fluctuations in values make it difficult to value cryptocurrency.	We heard that high fluctuations in value could create large changes in the ‘paper’ value of cryptocurrency portfolios, compared to realised gains. As cryptocurrencies are generally CGT assets, any gains are not realised until the time of disposal. This is an issue in all investments, and managing this risk falls into the realm of tax planning.
Issue 3: Records have not been kept and we can’t reconstruct them now. Issue 4: It was hard to keep records of high volume trades, particularly in ascertaining value for each trade. Issue 5: Difficulty in accessing data required for proper record keeping.	Response to Issues 3, 4 and 5: The normal record keeping rules under the tax laws apply to cryptocurrency transactions as with any other transactions involving the disposal of property. As part of our research, we discovered low cost software solutions that would be able to both record each cryptocurrency transaction (including cryptocurrency to cryptocurrency transactions) and convert the value of the proceeds into Australian dollars. The software can take information directly from the exchange or a digital wallet and do the calculations, which helps alleviate the issues with recording trades and accessing data. This type of software may be suitable for record keeping in cryptocurrency. Search "cryptocurrency record keeping software" for details. In most cases it may be possible to reconstruct records through historical information available from Digital Currency Exchanges, wallet transactions or even normal bank account transactions. Market values of various cryptocurrency can also be obtained from a reputable online exchange.

Other issues identified and addressed as a result of the consultation feedback
A broader environmental scan of the cryptocurrency feedback identified that some people had difficulty understanding the various elements of the ATO’s cryptocurrency guidance.

In response to this feedback, on 29 June 2018, we updated the Tax Treatment of Cryptocurrencies guidance on ato.gov.au:

• We aggregated the page so similar topics were included under the same heading to help people understand the context of the public advice.
• We grouped content under new topic headings to more clearly reflect where people can find the information they need. The new headings include:
  • Transacting with cryptocurrency,
  • Cryptocurrency used in business, and
  • Record keeping.
• The information about record keeping provides more detail on what records taxpayers require to substantiate their transactions. It also reasserts the high threshold required for evidence to show loss or theft of cryptocurrency.
• We also published our view on the tax treatment of new cryptocurrency received as a result of a chain split.

We will continue to monitor formal and informal feedback channels to identify ways we can improve the user experience and to advise on new and emergent risks in our ato.gov.au content.

We thank the community for their honest responses and, where possible, we will continue to look for opportunities to incorporate this feedback into our future cryptocurrency guidance.

Visit Tax treatment of cryptocurrencies for information about tax obligations of cryptocurrency.

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Public advice and guidance community homepage

Table of contents for Consultation: Substantiating cryptocurrency taxation events

Overview

Record keeping

Exchanging one cryptocurrency for another cryptocurrency

Substantiating cryptocurrency taxation events - feedback form

Overview

We published public advice regarding the income tax treatment of Bitcoin, and other cryptocurrency that has the same characteristics as Bitcoin, in a series of taxation determinations in 2014. Since that time, in response to questions being asked by the community, we have made minor changes to our web guidance about the taxation treatment of cryptocurrency.

Over the last 12 months, there has been increased interest in cryptocurrency in Australia and, on 13 March 2018, we updated our web guidance Tax treatment of cryptocurrencies to address some of the common enquiries in relation to cryptocurrency transactions. Any reference to 'cryptocurrency' in this consultation refers to Bitcoin, or other crypto or digital currencies that have the same characteristics as Bitcoin.

The purpose of this consultation is to seek feedback on practical compliance issues arising from complying with taxation obligations in relation to cryptocurrency transactions. In particular, we are interested in any practical issues that may impact on taxpayers’ abilities to calculate and substantial any capital gains and losses for capital gains tax (CGT) purposes.

Your feedback may also be taken into account when developing further advice and guidance products in relation to the taxation of cryptocurrency.

This consultation is limited to the following issues:

• record-keeping as it relates to cryptocurrency transactions, and
• exchanging one cryptocurrency for another cryptocurrency.

Feedback on these topics can be submitted through our confidential feedback form.

Go to Table of contents

Record keeping

The CGT record-keeping rules require you to keep records of whatever can reasonably be expected to be relevant to working out whether you have made a capital gain or loss from a CGT event.

