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 2016/1 | Income tax: loans from Public and Private Ancillary Funds to AUSiMED Limited | The Ruling sets out the Commissioners position for Private or Public Ancillary Funds, endorsed as a Deductible Gift Recipient under section 30‑120 of the Income Tax Assessment Act 1997, that enter into a Loan Agreement with AUSiMED Limited. The Ruling applies from 1 July 2015 to 30 June 2020. |
CR 2016/2 | Income tax: Hyne & Son Pty Ltd – exchange of shares for stapled securities in Mayflower Enterprises Pty Ltd | The Ruling sets out the Commissioners position for ordinary shareholders of Hyne & Son Pty Ltd who enter into the scheme described within the Ruling. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2016/3 | Income tax: Eildon Capital Limited – off‑market share buy‑back | The Ruling sets out the Commissioners position for ordinary shareholders of Eildon Capital Limited (formerly known as CVC Private Equity Limited) who enter into the scheme described within the Ruling. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2016/4 | Income tax: CMI Limited – return of share capital | The Ruling sets out the Commissioners position for holders of ordinary shares in CMI Limited who enter into the scheme described within the Ruling. The Ruling applies from 1 July 2015 to 30 June 2016. |
PR 2016/1 | Income tax: TFS Indian Sandalwood Project 2016 Retail Investment Offer | The Ruling sets out the Commissioners position for Growers who enter into the scheme described within the Ruling. The Ruling applies prospectively from 13 January 2016. |
LCG 2015/2 | Section 177DA of the Income Tax Assessment Act 1936: schemes that limit a taxable presence in Australia | The Guideline describes how the Commissioner will apply the law as amended by Schedule 2 to the Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 to entities that rely on this Guideline in good faith. The Ruling applies on and from 11 December 2015. |
LCG 2015/3 | Subdivision 815-E of the Income Tax Assessment Act 1997: Country-by-Country reporting | This Guideline describes how the Commissioner will apply the law as amended by Schedule 4 to the Tax Laws Amendment (Combating Multinational Tax Avoidance) Act 2015 to entities that rely on this Guideline in good faith. The Ruling applies on and from 11 December 2015. |
NOTICE OF ADDENDUM |
Ruling Number | Subject | Brief Description |
PR 2015/2 | Income tax: tax consequences for a borrower being charged a discounted home loan interest rate calculated under Loan Reducer | The Addendum amends Product Ruling PR 2015/2 to reflect an amendment made to the Loan Reducer system. The Addendum applies on and from 25 March 2015. |
NOTICE OF ERRATUM |
Ruling Number | Subject | Brief Description |
TR 2011/6 | Income tax: business related capital expenditure – section 40‑880 of the Income Tax Assessment Act 1997 core issues | The Erratum corrects a typographical error within paragraph 119 of TR 2011/6. The Erratum applies on and from 30 November 2011. |
Overview
The Commissioner of Taxation, Chris Jordan, issued various rulings and guidelines in 2016 under the authority of the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. These rulings and guidelines address specific tax issues for certain transactions, schemes, and projects. For instance, Rulings CR 2016/1 to CR 2016/4 and PR 2016/1 outline the Commissioner’s position on various corporate schemes involving loans, share exchanges, buy-backs, and returns of share capital. Additionally, Guidelines LCG 2015/2 and LCG 2015/3 were introduced to provide clarity on the application of new anti-avoidance measures targeting multinational tax avoidance. The Commissioner also issued an addendum to correct an error in a previous ruling and an erratum to address a typographical issue in an earlier taxation ruling. These measures were intended to ensure that taxpayers are aware of the tax implications of their actions and to maintain the integrity of the tax system by addressing tax avoidance strategies.
Scope and Application
These rulings, issued by the Commissioner of Taxation, cover various aspects of income tax for specific transactions and entities, providing clarity and guidance on the tax treatment of certain financial arrangements and corporate restructurings. Rulings CR 2016/1 to CR 2016/4 pertain to loans from ancillary funds to AUSiMED Limited, the exchange of shares for stapled securities in Mayflower Enterprises Pty Ltd, an off-market share buy-back by Eildon Capital Limited, and the return of share capital in CMI Limited, respectively. Each ruling applies within specified time frames, from 1 July 2015 to 30 June 2020 for CR 2016/1, and from 1 July 2015 to 30 June 2016 for CR 2016/2 to CR 2016/4. PR 2016/1 addresses the tax consequences for growers participating in the TFS Indian Sandalwood Project 2016 Retail Investment Offer, applying prospectively from 13 January 2016. LCG 2015/2 and LCG 2015/3 provide guidelines for entities that rely in good faith on schemes limiting taxable presence in Australia and for Country-by-Country reporting, respectively, both applying from 11 December 2015. Additionally, PR 2015/2, amended by an addendum, addresses the tax implications of discounted home loan interest rates calculated under Loan Reducer, applying from 25 March 2015. TR 2011/6, corrected by an erratum, clarifies business-related capital expenditure under section 40-880 of the Income Tax Assessment Act 1997, with the correction applying from 30 November 2011.
Key Provisions
The Commissioner of Taxation has issued several rulings and guidelines that provide clarity on specific tax situations. For instance, Ruling CR 2016/1 (paragraph 1) addresses the tax implications for loans from Public and Private Ancillary Funds to AUSiMED Limited, endorsed as Deductible Gift Recipients under section 30-120 of the Income Tax Assessment Act 1997. This Ruling is applicable from 1 July 2015 to 30 June 2020. Similarly, Ruling CR 2016/2 (paragraph 2) concerns the exchange of shares for stapled securities in Mayflower Enterprises Pty Ltd by ordinary shareholders of Hyne & Son Pty Ltd, effective from 1 July 2015 to 30 June 2016. Ruling CR 2016/3 (paragraph 3) and Ruling CR 2016/4 (paragraph 4) cover the tax implications for shareholders of Eildon Capital Limited and CMI Limited respectively, who participate in specific share buy-back and capital return schemes. These rulings also apply from 1 July 2015 to 30 June 2016.
The obligations imposed by these rulings require entities and individuals to adhere to the tax positions outlined by the Commissioner. For example, entities involved in the transactions described in Rulings CR 2016/1 to CR 2016/4 must ensure their activities comply with the specified tax treatments to avoid any potential tax liabilities or penalties. Additionally, Ruling PR 2016/1 (paragraph 5) pertains to the TFS Indian Sandalwood Project 2016 Retail Investment Offer, providing clarity on the tax consequences for Growers entering into the scheme, effective from 13 January 2016.
The Commissioner's rulings and guidelines also outline the potential consequences for non-compliance. Breach of the provisions set out in these rulings could result in various penalties and legal consequences. For example, failure to comply with the tax treatments specified in Rulings CR 2016/1 to CR 2016/4 could lead to additional tax liabilities, interest, and penalties. The specific penalties for non-compliance are not detailed within the provided text but typically include fines and other financial penalties as prescribed by the relevant tax legislation. The Commissioner’s rulings aim to ensure that all parties are aware of their obligations and the potential consequences of non-compliance.