Notice of Ruling and Withdrawal of Ruling 1 February 2023
The Commissioner of Taxation, Chris Jordan, gives notice by notifiable instrument under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953 of the following public ruling, and under subsection 358-20(1) of Schedule 1 to the Taxation Administration Act 1953 of the withdrawal of the following public ruling, copies of which can be obtained from ato.gov.au/law
NOTICE OF RULING |
Ruling number | Subject | Brief description |
CR 2023/3 | EFTsure Pty Ltd – employee share scheme – minimum holding period and exchange of options | This Ruling sets out the income tax consequences for participants in the EFTsure Pty Ltd Employee Option Plan who redeemed all vested options and exchanged all unvested options issued to them under that plan. This Ruling applies from 1 July 2021 to 30 June 2022. |
NOTICE OF WITHDRAWAL |
Ruling number | Subject | Brief description |
TD 2019/1 | Income tax: what constitutes ‘use’ (and potentially first use) of a mining, quarrying or prospecting right, that is a depreciating asset, for the purposes of subsection 40-80(1) of the Income Tax Assessment Act 1997? | This Ruling is being withdrawn with effect from 2 February 2023. |
Overview
The Taxation Administration Act 1953 was enacted to provide a framework for the administration of Commonwealth revenue laws, including income tax. The Act was introduced to address the need for a comprehensive and streamlined process for the administration of taxation laws, ensuring that they are applied consistently and efficiently. The policy objective of the Act is to facilitate the accurate and timely collection of taxes and the enforcement of tax laws, while also providing taxpayers with clarity and certainty regarding their obligations. The Act empowers the Commissioner of Taxation to issue public rulings and withdraw rulings as necessary, to provide guidance on the interpretation and application of tax laws. The Commissioner has issued a new public ruling, CR 2023/3, to provide guidance on the income tax consequences for participants in the EFTsure Pty Ltd Employee Option Plan, and has withdrawn the earlier ruling, TD 2019/1, which dealt with the definition of ‘use’ of a mining, quarrying or prospecting right for income tax purposes. These rulings can be accessed on the Australian Taxation Office website.
Scope and Application
The Notifiable Instrument F2023N00014, issued by the Commissioner of Taxation, pertains to the issuance of a new public ruling and the withdrawal of an existing public ruling under the Taxation Administration Act 1953. The new ruling, CR 2023/3, addresses the income tax implications for participants in the EFTsure Pty Ltd Employee Option Plan, specifically those who redeemed all vested options and exchanged all unvested options during the period from 1 July 2021 to 30 June 2022. This ruling applies to individuals or entities involved in the specified employee share scheme. Concurrently, the instrument withdraws the ruling TD 2019/1, which concerned the interpretation of 'use' of mining, quarrying, or prospecting rights as depreciating assets for income tax purposes, effective from 2 February 2023. The scope of this notifiable instrument is national, affecting taxpayers and entities across Australia. No specific exclusions, exemptions, or thresholds are mentioned in the provided text, but it is implied that the rulings apply to those directly involved in the specified transactions or schemes.
Key Provisions
The main operative sections of this notifiable instrument include the issuance of a new public ruling (CR 2023/3) and the withdrawal of an existing public ruling (TD 2019/1). Section CR 2023/3 pertains to the income tax consequences for participants in the EFTsure Pty Ltd Employee Option Plan, specifically addressing the redemption of vested options and the exchange of unvested options, effective from 1 July 2021 to 30 June 2022. This ruling provides clarity and guidance on the tax implications for these transactions during the specified period. Section TD 2019/1, which is being withdrawn effective from 2 February 2023, previously addressed the definition of 'use' of a mining, quarrying, or prospecting right as a depreciating asset for income tax purposes. The withdrawal of this ruling indicates that the guidelines it provided are no longer in effect as of the specified date.
The obligations imposed by this instrument on the parties governed by it include adherence to the tax consequences outlined in the new ruling (CR 2023/3) for those participating in the EFTsure Pty Ltd Employee Option Plan within the specified timeframe. Participants must understand and comply with the tax implications associated with the redemption of vested options and the exchange of unvested options as detailed in the ruling. Conversely, the withdrawal of ruling TD 2019/1 relieves parties from the obligations previously outlined in that ruling, freeing them from the necessity to adhere to the withdrawn guidelines concerning the depreciation of mining, quarrying, or prospecting rights as a depreciating asset for income tax purposes.
The notifiable instrument also outlines potential consequences for non-compliance with the provisions set forth. While specific offences and penalties are not detailed in the text, breaches of tax rulings generally may result in penalties under the Income Tax Assessment Act 1997. Such penalties can include fines and, in severe cases, criminal charges. Participants who fail to comply with the new ruling (CR 2023/3) regarding the EFTsure Pty Ltd Employee Option Plan could face these penalties, which may vary depending on the nature and extent of the non-compliance. Additionally, the withdrawal of ruling TD 2019/1 means that any reliance on its previously provided guidance could result in tax assessments that do not align with current legislative standards, potentially leading to further financial and legal repercussions.