David Inglis

|Partner

The release of the Australia in the Asian Century white paper signals a sharp focus on agribusiness as a key strategic industry for Australia. The Australian Government has identified this sector playing a leading role in shaping our economic and political relationships in Asia in the coming years.

This report cements our view that Australian agribusiness is a highly significant national industry with major growth potential, especially in the Asian export market. The sector is likely to experience a changing and fast paced legislative and policy environment in the coming years, as the government implements the objectives outlined in the White Paper.

The Retirement Villages Amendment Bill 2012 (Bill) was passed by the Western Australian Parliament on 23 October 2012 and is awaiting assent.

Australia's latest autonomous sanctions against Iran and Syria are now in effect, as of 21 August 2012. The measures make engagement with certain sectors in Iran and Syria illegal and ban the trading of a certain goods and services with these countries. The sanctions also require any persons, organisations or businesses with contractual obligations to engage in any of the listed prohibited transactions with Iran or Syria to apply to the Department of Foreign Affairs and Trade for an authorisation to fulfil that obligation by 20 September 2012. Fulfilling those obligations is prohibited without first receiving authorisation from DFAT.

Welcome to the August edition of Trade Law Focus. In this edition we examine the Joint Standing Committee on Treaties (JSCOT)'s shelving of the Anti-Counterfeiting Trade Agreement. We also discuss the proposed National Food Plan, the Brumby Anti-Dumping Review, the potential introduction of a National Integrity Commission, and the impact of international trade regulations on M&A due diligence

Operators of retirement villages in Victoria should be aware that the Australian Consumer Law and Fair Trading Act 2012 (Vic) (ACLFTA) commenced on 1 July 2012. The ACLFTA repeals the Fair Trading Act 1999 (Vic) and re-enacts its provisions in a restructured and consolidated form.  There are also some new provisions, such as increased capacity for disputes involving small businesses to be referred for conciliation or mediation by the Director of Consumer Affairs Victoria. 

In May 2011, the Administrative Appeals Tribunal (AAT) decided in Re The Retirement Village Company and FCT [2011] AATA 298, that a retirement village operator could claim a tax deduction for exit payments (which included a 'capital appreciation sharing payment') made under resident contracts (and which had been acquired as part of the acquisition of the retirement village).

The Australian Taxation Office (ATO) has now issued a Decision Impact Statement on the AAT decision, which broadly seeks to limit the application of the AAT decision to the particular facts.

Given the ATO does not appear to accept that the AAT decision has precedential value, we recommend the ATO seek a test case to provide the retirement village sector with some certainty on these important tax and commercial issues.

Welcome to the May edition of Trade Law Focus. In this edition we give an update on developments in the Australian Government's negotiations in the Trans-Pacific Partnership Agreement, especially in health and intellectual property, and comment on submissions received on the Defence Trade Controls Bill. We also highlight a recent announcement to ease sanctions against Burma, signalling a major shift in foreign policy toward that country and examine the FIRB report on the 'national interest test' in the Foreign Acquisitions and Takeovers Act.

The Australian Taxation Office (ATO) has recently issued a draft public ruling GSTR 2012/D2 (Draft Ruling) in relation to the GST treatment of retirement village exit fees. The Draft Ruling will affect both charitable and commercial operators of loan-lease retirement villages.

On Wednesday March 7, the Department of Foreign Affairs and Trade (DFAT) released its lists of Designated and Declared Persons and Designated Entities under the Autonomous Sanctions Regulations 2011. Importantly, this means the new Australian sanctions regime is now in place with immediate effect.  In this Alert we consider the new sanctions regime, the Designated and Declared Persons and Designated Entities list and further restrictions on financial transactions with Iran.

Welcome to the December edition of Trade Law Focus. In this edition we update on developments with the Australian Government's overhaul of its trade laws, notably in the areas of strategic export controls, sanctions multilateral and autonomous sanctions, and the anti-dumping and countervailing duty system. We also provide our regular summary of recent developments in trade law in Australia and New Zealand.

The Australian Taxation Office has withdrawn its Federal Court appeal of the AAT decision in Re The Retirement Village Company and FCT.

The Supreme Court of New South Wales recently held that certain clauses in services deeds between a manager and residents of a retirement village (under which residents gave the manager an exclusive sole agency and right of sale of residents' lot) were void because they were inconsistent with provisions of the Retirement Villages Act 1999 (NSW) (Act). This meant that on a proper construction of the services deeds the manager could not enforce a clause entitling it to a 'management profit' upon sale of the lots.

Welcome to the September edition of Trade Law Focus. Much has been happening in the trade space over the past few months, including law reform legislation or proposals on Australia's strategic export controls, sanctions as well as its anti-dumping and countervailing duty system.

This edition of Trade Law Focus begins with overview of the recent exposure draft to the Defence Trade Controls Bill, followed by our regular update on developments in the Australian and New Zealand trade law environments.

In a high profile dispute over access to Chinese natural resources, a WTO panel on Tuesday 5 July found that China violated international trade rules by restricting the exportation of nine raw materials, refuting Beijing’s claim that these restrictions were based on environmental grounds.

The Australian Government has announced reforms to Australia's anti-dumping and countervailing duty laws. Although legislation to effect the reforms is yet to be released, the announcement last night will be important for domestic manufacturers of products such as building materials, plastics, chemicals and grocery items, local consumers, as well as importers and overseas exporters of goods to Australia.

A recent decision of the AAT casts real doubt on the Australian Taxation Office's current practice of:

• denying a tax deduction for the payment of a share of capital gains to former residents following their departure from retirement villages ('capital appreciation sharing payments'); and
• imposing additional GST on the sale of a retirement village on the value of loan repayment obligations imposed on a purchaser of a retirement village (explicitly or by operation of relevant State or Territory legislation).

If upheld, this decision could result in cost savings for retirement village owners and operators and improved returns to investors.

Retirement village operators may wish to consider what actions are appropriate in the interim to preserve their tax position. 

 

The Australian Taxation Office has at last finalised its GST public ruling on retirement villages (GSTR 2011/1). The ruling maintains the position that taxable sales of retirement villages must include GST based on the value of resident loans. In a second 'hit' to developers, it also requires them to reduce their input tax credit claims by allowing for a 'deemed' interest component in the calculation of their input tax credit recovery ratios.

The new format Trade Law Focus will now update you monthly on trade issues relevant to Australia and New Zealand businesses.

In this edition of Trade Law Focus, we look at:

• Reform of Australian autonomous sanctions on its way
• Agricultural trade negotiations and the new Labor Government
• Foreign investment in rural land and water rights will attract heightened attention
• Expect more streamlined export controls for defence and dual-use goods
• Australian trade remedies law unlikely to be shaken up, even though Productivity Commission recommends it

In this edition of Trade Law Focus, we look at:

• Australian penalties for foreign corrupt practices increased
• New Zealand–Australia - Interim report issued in WTO apples dispute
• International investment law: treatment of investors in judicial proceedings subject to rulings by arbitrators
• Increased scrutiny for foreign investments in residential property
• Trade remedies in Australia: Government mulls Productivity Commission recommendations for modest reforms

Minter Ellison's International Trade Group has released its overview and assessment of the recently announced free trade agreement between Australia, New Zealand and ASEAN.