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 |
CR 2014/81 | Income tax: demerger of OMI Holdings Limited by Donaco International Limited | The Ruling sets out the Commissioner’s position on the holders of ordinary shares in Donaco International Limited (Donaco) who: (a) were listed on the share register of Donaco as at the Record Date (12 September 2014) for the demerger of shares in OMI Holdings Limited (OMI); (b) on the Record Date, held their shares in Donaco as neither revenue assets (as defined in section 977-50 of the Income Tax Assessment Act 1997 (ITAA 1997)) nor as trading stock (as defined in subsection 995-1(1) of the ITAA 1997) that is, broadly on capital account; (c) were either (i) a ‘resident of Australia’ as defined in subsection 6(1) of the Income Tax Assessment Act 1936 on the Record Date; or (ii) a foreign resident with non-portfolio interests in Donaco as at the Record Date; (d) a foreign resident whose shares in Donaco, or right to receive something of value in respect of shares in Donaco, they owned as at the Record Date, are not taxable Australian property (as that term is defined in section 855-15 of the ITAA 1997); (e) are not subject to the taxation of financial arrangements rules in Division 230 of the ITAA 1997 in relation to gains and losses on their Donaco shares. (Note – Division 230 will generally not apply to individuals, unless they have made an election for it to apply to them.) The Ruling applies from 1 July 2014 to 30 June 2015.. |
CR 2014/82 | Income tax: Dell Australia Pty Limited Restricted Stock Units | The Ruling sets out the Commissioner’s position on employees of Dell Australia Pty Limited who: - held a restricted stock unit (RSU) acquired on or after 1 July 2009 issued under the Amended and Restated 2002 Long-Term Incentive Plan and covered by a Dell Inc. Stock Unit Agreement which was amended and restated as a Dell Inc. Deferred Cash Replacement Agreement.
- are residents of Australia within the meaning of subsection 6(1) of the Income Tax Assessment Act 1936.
are not temporary residents within the meaning of that expression in subsection 995-1(1) of the Income Tax Assessment Act 1997. The Ruling applies from 1 January 2013. |
CR 2014/83 | Income tax: Bendigo and Adelaide Bank Limited – allotment of convertible preference shares | The Ruling sets out the Commissioner’s position on subscribers of Convertible Preference Shares 2 (CPS2) in Bendigo and Adelaide Bank Limited who: - are Australian residents (within the meaning of subsection 6(1) of the Income Tax Assessment Act 1936)
- hold their CPS2 on capital account, and
- are not subject to the taxation of financial arrangement rules in Division 230 of the Income Tax Assessment Act 1997 on financial arrangements under the scheme.
(Note - Division 230 will generally not apply to the financial arrangements of individuals, unless they have made an election for those rules to apply to them.). The Ruling applies from 10 October 2014 to 30 June 2023. |
CR 2014/84 | Income tax: The Imperial Tobacco Australia Limited Voluntary Early Retirement Scheme 2014 (VRS 2014) | The Ruling sets out the Commissioner’s position on all employees of Imperial Tobacco Australia Limited who receive a payment under the scheme. The Ruling applies from 9 October 2014 to 30 June 2015. |
NOTICE OF ADDENDA |
Ruling Number | Subject | Brief Description |
GSTR 2001/1 | Goods and services tax: supplies that are GST-free for tertiary education courses | Goods and Services Tax Ruling GSTR 2001/1 is amended to: - reflect the withdrawal and replacement of Goods and Services Tax Ruling GSTR 2000/20 Goods and services tax: commercial residential premises;
- reflect amendments made by the Tax Laws Amendment (2010 GST Administration Measures No.2) Act 2010 in relation to Subdivision 29-C of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act);
- reflect changes made by the Tax Laws Amendment (2007 Measures No. 4) Act 2007 to omit references to ‘Masters or Doctoral Course’ throughout the GST Act;
- reflect the latest Education Minister’s Determination made under subsections 3(1) and 5D(1) of the Student Assistance Act 1973, the Student Assistance (Education Institutions and Courses) Determination 2009 (No. 2); and
- reflect the Education Minister’s Determination made under paragraph (b) of the definition of ‘tertiary course’ in section 195-1 of the GST Act, the A New Tax System (Goods and Services Tax) (Tertiary Courses) Determination 2014.
