Notice of Rulings, Notice of Addenda, Notice of Withdrawals

Overview

The Commissioner of Taxation, Chris Jordan, has issued new and amended rulings under the Income Tax Assessment Act 1997, which aim to clarify the tax consequences for certain financial products and agreements. The rulings issued include PR 2019/3, which addresses the tax implications for customers entering into a Prepay Plus Agreement with Landmark Operations Limited from 1 July 2018 to 30 June 2021. Additionally, amendments to previous rulings PR 2018/2 and PR 2018/3 have been made to incorporate updated scheme documents, ensuring that the rulings remain current and relevant. The policy objective of these rulings is to provide taxpayers with certainty and guidance on the tax treatment of specified financial products and agreements, thereby facilitating compliance with the tax laws. The rulings are available on the Australian Taxation Office’s website and are effective from the dates specified in the notices.

Scope and Application

The Commissioner of Taxation has issued several rulings and an addendum that provide guidance on the taxation implications for specific financial arrangements and investments. Ruling PR 2019/3 addresses the tax consequences for a specified class of entities that enter into a Prepay Plus Agreement with Landmark Operations Limited between 1 July 2018 and 30 June 2021. This ruling applies to entities involved in such agreements within the stated timeframe, offering clarity on their tax obligations. Similarly, Ruling PR 2018/2 and its subsequent Addendum pertain to the tax implications of investing in Macquarie Equity Lever Instalment Receipts, with the Addendum incorporating updates to the scheme documents, effective both before and after its issue date. Likewise, Ruling PR 2018/3 and its Addendum relate to the tax consequences of investing in equities using the Macquarie Geared Equities Investment Plus, with the Addendum reflecting the Supplementary Product Brochure dated 24 May 2019, applicable both before and after the Addendum’s issuance. Additionally, the Commissioner has withdrawn Rulings TD 2012/5 and TD 2013/4, which previously addressed the reasonable food component of a living-away-from-home allowance for expatriate employees under the Fringe Benefits Tax Assessment Act 1986, effective from 12 June 2019. These rulings collectively provide important tax guidance to affected entities and investors.

Key Provisions

The main operative sections of the gazetted Rulings concern the taxation consequences of certain financial agreements and investments. Specifically, Ruling PR 2019/3 addresses the taxation implications for customers entering into a Prepay Plus Agreement with Landmark Operations Limited from 1 July 2018 to 30 June 2021 (section 1). Ruling PR 2018/2, amended by Addendum PR 2018/2, outlines the tax consequences of investing in Macquarie Equity Lever Instalment Receipts (section 2). Similarly, Ruling PR 2018/3, amended by Addendum PR 2018/3, details the tax implications of investing in equities using the Macquarie Geared Equities Investment plus as outlined in the 2018 Product Brochure (section 3). These Rulings provide clarity on the tax treatment of specified financial arrangements and investments. The Rulings impose specific obligations on the parties involved. For instance, customers entering into a Prepay Plus Agreement with Landmark must adhere to the tax consequences outlined in Ruling PR 2019/3. Investors in Macquarie Equity Lever Instalment Receipts or Macquarie Geared Equities Investment plus must follow the guidelines in Ruling PR 2018/2 and PR 2018/3, respectively, as amended by their respective Addenda. These obligations ensure that the tax implications of the financial agreements and investments are properly understood and adhered to by the relevant parties. The gazetted Rulings also clarify the tax treatment of fringe benefits for expatriate employees. Rulings TD 2012/5 and TD 2013/4, which have been withdrawn, previously provided guidance on the reasonable food component of a living-away-from-home allowance for the purposes of fringe benefits tax. The withdrawal of these Rulings from 12 June 2019 means that taxpayers must now refer to other available guidance or seek clarification from the Commissioner of Taxation. While the Rulings themselves no longer apply, the obligations and requirements they once imposed are now superseded by the current tax framework. There are no specified offences, penalties, or civil/criminal consequences directly stated in the gazetted Rulings. However, failure to comply with the tax obligations outlined in these Rulings could potentially lead to tax assessments, penalties, or interest charges if the tax treatment of the financial agreements or investments is not correctly applied. Taxpayers should ensure they adhere to the guidance provided to avoid any adverse tax consequences.