You need to keep the following records in relation to your cryptocurrency transactions:

• the date of the transactions
• the value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a reputable online exchange)
• what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

Questions for consultation

• Are there any practical issues that arise in relation to the CGT record-keeping rules, so far as cryptocurrency transactions are concerned?
• Are there any specific factors that you think we should take into account when developing further public advice and guidance about CGT record-keeping for cryptocurrency?

Go to Table of contents

Exchanging one cryptocurrency for another cryptocurrency

Where you exchange one cryptocurrency for another cryptocurrency, you dispose of one CGT asset and acquire another CGT asset. Where you receive property instead of cash as part of a transaction, you are usually taken to have received the market value in Australian dollars of the property received.

You must compare the CGT cost base of the cryptocurrency item disposed of with the market value of the new cryptocurrency item obtained for all exchange transactions.

Records need to be retained for each transaction, in accordance with the record keeping rules. This means that each item is separately accounted for and recorded when it is acquired and disposed of, with relevant Australian dollar values recorded.

It does not matter how many exchange transactions you undertake. You need to undertake this process for every transaction occurring during the income year.

Questions for consultation

• Are there any practical issues in relation to complying with the taxation obligations that arise for each cryptocurrency to cryptocurrency transaction?
• Are there any specific factors that you think we should take into account when developing further public advice and guidance about cryptocurrency to cryptocurrency transactions?

Go to Table of contents

Next steps:

You can provide your comments via our confidential feedback form.

Go to Table of contents OR Public advice and guidance community homepage

Published: Thursday 23 August, 2018

We have published draft Practical Compliance Guideline PCG 2018/D6 The Commissioner’s discretion to extend the two year period to dispose of dwellings acquired from a deceased estate and are seeking your feedback.

This draft Guideline is designed to save compliance costs for trustees or beneficiaries of deceased estates who sell a dwelling acquired from the estate. In some circumstances a capital gains tax exemption is available if a dwelling is sold within two years of the deceased's death. The Commissioner has a discretion to allow for a longer period than two years. The draft Guideline sets out the proposed factors the Commissioner will consider in exercising the discretion. It also sets out the proposed circumstances where the Commissioner will allow for an extra year without requiring an application to be made, thereby reducing the administrative burden on trustees and beneficiaries.

We invite you to provide feedback on the draft PCG 2018/D6. Have your say by COB Friday 21 September, 2018.

Edited versions (EVs) are private rulings which we make available publicly, once confidential information (such as names of persons or entities concerned) is removed. EVs ensure transparency of our decision making and assist you in deciding whether to lodge a private ruling request, and what to include in your application.

EVs have traditionally been available from the Register of Private Binding Rulings. However, we’ve heard your feedback that they can be difficult to search for in the Register, which is why they are now available in the ATO Legal database.

Making EVs available in the Legal database provides you a vastly improved search function and client experience through a superior search engine. It also means EVs are now available alongside other advice and guidance products, such as tax determinations and rulings, so you can search for EVs and other advice and guidance products in one place. Edited versions will be available in the Register to ensure continuity while we consult on these changes.

To further improve your experience by ensuring that any search results are useful and relevant, EVs have been:

• Archived if more than four years old (these are still available through a search of archived content), and


• Removed if more than ten years old.

Read more about the EV move on ato.gov.au.

We want your feedback
We invite you to provide feedback on the the relocation and archiving and removal of aged EVs via the confidential online feedback form. Closing date for submissions is 28 February 2018.

We have published draft Law Companion Guideline LCG 2017/D7 Diverted profits tax. The diverted profits tax (DPT) is a new measure introduced by the government to complement Australia’s anti-avoidance rules and strengthen the existing income tax framework.

The draft LCG explains how the new law will apply and clarifies new concepts introduced by the measure.

We encourage you to provide your feedback on the draft LCG via the confidential online feedback form. Closing date for submissions is the 2 February 2018.

We have published a discussion paper seeking feedback on the definition of ‘taxi’ contained in the Fringe Benefits Tax Assessment Act 1986 (FBT Act) and the exemption from fringe benefits tax for taxi travel taken to or from work or due to illness under section 58Z of the FBT Act.

In light of a recent Federal Court decision in the matter of Uber B.V. v Commissioner of Taxation [2017] FCA 110 (Uber), and proposed changes to licensing regulations in a number of states and territories, we are reviewing our interpretation of the definition of ‘taxi’ contained in the FBT Act.