The Addendum also makes other minor changes. The Addendum applies both before and after its date of issue, subject to the commencement and application provisions of each amending Act, Regulation or Legislative Determination to which it refers. |
PR 2008/23 | Income tax: Piangil Grower Project – 2008 | Product Ruling PR 2008/23 is amended to exercise the Commissioner’s discretion under section 35-55 of the Income Tax Assessment Act 1997 for the financial years ended 30 June 2014 and 30 June 2015, provided certain conditions are met. Product Ruling PR 2008/23 as also amended to correct errors in paragraph referencing. The Addendum applies on and from 8 October 2014. |
NOTICE OF WITHDRAWAL |
Ruling Number | Subject | Brief Description |
| | |
TD 2012/19 | Income tax: when is a non-share equity interest ‘issued at or through a permanent establishment’ for the purposes of paragraph 215-10(1)(c) of the Income Tax Assessment Act 1997? | TD 2012/19 is withdrawn with effect from 8 October 2014. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued several rulings and notices to clarify specific issues in income tax and goods and services tax (GST). These rulings were published in the Gazette under C2014G01656, addressing particular scenarios to ensure clarity and consistency in tax obligations and compliance for businesses and individuals. For instance, Ruling CR 2014/81 deals with the demerger of OMI Holdings Limited by Donaco International Limited, providing guidance on the tax treatment of shareholders under certain conditions. Similarly, Ruling CR 2014/82 addresses the tax treatment of restricted stock units issued to employees of Dell Australia Pty Limited, while Ruling CR 2014/83 covers the allotment of convertible preference shares in Bendigo and Adelaide Bank Limited. Ruling CR 2014/84 provides clarity on the tax implications of a voluntary early retirement scheme for employees of Imperial Tobacco Australia Limited. Additionally, amendments and updates to existing rulings such as GSTR 2001/1 and PR 2008/23 ensure that the tax framework remains current with legislative changes and administrative measures. The withdrawal of TD 2012/19 signifies the resolution of previously addressed issues, streamlining the tax guidance available.
Scope and Application
The Commissioner of Taxation, Chris Jordan, has issued a series of rulings under various Acts to clarify the tax treatment of specific financial and employment-related transactions. Ruling CR 2014/81 pertains to the demerger of OMI Holdings Limited by Donaco International Limited, focusing on the income tax implications for holders of ordinary shares in Donaco who meet certain criteria, including holding their shares on capital account and not being subject to the taxation of financial arrangements rules. This ruling applies from 1 July 2014 to 30 June 2015 and is relevant to both Australian residents and foreign residents with non-portfolio interests in Donaco. Ruling CR 2014/82 addresses the income tax treatment of restricted stock units held by employees of Dell Australia Pty Limited, applying from 1 January 2013. It excludes temporary residents and applies to those who acquired their restricted stock units under specific plans and agreements. Ruling CR 2014/83 concerns the allotment of convertible preference shares in Bendigo and Adelaide Bank Limited, applying from 10 October 2014 to 30 June 2023, and outlines the tax treatment for Australian residents holding these shares on capital account, excluding them from the taxation of financial arrangements rules. Lastly, Ruling CR 2014/84 provides clarity on the income tax treatment of payments made under The Imperial Tobacco Australia Limited Voluntary Early Retirement Scheme 2014, applying from 9 October 2014 to 30 June 2015. These rulings provide specific guidance on the taxation of these financial transactions within the Commonwealth of Australia.
Key Provisions
The main sections of the Commissioner's rulings concern specific tax situations, providing clarity and guidance for taxpayers. For instance, Ruling CR 2014/81 addresses the income tax implications for holders of ordinary shares in Donaco International Limited who meet certain criteria regarding their shareholding status and residency (section 977-50, 995-1(1), 6(1) of the Income Tax Assessment Act 1997 (ITAA 1997)). Similarly, Ruling CR 2014/82 pertains to the taxation of restricted stock units held by Australian resident employees of Dell Australia Pty Limited (subsection 6(1), 995-1(1) of the ITAA 1997). Ruling CR 2014/83 deals with the allotment of convertible preference shares in Bendigo and Adelaide Bank Limited, focusing on Australian residents holding these shares on capital account (subsection 6(1) of the ITAA 1997). Lastly, Ruling CR 2014/84 provides guidance on the taxation of payments made under the Imperial Tobacco Australia Limited Voluntary Early Retirement Scheme 2014 for its employees (subsection 6(1) of the ITAA 1936).
These rulings impose certain obligations and requirements on the parties involved. For instance, under Ruling CR 2014/81, taxpayers must ensure their shares in Donaco are held on capital account and meet the residency criteria to benefit from the specified tax treatment. Under Ruling CR 2014/82, employees receiving restricted stock units must comply with the terms of their stock unit agreements and ensure they meet the residency requirements. In Ruling CR 2014/83, subscribers of convertible preference shares must be Australian residents and hold the shares on capital account, and not be subject to the taxation of financial arrangements rules. Under Ruling CR 2014/84, employees receiving payments under the voluntary early retirement scheme must comply with the terms of the scheme and ensure they are eligible for the specified tax treatment.
Any breach of the conditions specified in these rulings can lead to civil or criminal consequences. For instance, if taxpayers do not meet the specified conditions, they may be subject to additional tax liabilities or penalties. The Commissioner of Taxation may take action to recover any tax that should have been paid but was not, which could include issuing assessments, penalties, and interest charges. Additionally, if the breach is found to be deliberate or fraudulent, criminal charges could be pursued, leading to fines or imprisonment. The specific penalties would depend on the nature and extent of the breach, as well as the applicable tax laws.