Notice of Rulings 14 April 2021

Overview

The Notice of Rulings 2021 issued by the Commissioner of Taxation under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, notifies the public of specific rulings and an erratum aimed at clarifying the application of tax provisions in certain financial arrangements. Enacted on 14 April 2021, the primary objective of this notifiable instrument is to ensure transparency and consistency in tax law application, particularly for complex financial instruments and transactions. This notice addresses specific gaps in tax law interpretation and application, thereby providing certainty for taxpayers and facilitating compliance. The rulings and erratum provided aim to rectify misunderstandings and offer clear guidance on the tax implications of particular financial arrangements, such as the Macquarie Group Capital Notes 5 and development lease arrangements with government agencies, respectively.

Scope and Application

The Notifiable Instrument F2021N00069 issued by the Commissioner of Taxation under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, outlines specific public rulings and an erratum concerning the application of tax provisions. The first ruling, CR 2021/27, addresses the taxation of entities that have acquired Macquarie Group Capital Notes 5 and specifies the tax treatment applicable to these entities, with the ruling being effective from 1 July 2020 to 30 June 2031. The second ruling, GSTR 2015/2, pertains to the correction of an erratum regarding the date of effect in Addendum GSTR 2015/2A1 for goods and services tax development lease arrangements with government agencies, and it applies from 1 April 2021. These rulings and the erratum apply to entities and transactions within the Commonwealth of Australia, and they provide clarity on the tax implications for the specified subjects. This notifiable instrument is subject to potential extension or restriction through subordinate instruments, which may further refine the application of these rulings and errata.

Key Provisions

The Notifiable Instrument F2021N00069 issued by the Commissioner of Taxation, Chris Jordan, under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, contains two key provisions. Firstly, it includes a public ruling numbered CR 2021/27, which pertains to the tax treatment of entities that have acquired Macquarie Group Capital Notes 5 (paragraph 1). This ruling specifies how certain tax provisions apply to these entities and is effective from 1 July 2020 to 30 June 2031 (paragraph 2). Secondly, the instrument also includes an erratum numbered GSTR 2015/2, which corrects the date of effect for Addendum GSTR 2015/2A1 concerning goods and services tax (GST) in development lease arrangements with government agencies (paragraph 3). This erratum is applicable from 1 April 2021 (paragraph 4). The obligations imposed by this Notifiable Instrument on the relevant parties primarily revolve around the adherence to the tax provisions and rules outlined in the public ruling and the erratum. Entities acquiring Macquarie Group Capital Notes 5 must ensure their tax practices comply with the specified tax provisions as detailed in Ruling CR 2021/27 (paragraph 5). Similarly, those involved in development lease arrangements with government agencies must update their practices to reflect the corrected date of effect as outlined in the erratum GSTR 2015/2 (paragraph 6). Both rulings aim to provide clarity and ensure consistent application of the tax laws in these specific areas. Breaching the provisions of these rulings or failing to comply with the obligations set out in the Notifiable Instrument could lead to various consequences. While the specific offences, penalties, or consequences are not detailed in the provided text, it is generally understood that non-compliance with tax rulings can result in penalties under the Taxation Administration Act 1953. These penalties may include fines or other civil and criminal sanctions depending on the nature and severity of the breach (paragraph 7). It is important for entities and individuals to carefully follow the guidance provided to avoid potential legal repercussions.