Notice of Rulings 19 March 2025
The Commissioner of Taxation, Rob Heferen, 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 ADDENDA |
Ruling number | Subject | Brief description |
GSTR 2006/6 | Goods and services tax: improvements on the land for the purposes of Subdivision 38-N and Division 75 | This Addendum amends Goods and Services Tax Ruling GSTR 2006/6 to reflect the Full Federal Court’s decision in Commissioner of Taxation v Landcom [2022] FCAFC 204. The Full Federal Court held that the margin scheme provisions in the A New Tax System (Goods and Services Tax) Act 1999 apply separately to each freehold interest in land, even if several freehold interests are supplied as a single parcel of land. This Addendum applies both before and after its date of issue. |
CR 2024/58 | QV Equities Limited - scheme of arrangement | This Addendum amends Class Ruling CR 2024/58 to correct the 5-day volume-weighted average price of a QVE share and to edit for accessibility requirements. This Addendum applies from 1 July 2024 to 30 June 2025. |
Overview
The Commissioner of Taxation has issued a notifiable instrument under the Taxation Administration Act 1953, providing notice of two significant rulings. The first is an Addendum to Goods and Services Tax Ruling GSTR 2006/6, which was enacted to clarify the application of the margin scheme provisions under the A New Tax System (Goods and Services Tax) Act 1999 in relation to improvements on land. This follows the Full Federal Court’s decision in Commissioner of Taxation v Landcom [2022] FCAFC 204, which held that these provisions apply to each freehold interest in land, regardless of how the land is supplied. The second notice is an Addendum to Class Ruling CR 2024/58, which concerns QV Equities Limited and corrects the 5-day volume-weighted average price of a QVE share while also editing the ruling to meet accessibility requirements. This Addendum is effective from 1 July 2024 to 30 June 2025. The objective of these amendments is to ensure taxpayers have clear and accurate guidance on their obligations and entitlements under the tax laws.
Scope and Application
The Notice of Rulings issued on 19 March 2025 by the Commissioner of Taxation, Rob Heferen, pertains to two specific tax rulings and their amendments under the Taxation Administration Act 1953. The rulings address the application of goods and services tax (GST) on improvements made to land and the scheme of arrangement for QV Equities Limited. The first ruling, an Addendum to GSTR 2006/6, amends the original ruling to incorporate the Full Federal Court's decision in Commissioner of Taxation v Landcom, clarifying that the margin scheme provisions apply separately to each freehold interest in land, even if supplied as a single parcel. This amendment applies retroactively to situations before its issuance date as well as to future cases. The second ruling, an Addendum to CR 2024/58, corrects a numerical error in the 5-day volume-weighted average price of a QVE share and improves accessibility, applying from 1 July 2024 to 30 June 2025. These rulings are applicable to entities involved in transactions related to land improvements and those participating in the scheme of arrangement for QV Equities Limited, with the potential to impact tax liability and compliance for these entities.
Key Provisions
The Notifiable instrument F2025N00246 issued by the Commissioner of Taxation outlines amendments to two existing rulings, specifically GSTR 2006/6 and CR 2024/58. GSTR 2006/6, concerning the Goods and Services Tax (GST) on improvements to land under Subdivision 38-N and Division 75 of the A New Tax System (Goods and Services Tax) Act 1999, has been amended to incorporate the Full Federal Court's ruling in the case of Commissioner of Taxation v Landcom [2022] FCAFC 204. The amendment clarifies that the margin scheme provisions apply separately to each freehold interest in land, even if they are sold as a single parcel (section 358-5(4)). This ruling is effective both before and after its issuance date.
CR 2024/58, which pertains to the scheme of arrangement for QV Equities Limited, has also been amended. This Addendum corrects the 5-day volume-weighted average price of a QVE share and makes edits to improve accessibility. This amendment is applicable from 1 July 2024 to 30 June 2025.
Entities and individuals affected by these rulings are obligated to adhere to the new provisions outlined in the Addendums. For GSTR 2006/6, this means that when calculating GST for improvements on land, each freehold interest must be treated separately. For CR 2024/58, the updated pricing and accessibility improvements must be incorporated into any relevant transactions or communications. Failure to comply with these updated rulings could result in discrepancies in tax calculations or other regulatory issues.
The Notifiable instrument does not explicitly state penalties for non-compliance with the updated rulings; however, general tax law provisions apply. Non-compliance with tax rulings can lead to a range of consequences, including the imposition of penalties, interest on unpaid taxes, and potential legal action by the Commissioner of Taxation. The penalties can vary depending on the nature and severity of the non-compliance, but they may include fines or other financial penalties. It is crucial for affected parties to ensure they are fully compliant with these updated rulings to avoid any adverse consequences.