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 RULING |
Ruling Number | Subject | Brief Description |
PR 2015/9 | Income tax: OnePath Life Limited – OneCare Policy – Life Cover, Total and Permanent Disability Cover and/or Trauma Cover – Value Protector Option | The Product Ruling sets out the Commissioner’s position for policy owners, or their nominated beneficiaries, under the OneCare Policy offered by OnePath Life Limited in respect of Life Cover, Total and Permanent Disability Cover and/or Trauma Cover. The Ruling applies from 1 July 2015. |
NOTICE OF ADDENDA |
Ruling Number | Subject | Brief Description |
GSTR 2003/16 | Goods and services tax: inducements to enter into a lease of commercial premises | The Addendum amends GSTR 2003/16 to clarify the facts of Case S41 17 NZTC 7280 referred to in paragraph 51 of the Ruling. The Addendum applies both before and after its date of issue. |
PR 2014/14 | Income tax: OnePath Life Limited – OneCare Policy – Life Cover, Total and Permanent Disability Cover and/or Trauma Cover | The Addendum amends PR 2014/14 to incorporate amendments to Division 118 of the Income Tax Assessment Act 1997 in respect of compensation and insurance policy receipts. The Addendum applies on and from 1 July 2014. |
NOTICE OF WITHDRAWAL |
Ruling Number | Subject | Brief Description |
TD 2014/21 | Income tax: where a right to acquire a beneficial interest in a share is granted subject to shareholder approval, is the right an 'indeterminate right' within the meaning of subsection 83A-340(1) of the Income Tax Assessment Act 1997? | The Determination is withdrawn as it is inconsistent with the reasoning in the Federal Court of Davies v. FC of T [2015] FCA 773; 2015 ATC 20-520. The Determination is withdrawn on and from 9 September 2015. |
NOTICE OF ERRATUM |
Ruling Number | Subject | Brief Description |
CR 2007/36 | Income tax: Medal Incentive Funding payments provided by the Australian Olympic Committee | The Erratum corrects the year within the header of the Addendum to CR 2007/36 published on 26 August 2015. The Erratum applies on and from 26 August 2015. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued a series of notifications under the Commissioner of Taxation Act 1997, which was enacted to provide for the administration of the taxation laws and to establish the position of the Commissioner of Taxation. These notifications include Product Rulings, Addendums, and a Determination that has since been withdrawn. One of the rulings, PR 2015/9, sets out the Commissioner's position for policy owners or their nominated beneficiaries under the OneCare Policy offered by OnePath Life Limited, addressing life cover, total and permanent disability cover, and trauma cover, effective from 1 July 2015. Another ruling, GSTR 2003/16, has been amended to clarify the facts of Case S41 17 NZTC 7280 in relation to inducements to enter into a lease of commercial premises. Additionally, PR 2014/14 was amended to incorporate changes to Division 118 of the Income Tax Assessment Act 1997 concerning compensation and insurance policy receipts, effective from 1 July 2014. Meanwhile, TD 2014/21, which dealt with whether a right to acquire a beneficial interest in a share is an 'indeterminate right' under the Income Tax Assessment Act 1997, was withdrawn on 9 September 2015 due to inconsistency with the Federal Court's reasoning in Davies v. FC of T.
Scope and Application
The Gazetted notices from the Commissioner of Taxation provide specific rulings and amendments concerning tax laws and their application. These rulings pertain to particular policies and conditions, such as the OneCare Policy offered by OnePath Life Limited, which involves life cover, total and permanent disability cover, and trauma cover. The rulings specify the tax treatment of these policies from 1 July 2015 onwards, thereby applying to policy owners or their nominated beneficiaries. Additionally, there are amendments and corrections to previous rulings that address issues like inducements to lease commercial premises and the treatment of compensation and insurance policy receipts, effective from the dates specified. The rulings cover a variety of tax matters, including income tax and goods and services tax, and provide clarity and guidance for taxpayers and practitioners on specific transactions and legislative provisions. These notices are integral to ensuring compliance with Australian tax laws and interpreting the applicable statutes correctly.
Key Provisions
The primary sections in these rulings provide specific guidance on tax treatment for various policy types and transactions. PR 2015/9 (Ruling Number PR 2015/9) outlines the Commissioner's position on the taxation of Life Cover, Total and Permanent Disability Cover, and/or Trauma Cover under the OneCare Policy offered by OnePath Life Limited, effective from 1 July 2015. GSTR 2003/16 (Ruling Number GSTR 2003/16) discusses the goods and services tax implications of inducements to enter into a lease of commercial premises, with an addendum clarifying the facts of Case S41 17 NZTC 7280. PR 2014/14 (Ruling Number PR 2014/14) addresses income tax implications of the OneCare Policy, with an addendum incorporating amendments to Division 118 of the Income Tax Assessment Act 1997, effective from 1 July 2014. TD 2014/21 (Ruling Number TD 2014/21) has been withdrawn due to inconsistency with the Federal Court's reasoning in Davies v. FC of T, effective from 9 September 2015. Lastly, CR 2007/36 (Ruling Number CR 2007/36) corrects an error in the year of the Addendum, effective from 26 August 2015.
These rulings impose specific obligations and requirements on entities and individuals governed by them. Policy owners and their beneficiaries under the OneCare Policy must adhere to the tax treatment guidelines provided in PR 2015/9 and PR 2014/14, including any amendments incorporated by the addenda. For leases of commercial premises, GSTR 2003/16 provides clarity on the GST implications of inducements, requiring adherence to the specified conditions to avoid GST liabilities. CR 2007/36, following its erratum, requires accurate referencing of the year in discussions regarding Medal Incentive Funding payments by the Australian Olympic Committee.
Failure to comply with these rulings can result in various civil and criminal consequences. For instance, incorrect application of the tax provisions in PR 2015/9 and PR 2014/14 may lead to assessments and penalties under the Income Tax Assessment Act 1997. GSTR 2003/16 may result in GST liabilities if inducements are not properly accounted for. The withdrawal of TD 2014/21 indicates that reliance on its previous content may lead to misapplication of tax law. Penalties for non-compliance can include fines, interest on unpaid taxes, and in severe cases, prosecution under the relevant taxation acts. The exact penalties vary depending on the nature and extent of the breach but are outlined within the respective acts.