Notice of Ruling, Notice of Addenda

Overview

The Commissioner of Taxation, Chris Jordan, has introduced a series of rulings and addenda to provide clarification and address specific issues arising under the Income Tax Assessment Act 1997. The aim of these rulings is to provide certainty to taxpayers by explaining the Commissioner's position on certain tax matters, particularly in relation to capital gains tax treatment of securities, country-by-country reporting, travel and meal allowance expenses, and the holding of control interests in foreign companies by trusts. These rulings are intended to assist taxpayers in understanding their obligations under the law and ensuring compliance. The rulings and addenda were enacted by the Commissioner of Taxation and apply from the specified dates mentioned in the notices, providing updated or corrected information as necessary.

Scope and Application

The Commissioner of Taxation, Chris Jordan, has issued a notice regarding several rulings and addenda concerning income tax matters. CR 2017/74 pertains to the Capital Gains Tax (CGT) treatment of Spicers Ltd's disposal of PaperlinX Step-Up Preference Securities in exchange for Spicers ordinary shares. This ruling applies to entities that entered into the specified scheme during the term of the ruling, from 27 June 2017 to 30 June 2017, and continues to apply to all entities within the specified class even after 30 June 2017. LCG 2015/3, as amended, provides guidance on country-by-country reporting under Subdivision 815-E of the Income Tax Assessment Act 1997, effective from 1 January 2016. TD 2017/19, as amended, outlines the reasonable travel and overtime meal allowance expense amounts for employee truck drivers for the 2017-18 income year, effective from 1 July 2017, following consultation with the transport industry. Lastly, TD 2017/22, as amended, clarifies the date of effect for the scenario where an Australian corporate tax entity is a beneficiary of a trust holding a direct control interest in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997, effective from 18 October 2017.

Key Provisions

The main sections of this legislation concern the rulings and addenda issued by the Commissioner of Taxation, which provide specific guidance on various tax matters. Ruling CR 2017/74 (paragraph 1) addresses the capital gains tax (CGT) treatment of the disposal of PaperlinX Step-Up Preference Securities in exchange for Spicers ordinary shares. This ruling applies to entities who entered into the specified scheme during the period from 27 June 2017 to 30 June 2017 and continues to apply to future transactions within the specified class. The Addendum to Ruling LCG 2015/3 (paragraph 2) corrects inaccuracies in the Law Companion Guideline regarding Subdivision 815-E of the Income Tax Assessment Act 1997, specifically concerning country-by-country reporting. This correction applies from 1 January 2016. Additionally, the Addendum to Taxation Determination TD 2017/19 (paragraph 3) modifies the reasonable travel allowance expense amounts for employee truck drivers for the 2017-18 income year, following detailed consultation with the transport industry, and applies from 1 July 2017. Finally, the Addendum to Taxation Determination TD 2017/22 (paragraph 4) clarifies the date of effect for the issue of whether an Australian corporate tax entity can be a beneficiary of a trust holding a direct control interest in a foreign company for the purposes of Subdivision 768-A of the Income Tax Assessment Act 1997, applying from 18 October 2017. These rulings and addenda impose obligations on taxpayers to adhere to the specific guidance provided by the Commissioner of Taxation. For instance, entities involved in the disposal of PaperlinX Step-Up Preference Securities must ensure their transactions comply with the CGT treatment outlined in Ruling CR 2017/74. Similarly, entities required to provide country-by-country reporting must correct their previous submissions in accordance with the amendments detailed in the Addendum to Ruling LCG 2015/3. Furthermore, employee truck drivers and their employers must adjust their claims for travel allowances as per the updated figures in the Addendum to Taxation Determination TD 2017/19. Finally, beneficiaries of trusts and their trustees must ensure their arrangements comply with the clarified guidance in the Addendum to Taxation Determination TD 2017/22. Failure to comply with these rulings and addenda can result in various consequences. While specific penalties are not detailed in the text, breaches of tax law generally may lead to civil or criminal penalties. Civil penalties may include fines and interest on unpaid taxes, while criminal penalties could involve imprisonment or fines for more severe breaches. It is important for taxpayers to carefully review these rulings and addenda to ensure full compliance with the applicable tax laws.