Notice of Rulings 14 February 2024
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 rulings, copies of which can be obtained from ato.gov.au/law
NOTICE OF RULINGS |
Ruling number | Subject | Brief description |
CR 2024/7 | Tamboran Resources Limited – scrip for scrip roll‑over | This Ruling sets out the income tax consequences for the former shareholders of Tamboran Resources Limited who disposed of those shares to Tamboran Resources Corporation and received Tamboran US HoldCo Chess Depositary Interests as consideration on 13 December 2023. The Ruling applies from 1 July 2023 to 30 June 2024. |
CR 2024/8 | Danakali Ltd – return of capital and special dividend | This Ruling sets out the income tax consequences for shareholders of Danakali Ltd who received the unfranked special dividend and the return of capital payment on 8 January 2024. The Ruling applies from 1 July 2023 to 30 June 2024. |
NOTICE OF ADDENDUM |
Ruling number | Subject | Brief description |
GSTR 2002/5 | Goods and services tax: when is a ‘supply of a going concern’ GST-free? | This Addendum amends Goods and Services Tax Ruling GSTR 2002/5 to update a legislative reference and correct typographical errors. Items 1 and 2 of this Addendum apply from 1 April 2019. Items 3, 4 and 5 of this Addendum apply from 16 October 2002. |
Overview
The Taxation Administration Act 1953 was enacted to streamline and modernise the administration of taxation laws in Australia, addressing the need for a cohesive framework to facilitate the efficient collection and enforcement of taxes. The Act provides the legislative foundation for the Australian Taxation Office (ATO) to administer Commonwealth revenue laws, ensuring compliance and fairness in the tax system. By consolidating various taxation administration provisions, the Act aims to enhance the clarity and accessibility of tax laws for both taxpayers and the ATO. The policy objective behind the Act is to establish a robust and effective tax administration system that supports the economic objectives of the government while ensuring taxpayers' rights are protected. The Act achieves this by empowering the Commissioner of Taxation to issue public rulings and amendments to rulings, thereby providing certainty and guidance on the application of tax laws in specific circumstances.
Scope and Application
The Notifiable Instrument F2024N00137, issued under the authority of the Commissioner of Taxation, provides public rulings that pertain to specific income tax consequences for particular corporate transactions. These rulings apply to former shareholders of Tamboran Resources Limited and Danakali Ltd who were involved in specific transactions during the period from 1 July 2023 to 30 June 2024. These rulings serve to clarify the tax implications for these shareholders in relation to the scrip-for-scrip rollover involving Tamboran Resources Limited and the receipt of unfranked special dividends and return of capital payments from Danakali Ltd. Additionally, the instrument includes an addendum to a pre-existing Goods and Services Tax Ruling, GSTR 2002/5, updating legislative references and correcting typographical errors, with certain items applying retroactively from 1 April 2019 and others from 16 October 2002. The scope of this Notifiable Instrument extends to individuals and entities directly impacted by these transactions, with the rulings providing authoritative guidance on tax obligations and entitlements within the specified timeframe.
Key Provisions
The notifiable instrument issued by the Commissioner of Taxation, Chris Jordan, under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, provides public rulings and an addendum to previous rulings. The primary public rulings announced in this instrument are CR 2024/7 and CR 2024/8. CR 2024/7 addresses the income tax consequences for the former shareholders of Tamboran Resources Limited who exchanged their shares for Tamboran US HoldCo Chess Depositary Interests on 13 December 2023. This ruling applies from 1 July 2023 to 30 June 2024. Similarly, CR 2024/8 outlines the income tax implications for shareholders of Danakali Ltd who received an unfranked special dividend and a return of capital payment on 8 January 2024, also applying from 1 July 2023 to 30 June 2024.
The obligations imposed by these rulings require the affected parties to adhere to the specified income tax consequences as outlined in the respective rulings. For CR 2024/7, former shareholders of Tamboran Resources Limited must ensure that they properly account for the income tax implications of their scrip-for-scrip roll-over. Likewise, shareholders of Danakali Ltd must take into consideration the tax implications of the unfranked special dividend and return of capital as per CR 2024/8. These rulings are designed to provide clarity and guidance to taxpayers in navigating their tax obligations in these specific scenarios.
The notifiable instrument also includes an addendum to Goods and Services Tax Ruling GSTR 2002/5, which updates a legislative reference and corrects typographical errors. Items 1 and 2 of this addendum apply from 1 April 2019, while items 3, 4, and 5 apply from 16 October 2002. The obligations under this addendum require businesses to ensure that they correctly interpret and apply the updated information regarding the GST-free supply of a going concern. Failure to comply with these rulings and the addendum could result in incorrect tax assessments, potential audits, and penalties. The specific penalties for breaches are not detailed in the notifiable instrument, but generally, penalties for non-compliance with taxation rulings can include fines and interest on any unpaid taxes.