COMMISSIONER OF TAXATION
The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from http://ato.gov.au/law.
NOTICE OF RULINGS |
Ruling Number | Subject | Brief Description |
CR 2017/35 | Fringe benefits tax: corporate clients of Statewide Novated Leasing Pty Ltd and its subsidiaries (Statewide) who participate in Statewide’s bus travel benefit scheme | The Ruling sets out the Commissioner’s position on employers who are clients of Statewide Novated Leasing Pty Ltd and its subsidiaries that provide their employees with a smartcard enabling them to travel on buses only between their place of residence and place of employment. The Ruling applies from 1 April 2017 to 31 March 2022. |
CR 2017/36 | Fringe benefits tax: employer contributions to the Australian Construction Industry Redundancy Trust (ACIRT) | The Ruling sets out the Commissioner’s position on employers who make a contribution to the Australian Construction Industry Redundancy Trust (ACIRT) for an employee who is a member of ACIRT. The Ruling applies from 1 April 2017 to 31 March 2022.. |
PR 2017/6 | Income tax: tax consequences for a borrower being charged a discounted home loan interest rate calculated under Loan Reducer | The Ruling sets out the Commissioner’s position on tax consequences for a borrower being charged a discounted home loan interest rate calculated under Loan Reducer. The Ruling applies prospectively from 1 July 2017. It therefore applies only to the specified class of entities that enter into the scheme from 1 July 2017 until 30 June 2020, being its period of application. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued certain Rulings under the Taxation Administration Act 1953, which is the primary legislation governing the administration of Australian tax law. These rulings, available on the Australian Taxation Office website, provide clarity on specific issues related to fringe benefits tax and income tax. CR 2017/35 and CR 2017/36 address fringe benefits tax in relation to employers who are clients of Statewide Novated Leasing Pty Ltd and its subsidiaries, and employers who contribute to the Australian Construction Industry Redundancy Trust (ACIRT) respectively, with both rulings applying from 1 April 2017 to 31 March 2022. PR 2017/6, which applies from 1 July 2017 to 30 June 2020, provides guidance on the tax consequences for borrowers being charged a discounted home loan interest rate calculated under Loan Reducer. These rulings aim to provide certainty and assist taxpayers in understanding their tax obligations.
Scope and Application
The rulings issued by the Commissioner of Taxation under the Commonwealth legislation apply specifically to corporate clients of Statewide Novated Leasing Pty Ltd and its subsidiaries who participate in the bus travel benefit scheme, employers contributing to the Australian Construction Industry Redundancy Trust (ACIRT), and borrowers affected by discounted home loan interest rates calculated under the Loan Reducer scheme. These rulings provide clarity on fringe benefits tax and income tax implications for the entities and individuals involved in these specific arrangements. The scope of the rulings is limited to the time period specified, with CR 2017/35 and CR 2017/36 applying from 1 April 2017 to 31 March 2022, and PR 2017/6 applying prospectively from 1 July 2017 until 30 June 2020. These rulings aim to provide certainty and guidance to taxpayers involved in these particular schemes, ensuring compliance with the relevant tax laws.
Key Provisions
The main operative sections of the legislation include CR 2017/35, CR 2017/36, and PR 2017/6. CR 2017/35 outlines the Commissioner’s position on fringe benefits tax for corporate clients of Statewide Novated Leasing Pty Ltd and its subsidiaries, specifically regarding their provision of smartcards to employees for bus travel between home and work (CR 2017/35). CR 2017/36 details the tax treatment for employers who contribute to the Australian Construction Industry Redundancy Trust (ACIRT) on behalf of their employees who are members of ACIRT (CR 2017/36). PR 2017/6 addresses the income tax consequences for borrowers who are charged a discounted home loan interest rate calculated under Loan Reducer (PR 2017/6).
These Rulings impose specific obligations on the parties they govern. Employers who participate in Statewide’s bus travel benefit scheme must ensure their use of smartcards for employee travel is in line with the provisions set out in CR 2017/35. This includes correctly assessing and reporting any fringe benefits tax implications. Similarly, employers contributing to ACIRT must adhere to the guidelines in CR 2017/36 to ensure compliance with fringe benefits tax obligations. For borrowers under the Loan Reducer scheme, PR 2017/6 requires them to be aware of the tax implications of the discounted interest rate, including how it may affect their overall tax position.
Breaches of these Rulings may lead to civil or criminal consequences. While specific penalties are not detailed in the text, it is known that the Commissioner of Taxation has the authority to take action against non-compliance with tax laws, which can include penalties and interest on any unpaid tax. For example, failure to report fringe benefits tax correctly can result in penalties that are typically calculated as a percentage of the tax owed. Additionally, in cases of deliberate or reckless disregard of tax obligations, criminal penalties may apply, which could include fines and imprisonment.