Notice of Rulings 8 September 2021

Overview

The Notifiable instrument F2021N00222, dated 8 September 2021, contains public rulings issued by the Commissioner of Taxation, Chris Jordan, under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953. This notifiable instrument aims to provide clarity and guidance on specific tax matters and the associated administrative processes. The rulings published are accessible to the public via the Australian Taxation Office's website, ato.gov.au/law. CR 2021/59 addresses the issue of compensable losses made by holders of exploration licences or assessment leases over land under access arrangements, while PR 2021/10 focuses on the tax consequences of the Morgan Stanley Option and Loan Facility. These rulings are designed to assist taxpayers in understanding their obligations and entitlements, thereby ensuring compliance with the tax laws. The enacting body for these rulings is the Commissioner of Taxation, acting under the authority granted by the Taxation Administration Act 1953. The policy objective behind these rulings is to offer clear and concise tax guidance to taxpayers, thereby reducing uncertainty and promoting voluntary compliance with tax obligations. By providing detailed explanations of complex tax scenarios, the Commissioner aims to enhance the transparency and predictability of the tax system, ultimately benefiting both taxpayers and the Australian Taxation Office.

Scope and Application

The Notifiable Instrument F2021N00222, issued under the authority of the Commissioner of Taxation, Chris Jordan, provides public rulings on two specific matters related to taxation, both of which are effective within specified periods. The first ruling, CR 2021/59, concerns the access arrangements under the Mining Act 1992 (NSW) between holders of exploration licences and assessment leases and landholders on whose land prospecting operations are undertaken. This ruling clarifies whether payment of compensable losses made by holders of such licences or leases is considered as consideration for a supply made by a land owner under an access arrangement. This ruling is applicable from 8 September 2021 to 8 September 2025, and it applies to entities involved in mining activities in New South Wales. The second ruling, PR 2021/10, deals with the tax consequences of the Morgan Stanley Option and Loan Facility, offered, arranged, and distributed by Morgan Stanley Australia Securities Limited. This ruling specifies the tax implications of this particular financial arrangement and is effective from 1 July 2021 to 30 June 2024. Both rulings are intended to provide clarity on specific tax matters, ensuring that the relevant entities understand their obligations and entitlements within the specified timeframes.

Key Provisions

The notifiable instrument F2021N00222 issued by the Commissioner of Taxation, Chris Jordan, provides two public rulings that are set to take effect from specific dates. Firstly, Ruling CR 2021/59 pertains to New South Wales Minerals Council Limited and addresses access arrangements under the Mining Act 1992 (NSW) between holders of exploration licences and assessment leases and landholders on whose land prospecting operations are undertaken (subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953). This ruling clarifies whether the payment of compensable losses made by holders of exploration licences or assessment leases over land is considered as consideration for a supply made by a land owner under an access arrangement. This ruling is effective from 8 September 2021 to 8 September 2025. The obligations and requirements imposed by these rulings pertain to the interpretation and application of tax laws in specific contexts. For Ruling CR 2021/59, entities involved in access arrangements under the Mining Act 1992 (NSW) must understand and apply the ruling to determine whether payments made are consideration for a supply. This requires careful documentation and compliance with the provisions of the ruling to ensure accurate tax reporting and avoid potential disputes. For Ruling PR 2021/10, entities involved in the Morgan Stanley Option and Loan Facility must comprehend the tax consequences outlined in the ruling. This includes understanding how the arrangement impacts their tax obligations, income reporting, and compliance with tax laws. In terms of consequences for non-compliance, breaches of the obligations and requirements outlined in these rulings could result in various civil and criminal penalties. For instance, providing incorrect information or failing to comply with the rulings could lead to fines, penalties, or legal action under the Taxation Administration Act 1953. Additionally, failure to adhere to the rulings may result in the disallowance of tax benefits or the imposition of interest and penalties on underpaid taxes. The specific penalties and consequences for non-compliance are detailed in the relevant sections of the Taxation Administration Act 1953 and may vary depending on the severity and intent of the breach.