Notice of Rulings

Overview

The Commissioner of Taxation, Chris Jordan, has issued two rulings under the Taxation Administration Act 1953, as part of the ongoing efforts to provide clarity on specific tax issues for certain entities. The first ruling, CR 2017/82, concerns the treatment of income tax in relation to the return of capital by holders of ordinary shares in Whitehaven Coal Limited. This ruling aims to clarify the tax implications for these shareholders, effective from 1 July 2017 to 30 June 2018, with ongoing applicability to entities that entered into the specified scheme during this period. The second ruling, CR 2017/83, addresses the tax treatment for members of the Pfizer Inc. Employee Share Scheme, outlining the Commissioner's position from 1 July 2014 to 30 June 2024, and continuing to apply to entities that were part of the scheme during the ruling's term. Both rulings serve to provide certainty and guidance to taxpayers affected by these specific schemes, aligning with the broader policy objective of ensuring compliance and fairness within the Australian tax system.

Scope and Application

The Commissioner of Taxation has issued two rulings, CR 2017/82 and CR 2017/83, which provide clarification on the tax treatment of specific financial arrangements. CR 2017/82 concerns holders of ordinary shares in Whitehaven Coal Limited and applies from 1 July 2017 to 30 June 2018, with ongoing application to entities that entered into the specified scheme during this period. This ruling is particularly relevant for entities that hold shares in Whitehaven Coal Limited and need to understand their tax obligations related to these holdings. CR 2017/83 pertains to members of the Pfizer Inc. Employee Share Scheme, applicable from 1 July 2014 to 30 June 2024, with continued application to entities that entered into the scheme within this timeframe. This ruling assists employees participating in Pfizer Inc.'s Employee Share Scheme by outlining their tax liabilities. Both rulings are accessible through the Australian Taxation Office's website, providing clarity and guidance for the specified entities and arrangements within their designated periods.

Key Provisions

The key provisions of the legislation, as outlined in Rulings CR 2017/82 and CR 2017/83, primarily concern specific tax treatments for shareholders in Whitehaven Coal Limited and members of the Pfizer Inc. Employee Share Scheme. Section (1) of CR 2017/82 addresses the tax treatment of returns of capital for holders of ordinary shares in Whitehaven Coal Limited. This ruling is applicable from 1 July 2017 to 30 June 2018 and remains in effect for entities that entered into the specified scheme during this period, even beyond the initial term. Similarly, section (1) of CR 2017/83 clarifies the tax treatment for members of Pfizer Inc.'s Employee Share Scheme. It is effective from 1 July 2014 to 30 June 2024 and applies to all entities within the specified class that entered into the scheme during the ruling's term, even after the specified period. The obligations imposed by these rulings on the respective parties are primarily centred around compliance with the specified tax treatments. For Whitehaven Coal Limited shareholders, this means adhering to the tax treatment outlined in CR 2017/82 concerning returns of capital. For members of the Pfizer Inc. Employee Share Scheme, they must comply with the provisions of CR 2017/83 regarding their tax obligations. Both rulings require that the entities maintain proper records and documentation to substantiate their compliance with the tax treatments prescribed by the Commissioner. In terms of consequences for non-compliance, while the rulings themselves do not explicitly state penalties, breaches of tax law in general can result in civil and criminal penalties. Civil penalties may include fines, interest on unpaid taxes, and penalties for late lodgment or payment. Criminal penalties can involve imprisonment, particularly for serious or repeated breaches. The maximum penalties depend on the nature and severity of the breach, but they can include substantial fines and imprisonment terms as determined by the courts under the relevant tax legislation.