The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from ato.gov.au/law.
NOTICE OF RULINGS |
Ruling number | Subject | Brief description |
FTD 2019/1 | Fuel tax: fuel tax credits – vehicles and satisfying environmental criteria | The Determination sets out the Commissioner’s view on interpretative issues in section 41-25 of the Fuel Tax Act 2006. The Determination applies both before and after date of issue. |
GSTR 2019/2 | Goods and services tax: determining the creditable purpose of acquisitions in a credit card issuing business | The Ruling provides advice on the application of paragraph 11‑15(2)(a) of the A New Tax System (Goods and Services) Tax Act 1999 to acquisitions in a credit card issuing business. |
LCR 2019/5 | Base rate entities and base rate entity passive income | The Ruling provides advice on the Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Act 2018, including what amounts comprise ‘base rate entity passive income’. The Ruling applies from the 2017-18 income year. |
TR 2019/6 | Income tax: the ‘in Australia’ requirement for certain deductible gift recipients and income tax exempt entities | The Ruling the Commissioner’s view on certain conditions in the Income Tax Assessment Act 1997 dealing with deductible gift recipients (DGRs) and exempt entities. The Ruling applies to years of income commencing both before and after issue. |
TD 2019/14 | Income tax: will a trust split arrangement of the type described in this Determination cause a new trust to be settled over some but not all assets of the original trust with the result that CGT event E1 in subsection 104‑55(1) of the Income Tax Assessment Act 1997 happens? | The Ruling sets out the Commissioner’s position on the outcome of trust splitting arrangements as described in the Ruling. The Ruling applies before and after date of issue. |
NOTICE OF ADDENDA |
Ruling number | Subject | Brief description |
GSTR 2006/3 | Goods and services tax: determining the extent of creditable purpose for providers of financial supplies | The Addendum clarifies existing principles including how a direct estimation system operates as part of an apportionment method, and makes other minor updates. The Addendum applies both before and after its date of issue. |
LCR 2016/12 | Superannuation reform: total superannuation balance | The Addendum amends Law Companion Ruling LCR 2016/12 to reflect amendments made by the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019, and the Treasury Laws Amendment (2018 Measures No. 4) Act 2019. The amendments made by the Addendum apply from the date of effect of the amending law. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued various rulings and addenda under the authority of the Australian Taxation Office, as published in Gazette C2019G01134. These rulings provide clarification and guidance on specific interpretative issues and applications of various tax laws, including the Fuel Tax Act 2006, the A New Tax System (Goods and Services) Tax Act 1999, the Income Tax Assessment Act 1997, and the Treasury Laws Amendment Acts. The rulings and addenda address gaps and complexities in tax legislation to ensure taxpayers and tax practitioners have a clear understanding of the law's application. For instance, they clarify matters such as fuel tax credits for environmentally compliant vehicles, the creditable purpose of acquisitions in credit card issuing businesses, the definition and application of base rate entity passive income, the 'in Australia' requirement for deductible gift recipients and exempt entities, and the outcomes of trust splitting arrangements. These rulings aim to assist in the correct application of tax laws and to reduce disputes by providing definitive guidance from the Commissioner of Taxation.
Scope and Application
The Commissioner of Taxation, Chris Jordan, has issued several rulings that provide clarification on various aspects of Australian tax legislation, which are applicable to taxpayers and businesses operating within Australia. These rulings pertain to the interpretation and application of sections within the Fuel Tax Act 2006, the A New Tax System (Goods and Services) Tax Act 1999, the Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Act 2018, and the Income Tax Assessment Act 1997. They cover specific matters such as fuel tax credits, determining the creditable purpose of acquisitions in a credit card issuing business, base rate entity passive income, and the 'in Australia' requirement for deductible gift recipients and income tax exempt entities. Each ruling applies to both pre-existing and future transactions, ensuring that taxpayers have a clear understanding of the legislative requirements. Additionally, the rulings may be updated or clarified through addenda, which also apply to both past and future transactions, as demonstrated by the amendments made to Law Companion Ruling LCR 2016/12.
Key Provisions
The gazetted rulings issued by the Commissioner of Taxation provide significant clarification on various aspects of Australian tax law. Firstly, FTD 2019/1 (section 41-25 of the Fuel Tax Act 2006) provides guidance on fuel tax credits for vehicles that meet specific environmental criteria. This ruling applies to situations both before and after its issuance date. GSTR 2019/2 (paragraph 11-15(2)(a) of the A New Tax System (Goods and Services) Tax Act 1999) offers advice on determining the creditable purpose of acquisitions in a credit card issuing business. LCR 2019/5 (Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Act 2018) clarifies what constitutes 'base rate entity passive income', with application from the 2017-18 income year. TR 2019/6 (Income Tax Assessment Act 1997) explains the 'in Australia' requirement for deductible gift recipients and exempt entities, and applies to income years commencing both before and after the ruling’s issuance. TD 2019/14 (subsection 104-55(1) of the Income Tax Assessment Act 1997) addresses the consequences of trust splitting arrangements on capital gains tax events.
These rulings impose specific obligations and requirements on the entities and individuals they govern. For instance, entities claiming fuel tax credits must ensure their vehicles meet the specified environmental criteria, as outlined in FTD 2019/1. Businesses involved in credit card issuing must correctly determine the creditable purpose of their acquisitions to comply with GSTR 2019/2. Base rate entities must accurately identify and report passive income as per LCR 2019/5. Deductible gift recipients and exempt entities must ensure compliance with the 'in Australia' requirement as detailed in TR 2019/6. Trusts must consider the impact of trust splitting arrangements on capital gains tax as per TD 2019/14.
Failure to comply with these rulings can result in various legal consequences. For example, incorrect claims for fuel tax credits or GST credits can lead to penalties and additional tax liabilities. Base rate entities that fail to correctly identify and report passive income may face fines and other penalties under the Income Tax Assessment Act 1997. Deductible gift recipients and exempt entities that do not comply with the 'in Australia' requirement may lose their tax-exempt status. Trusts that improperly split assets may incur capital gains tax liabilities. The specific penalties for non-compliance will depend on the nature and severity of the breach, as outlined in the relevant tax legislation.