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 |
TR 2013/3 | Income tax: research and development tax offsets: feedstock adjustments | The Ruling considers certain aspects of the feedstock adjustment provisions in Subdivision 355‑H of the Income Tax Assessment Act 1997. The Ruling applies to years of income commencing both before and after its date of issue. |
CR 2013/12 | Income tax: capital gains tax: special dividend and capital proceeds from sale of Norton Gold Fields Limited shares pursuant to off market takeover | The Ruling outlines the consequences for the shareholders in Norton Gold Fields Limited. The Ruling applies from 1 July 2012 to 30 June 2013. |
CR 2013/13 | Goods and services tax: GST treatment of developer contributions and other dedications of land made to NSW councils | The Ruling outlines the consequences for all councils that are members of the Local Government Association of New South Wales and the Shires Association of NSW. The Ruling applies from 1 July 2013 to all entities within the specified class who entered into the specified scheme during the term of the Ruling. |
CR 2013/14 | Goods and services tax: goods and services supplied by dentists | The Ruling outlines the consequences for dentists who are members of the Australian Dental Association Inc. The Ruling applies on or after 20 February 2013. |
NOTICE OF ADDENDUM |
Ruling Number | Subject | Brief Description |
TD 2009/21 | Income tax: to obtain a deduction under section 25-90 of the Income Tax Assessment Act 1997 for a cost in relation to a debt interest does the taxpayer have to actually derive a dividend to which section 23AJ of the Income Tax Assessment Act 1936 applies in the same income year as that in which the cost is incurred? | The Addendum amends TD 2009/21 footnote 3 to reflect the Full Federal Court decision in Commissioner of Taxation v. Noza Holdings Pty Ltd [2012] FCAFC 43. The Addendum amends TD 2009/21 to state the Commissioner’s view of the law both before and after its date of issue. |
Overview
The Commissioner of Taxation, Chris Jordan, has published a series of rulings and an addendum under the Income Tax Assessment Act 1997. The primary aim of these rulings is to clarify specific tax issues and provide guidance to taxpayers on matters such as research and development tax offsets, capital gains tax implications, GST treatment of certain land contributions, and the tax consequences for dentists providing goods and services. These rulings address various scenarios, including feedstock adjustments, special dividends from Norton Gold Fields Limited shares, GST implications for NSW councils, and the tax treatment of dental services. The rulings and addendum are designed to apply to specific periods and entities, ensuring taxpayers can understand their obligations and entitlements within the specified timeframes. The objective is to enhance transparency and compliance by providing clear interpretations of the relevant tax laws.
Scope and Application
The Rulings and Addendum issued by the Commissioner of Taxation apply to specific categories of taxpayers and entities engaged in particular transactions or industries. For instance, TR 2013/3 relates to taxpayers eligible for research and development tax offsets under Subdivision 355-H of the Income Tax Assessment Act 1997, affecting those involved in research and development activities. CR 2013/12 and CR 2013/13 pertain to shareholders in Norton Gold Fields Limited and councils within the Local Government Association of New South Wales and the Shires Association of NSW respectively, impacting those who hold shares in the company or engage in land dedications to NSW councils. CR 2013/14 applies to dentists who are members of the Australian Dental Association Inc., affecting those providing dental services. The Addendum to TD 2009/21 amends the interpretation of the law concerning deductions for debt interest costs in relation to dividends, impacting taxpayers who incur such costs and derive dividends. These Rulings and the Addendum have jurisdictional reach within Australia and are applicable from specified dates as outlined in the notices.
Key Provisions
The Commissioner of Taxation has issued a series of rulings that provide guidance on various aspects of Australian tax law, each addressing specific provisions of the Income Tax Assessment Act 1997 and the Goods and Services Tax (GST) framework. Ruling TR 2013/3 (paragraphs 1-6) focuses on research and development tax offsets, particularly the feedstock adjustment provisions under Subdivision 355-H of the Act. This ruling provides clarity on the eligibility and calculation of these offsets, applicable to income years both before and after its issuance. Ruling CR 2013/12 (paragraphs 1-6) deals with the capital gains tax implications for shareholders in Norton Gold Fields Limited, stemming from a special dividend and capital proceeds from an off-market takeover, effective from 1 July 2012 to 30 June 2013. Ruling CR 2013/13 (paragraphs 1-6) concerns the GST treatment of developer contributions and other land dedications made to NSW councils, relevant from 1 July 2013 for entities within the specified class. Lastly, Ruling CR 2013/14 (paragraphs 1-6) outlines the GST consequences for goods and services supplied by dentists, effective on or after 20 February 2013.
These rulings impose certain obligations and requirements on the entities they govern. Taxpayers, councils, and dentists must ensure their practices align with the specific provisions outlined in these rulings to avoid any misapplication of tax laws. For instance, taxpayers claiming research and development tax offsets must correctly calculate and report their feedstock adjustments in accordance with the guidance provided in Ruling TR 2013/3. Similarly, councils making developer contributions and other land dedications must understand the GST implications as detailed in Ruling CR 2013/13. Dentists must also be aware of the GST treatment of their services as per Ruling CR 2013/14.
In terms of penalties and consequences for non-compliance, the rulings themselves do not explicitly state penalties but generally, failure to adhere to the provisions can result in the disallowance of deductions, reassessment of tax liabilities, and potential penalties for late or incorrect reporting. Under the Income Tax Assessment Act 1997, penalties for incorrect claims or omissions can include fines and interest on unpaid taxes. Additionally, the Commissioner may take further action against persistent non-compliance, including audits and legal proceedings, which can lead to more severe financial penalties. The specific penalties would depend on the nature and extent of the non-compliance as determined by the ATO.
Furthermore, Ruling TD 2009/21, as amended by the Addendum, clarifies the conditions under which a taxpayer can claim a deduction for costs related to debt interest, addressing a question of legal interpretation in light of the Full Federal Court decision in Commissioner of Taxation v. Noza Holdings Pty Ltd [2012] FCAFC 43. The Addendum modifies footnote 3 of the original ruling to reflect the court's decision, ensuring taxpayers understand the Commissioner's view on the law both before and after the amendment. This ruling ensures taxpayers can correctly claim deductions for debt interest-related costs, thereby avoiding potential audits or reassessments that could lead to penalties for non-compliance.