Notice of Rulings

Overview

The Taxation Rulings Notice issued by the Commissioner of Taxation, Chris Jordan, provides clarity on specific issues under the Australian tax law. The rulings cover various topics, including the tax treatment of Australian Federal Police personnel deployed to Jordan as part of Operation Gallant Phoenix (CR 2018/52), the fringe benefits tax implications for employers who use the BankVic Everyday Expenses Card (CR 2018/53), and the income tax consequences of the demerger of Cowan Lithium Limited by Tawana Resources NL (CR 2018/54). Each ruling specifies its application period and, where applicable, its ongoing relevance to entities that entered into the relevant scheme during the ruling's term. These rulings were introduced to provide certainty and guidance to taxpayers regarding their obligations and entitlements in specific circumstances, thereby ensuring compliance with the tax law. The rulings reflect the policy objective of the Australian Taxation Office to provide clear and accessible guidance to taxpayers, helping them to understand and comply with their tax obligations.

Scope and Application

The rulings outlined in the notice pertain to specific scenarios within the Australian taxation framework. CR 2018/52 addresses the income tax implications for Australian Federal Police employees deployed to Jordan as part of Operation Gallant Phoenix. This ruling applies to these specific individuals from 1 May 2016, clarifying their tax obligations during deployment. Similarly, CR 2018/53 focuses on fringe benefits tax for employers who use Police Financial Services Limited, trading as BankVic, and specifically the BankVic Everyday Expenses Card. This ruling applies to employers subject to sections 57A or 65J of the Fringe Benefits Tax Assessment Act 1986, effective from 1 April 2018 to 31 March 2024, and continues to apply to entities that entered into the scheme during this period. Lastly, CR 2018/54 deals with the income tax implications for shareholders involved in the demerger of Cowan Lithium Limited by Tawana Resources NL. This ruling applies from 1 July 2018 to 30 June 2019, and remains applicable to entities that were part of the scheme during this time. These rulings are integral in providing clarity and guidance to the relevant parties on their tax obligations under specific circumstances.

Key Provisions

The Commissioner of Taxation has issued three rulings, each addressing specific tax matters under the Australian tax framework. The first ruling, CR 2018/52, concerns the income tax assessable income of employees of the Australian Federal Police (AFP) who are deployed to Jordan as part of Operation Gallant Phoenix. This ruling is applicable from 1 May 2016 and outlines the Commissioner's position on how such deployments should be treated for income tax purposes. The second ruling, CR 2018/53, deals with fringe benefits tax for employers who are clients of Police Financial Services Limited, trading as BankVic, and who fall under sections 57A or 65J of the Fringe Benefits Tax Assessment Act 1986. This ruling specifies the Commissioner's position on the use of the BankVic Everyday Expenses Card by employees. It is effective from 1 April 2018 to 31 March 2024 and will continue to apply to entities that entered into the specified scheme within the ruling's term. The third ruling, CR 2018/54, concerns the demerger of Cowan Lithium Limited by Tawana Resources NL. It outlines the Commissioner's position on the tax implications for shareholders involved in this demerger. The ruling applies from 1 July 2018 to 30 June 2019 and will continue to apply to all entities within the specified class who participated in the demerger during the ruling's term. These rulings impose specific obligations on the parties involved. For example, AFP employees deployed to Jordan must ensure their income tax is assessed in accordance with CR 2018/52. Employers using the BankVic Everyday Expenses Card need to comply with the fringe benefits tax provisions outlined in CR 2018/53, and shareholders involved in the Cowan Lithium Limited demerger must adhere to the tax implications set out in CR 2018/54. Failure to comply with these rulings can lead to tax liabilities or reassessments. In terms of penalties and consequences for breach, the rulings themselves do not specify particular penalties. However, non-compliance with tax laws and rulings can result in penalties under the general tax legislation. For instance, under the Income Tax Assessment Act 1997, penalties may be imposed for underpayment of tax, failure to lodge tax returns, or providing false or misleading statements. The maximum penalties can vary, but they may include fines or imprisonment in more severe cases.