The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from ato.gov.au/law.
NOTICE OF RULINGS |
Ruling number | Subject | Brief description |
CR 2020/39 | Avita Medical Limited – exchange of shares for Avita Therapeutics, Inc. shares | This Ruling sets out the income tax consequences for Australian-resident Avita Medical Limited shareholders who participated in the exchange which occurred on 29 June 2020. This Ruling applies from 1 July 2019 to 30 June 2021. |
CR 2020/40 | Orora Limited – return of capital and special dividend | This Ruling sets out the tax consequences of Orora Limited’s return of share capital, special dividend paid on 29 June 2020, and consolidation of ordinary shares. This Ruling applies from 1 July 2019 to 30 June 2020. |
NOTICE OF ADDENDUM |
Ruling number | Subject | Brief description |
GSTR 2001/4 | Goods and Services Tax: GST consequences of court orders and out-of-court settlements | This Addendum amends GSTR 2001/4 to update cross-referenced documents and make other minor amendments. This Addendum applies on and from 2 July 2013. |
NOTICE OF ERRATUM |
Ruling Number | Subject | Brief Description |
TR 2005/19 | Income tax: scrip for scrip roll-over arrangements – application of Subdivision 124-M of the Income Tax Assessment Act 1997 – Part IVA of the Income Tax Assessment Act 1936 | This Erratum corrects a legislative cross‑reference in paragraph 48 of TR 2005/19. This Erratum applies both before and after the date of issue. |
Overview
The Commissioner of Taxation, Chris Jordan, has published several rulings and amendments to existing rulings in 2020, all of which are available on the Australian Taxation Office website. The rulings address specific income tax consequences for shareholders in particular companies, such as the exchange of shares for Avita Therapeutics, Inc. shares for Avita Medical Limited shareholders, and the return of share capital and special dividend for Orora Limited shareholders. Additionally, an addendum was published to update cross-referenced documents and make minor amendments to the Goods and Services Tax consequences of court orders and out-of-court settlements. The objective of these rulings and amendments is to provide clarity and guidance to taxpayers on the tax consequences of certain transactions and events, and to ensure compliance with Australian taxation laws. These rulings apply to specific periods and are intended to assist taxpayers in understanding their tax obligations.
Scope and Application
The Commissioner of Taxation has issued various rulings and an addendum to provide clarity on specific tax matters. CR 2020/39 addresses the income tax implications for Australian-resident shareholders of Avita Medical Limited involved in the share exchange with Avita Therapeutics, Inc. on 29 June 2020, and applies from 1 July 2019 to 30 June 2021. Similarly, CR 2020/40 deals with the tax consequences for Orora Limited shareholders related to the return of share capital, special dividend, and share consolidation, effective from 1 July 2019 to 30 June 2020. Additionally, GSTR 2001/4 has been amended by an Addendum to update cross-referenced documents and make minor adjustments, applying from 2 July 2013. An Erratum has also been issued to correct a legislative cross-reference in TR 2005/19, which applies both before and after the date of issue. These rulings and the addendum provide essential guidance to affected taxpayers, clarifying their tax obligations and rights concerning the specified transactions and periods.
Key Provisions
The main provisions of the Gazette notice C2020G00560 involve the release of several tax rulings and an addendum by the Commissioner of Taxation. Ruling CR 2020/39 (paragraph 1) addresses the income tax implications for Australian-resident shareholders of Avita Medical Limited who exchanged their shares for shares in Avita Therapeutics, Inc., which took place on 29 June 2020. This ruling applies from 1 July 2019 to 30 June 2021, offering clarity on the tax treatment of the exchange. Ruling CR 2020/40 (paragraph 2) outlines the tax consequences for shareholders of Orora Limited regarding the return of share capital, a special dividend, and the consolidation of ordinary shares, all occurring on 29 June 2020. This ruling is applicable from 1 July 2019 to 30 June 2020. Additionally, the notice includes an addendum to GSTR 2001/4 (paragraph 3), which updates the cross-referenced documents and makes minor amendments to the GST consequences of court orders and out-of-court settlements. This addendum applies from 2 July 2013. Lastly, the notice contains an erratum to TR 2005/19 (paragraph 4), correcting a legislative cross-reference in paragraph 48 concerning scrip for scrip roll-over arrangements under the Income Tax Assessment Act 1997. This erratum applies both before and after the date of issue.
These rulings and the addendum provide specific guidance on tax treatments and consequences for the specified companies and transactions. They impose obligations on taxpayers, particularly shareholders, to correctly account for the tax implications of the transactions as outlined in these rulings. Failure to adhere to these guidelines could result in incorrect tax assessments, potentially leading to audits or investigations by the Australian Taxation Office (ATO). The rulings are designed to assist taxpayers in complying with their tax obligations by providing clarity on complex tax issues.
In terms of consequences for non-compliance, the specific penalties or civil/criminal consequences are not detailed in the Gazette notice but are governed by the broader tax legislation. Generally, under the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, non-compliance with tax obligations can result in penalties, including fines and interest on unpaid taxes. In more severe cases, it could lead to criminal charges, particularly if the non-compliance is deemed to be deliberate or part of a tax avoidance scheme. The maximum penalties can vary widely depending on the nature and extent of the non-compliance, but they could include substantial fines and, in criminal cases, imprisonment.