Thinking | 1 December 2021

Talking Tax – Issue 201

By Anthony Bradica, Joshua Haddad and Todd Bromwich

In this edition of Talking Tax, we discuss the High Court’s ruling in Addy that the backpacker tax contravenes the Australia-UK Double Tax Agreement, the AAT decision of Carvell, which is a timely reminder of a taxpayer’s burden of proof in tax disputes, and the new stapled super fund regime that operates from 1 November 2021.

Case law

Reminder of the taxpayer’s burden of proof

Carvell and Commisssioner of Taxation (Taxation) [2021] AATA 3627 serves as a timely reminder that a taxpayer cannot derogate from their obligation to prove their taxable income simply by disproving elements of the Commissioner’s default assessment. The case also emphasises the importance of providing corroborating documentary evidence to discharge the burden of proof of what the assessments should have been.

Backpacker tax – High Court appeal

The High Court has unanimously held that imposing the ‘backpacker tax‘ contravenes the non-discrimination clause set out in article 25 of the Double Tax Agreement (DTA) between Australia and the UK, in Addy v Commissioner of Taxation [2021] HCA 34.

Other news

Stapled Super Fund Regime started on 1 November 2021

From 1 November 2021, superannuation accounts will be ‘stapled’ to follow an employee as they change jobs, with the passing of the Treasury Laws Amendment (Your Future, Your Super) Act 2021.

Employers must now follow a three-step process with all new employees in order to comply with the choice of fund rules:

  • Ask the employee to nominate a super fund to which contributions may be made.
  • If the employee fails to nominate a fund, the employer must ask the ATO to confirm whether the employee has a stapled super fund.
  • If the employee does not have a stapled fund, the employer may set up an account for the employee with their default super fund.

Employers may incur a liability to the super guarantee charge if they make superannuation contributions in breach of the choice of fund rules.

Further details of the new Stapled Super Fund Regime requirements can be found on the ATO’s website.

This edition of Talking Tax was written with this assistance of Kevin Dorostkar, Law Graduate, and Gabrielle Terliatan, Paralegal.

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