We’re looking for feedback from the community on an interpretation of ‘taxi’ that includes vehicles licensed to provide taxi services, including rank and hail services, ride-sourcing vehicles and other vehicles for hire.

We invite you to provide comments on the discussion paper by 24 October 2017. To access the confidential feedback form, click here.

See more:

• Fringe benefits tax - definition of taxi

Updated: Thursday 31 August 2017

We have published Draft Practical Compliance Guideline (PCG) 2017/D16 Propagation arrangements adopted by registrable superannuation entities. The PCG is open for consultation until 2 October 2017.

This draft Practical Compliance Guideline assists registrable superannuation entities to examine the characteristics of their propagation arrangements to determine the likelihood of an ATO review.

Once finalised, we propose that it will apply from 1 July 2016 and clarifies the ATO's approach to these types of arrangements for the large superannuation industry. This guidance does not apply to self-managed superannuation funds.

We invite you to comment below to provide feedback on draft PCG 2017/D16 by 2 October 2017.

The ATO has published draft Taxation Ruling (TR) TR 2017/D4 – Income tax: When does a corporate limited partnership ‘credit’ an amount to be a partner in that partnership?

The draft Ruling, currently open for public comment, sets out the Commissioner’s preliminary but considered view on when a corporate limited partnership (CLP) ‘credits’ an amount to one of its partners within the meaning of section 94M of the Income Tax Assessment Act 1936.

Consultation

The ATO is encouraging tax professionals, legal professionals and taxpayers to get in contact with the authoring team to provide feedback on the substantive content of the draft TR, and the new approach it adopts. The draft TR is available on the ATO Legal Database and is open for comment until Friday 30 June 2017.

Updated: Friday 9 June 2017

As a response to feedback from the community, we recently published Draft Ruling TR 2017/D5 Income tax: employee remuneration trusts to replace Draft Ruling TR 2014/D1 Income tax: employee remuneration trust arrangements. The ATO views in TR 2017/D5 have not changed in any significant way from those expressed in TR 2014/D1 except that TR 2017/D5 does not deal with employee share schemes (ESS).

The ATO view about dividend equivalent payments made by a trustee under an ESS is now represented in Draft Tax Determination TD 2017/D2 Income tax: when will a dividend equivalent payment, made by a trustee under an employee share scheme that delivers ESS interests taxed by Subdivision 83A-B or 83A-C of the Income Tax Assessment Act 1997, be assessable as remuneration under section 6-5?

We have also released an associated Draft Practical Compliance Guideline PCG 2017/D9 Dividend equivalent payments made by a trustee under an employee share scheme. This will provide certainty for employees that a dividend equivalent payment will not be assessable to them as remuneration where the conditions outlined in PCG 2017/D9 are met.

We invite you to provide comments on Draft Ruling TR 2017/D5 by 21 July 2017, and comments on the views expressed in Draft Tax Determination TD 2017/D2 and Draft Practical Compliance Guideline PCG 2017/D9 by 7 July 2017.

Updated: Tuesday 27 June 2017

We have published two draft Law Companion Guidelines on GST and cross-border supplies. We invite your comments on our draft views during the consultation period, which ends on 10 July. You can provide your comments via our feedback form.

Draft Law Companion Guideline LCG 2017/D4: GST on supplies made through electronic distribution platforms is about when an EDP operator is responsible for GST on supplies of:

• digital products and digital services, from 1 July 2017, and
• low value imported goods, from 1 July 2018.

Draft Law Companion Guideline LCG 2017/D5: When is a redeliverer responsible for GST on a supply of low value imported goods? explains how the proposed amendments for GST on low value imported goods will apply to redeliverers.

The new draft guidance products complement the draft Law Companion Guideline we published earlier this year, Draft Law Companion LCG 2017/D2: GST on low value imported goods.

See our Let’s Talk page for more information on how we propose to administer the new law for GST on low value imported goods.

We will also be placing further information on our website about the measure, at www.ato.gov.au/AusGST.

Other relevant guidance

We have recently published the final public ruling GSTR 2017/1: making cross-border supplies to Australian consumers, which was previously issued as draft public ruling GSTR 2016/D1. This is relevant to suppliers and electronic distribution platforms in relation to imported services and digital products.