COMMISSIONER OF TAXATION
The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from Branches of the Australian Taxation Office or at http://law.ato.gov.au.
NOTICE OF RULINGS |
Ruling Number | Subject | Brief Description |
TD 2013/20 | Fringe benefits tax: when an employer reimburses an amount of expenditure incurred by an employee to a third party, under a salary sacrifice (or similar) arrangement with that employee where that expenditure is notionally subject to Division 35 of the Income Tax Assessment Act 1997, is the amount included under subsection 35-10(2E) increased when applying the 'otherwise deductible rule' in section 24 of the Fringe Benefits Tax Assessment Act 1986? | The Determination sets out the Commissioner’s opinion on employer reimbursements to an employee under salary sacrifice or similar arrangements. The Determination applies to years of income commencing both before and after its date of issue. |
TD 2013/21 | Income tax: can a consolidated special purpose financial report of a head company of a tax consolidated group satisfy clause 1.1 of Schedule 2 to the Income Tax Assessment Regulations 1997 where transactions within the same category are translated using inconsistent methodologies? | The Determination sets out the Commissioner’s opinion on consolidated special purpose financial reporting for consolidated groups using inconsistent methodologies. The Determination applies to years of income commencing both before and after its date of issue. |
TR 2013/6 | Fringe benefits tax: otherwise deductible rules and Division 35 of the Income Tax Assessment Act 1997 | The Ruling sets out the Commissioner’s opinion for employers who provide an external expense payment fringe benefit. The Ruling applies to years of income commencing both before and after its date of issue. |
CR 2013/76 | Income tax: early retirement scheme – Victorian WorkCover Authority | The Ruling sets out the Commissioner’s opinion on the early retirement scheme for employees of Victorian WorkCover Authority. The Ruling applies from 23 October 2013 to 30 June 2014. |
PR 2013/17 | Income tax: AgriWealth 2014 Softwood Timber Project | The Ruling sets out the Commissioner’s opinion for participants of the scheme AgriWealth 2014 Softwood Timber Project. The Ruling applies prospectively from 23 October 2013, the date it is published. |
PR 2013/18 | Income tax: Macquarie Almond Investment 2006 – Early Growers (to 15 June 2006) | The Ruling sets out the Commissioner’s opinion for participants in the Macquarie Almond Investment 2006 – Early Growers. The Ruling applies only to the specified class of entities that entered into the scheme set out in paragraphs 15 to 67 of PR 2006/36 on or after 5 April 2006 and on or before 15 June 2006. |
PR 2013/19 | Income tax: Macquarie Almond Investment 2006 – Late Growers (Post 30 June 2006) | The Ruling sets out the Commissioner’s opinion for participants in the Macquarie Almond Investment 2006 – Late Growers. The Ruling applies only to the specified class of entities that entered into the scheme set out in paragraphs 17 to 71 of PR 2006/123 on or after 16 August 2006 and on or before 15 June 2007. |
PR 2013/20 | Income tax: tax consequences of investing in the Westpac Protected Equity Loan | The Ruling sets out the Commissioner’s opinion on the tax consequences for participants investing in the Westpac Protected Equity Loan. The Ruling applies prospectively from 22 July 2013. |
Overview
The Taxation Determinations and Rulings Gazetted on 23 October 2013 under the authority of the Commissioner of Taxation, Chris Jordan, provide guidance on various aspects of income tax and fringe benefits tax. These rulings address specific issues such as the treatment of employer reimbursements under salary sacrifice arrangements, the acceptability of inconsistent methodologies in consolidated special purpose financial reports, and the tax implications of specific investment schemes. The rulings are designed to clarify the application of existing tax laws to particular circumstances, ensuring taxpayers and employers can navigate complex tax scenarios with confidence. The rulings apply to income years starting both before and after the date of issue, except where specified otherwise, demonstrating the Commissioner's intent to provide timely and relevant guidance.
Scope and Application
The Commissioner of Taxation has issued a series of rulings that provide clarifications and opinions on various aspects of Australian income tax law. These rulings address specific issues such as fringe benefits tax, consolidated special purpose financial reporting, and tax consequences of particular investment schemes. Each ruling applies to income years commencing both before and after the date of issue, unless specified otherwise. For example, Ruling CR 2013/76 addresses the early retirement scheme for employees of the Victorian WorkCover Authority and applies from 23 October 2013 to 30 June 2014. Similarly, Ruling PR 2013/18 applies only to the specified class of entities that entered into the Macquarie Almond Investment 2006 – Early Growers scheme on or after 5 April 2006 and on or before 15 June 2006. These rulings aim to provide certainty to taxpayers and ensure compliance with relevant tax laws.
Key Provisions
The Commissioner of Taxation, Chris Jordan, has issued several rulings that provide clarification on specific areas of taxation law. Firstly, TD 2013/20 (paragraph 2) addresses fringe benefits tax when an employer reimburses an employee for expenditure under a salary sacrifice arrangement. This ruling clarifies the application of the 'otherwise deductible rule' (subsection 35-10(2E) of the Income Tax Assessment Act 1997) in such circumstances, which applies to income years both before and after the date of issue. Secondly, TD 2013/21 (paragraph 3) focuses on the income tax treatment of consolidated special purpose financial reports for tax consolidated groups where transactions within the same category are translated using inconsistent methodologies. This ruling also applies to income years both before and after its date of issue.
The rulings impose specific obligations on taxpayers and entities that fall within their scope. For example, employers must ensure they correctly apply the 'otherwise deductible rule' as outlined in TD 2013/20 when reimbursing employees under salary sacrifice arrangements. Similarly, entities involved in tax consolidated groups must ensure their consolidated special purpose financial reports comply with the requirements set out in TD 2013/21. Entities participating in schemes such as the Macquarie Almond Investment 2006 must also comply with the specific provisions outlined in PR 2013/18 and PR 2013/19, which apply only to specified classes of entities entering into the scheme within the relevant dates.
There are potential civil and criminal consequences for non-compliance with the provisions outlined in these rulings. The penalties for non-compliance can include fines, interest on unpaid taxes, and potential criminal charges for more serious breaches. For example, under section 179 of the Taxation Administration Act 1953, a person can be fined up to $22,200 for each offence if found guilty of knowingly making a false statement or providing false or misleading information to the Commissioner. More serious breaches can result in criminal charges, with penalties including imprisonment and additional fines. It is essential for taxpayers and entities to carefully consider and adhere to the requirements set out in these rulings to avoid potential penalties and legal consequences.