Notice of Rulings, Notice of Withdrawal

Overview

The Commissioner of Taxation has issued a ruling under the Taxation Administration Act 1953 to clarify the Commissioner’s position on specific tax matters. This Act was enacted to provide a framework for the administration of taxation laws in Australia, addressing gaps in previous legislation to ensure compliance and effective tax collection. The ruling in question, CR 2018/14, pertains to the scrip for scrip scheme of arrangement for CFC Global Pty Ltd, applying from 1 July 2017 to 30 June 2018 and continuing to apply to all relevant entities who engaged in the specified scheme during this period. The objective of these rulings is to provide certainty to taxpayers and ensure consistent application of the tax law.

Scope and Application

The Commissioner of Taxation has issued two rulings under the Income Tax Assessment Act 1936, providing guidance on specific tax arrangements. Ruling CR 2018/14 concerns the scrip for scrip scheme of arrangement for CFC Global Pty Ltd, and outlines the Commissioner's position on this arrangement. This Ruling applies from 1 July 2017 to 30 June 2018 and continues to apply to entities within the specified class who entered into the scheme during the term of the Ruling. Ruling CR 2018/15 addresses the 2015, 2016 and 2017 Long Term Incentive Plans for Downer EDI Limited and any Associated Body Corporate. It applies to the 2015 Plan from 1 July 2014 to 30 June 2018, the 2016 Plan from 1 July 2015 to 30 June 2019, and the 2017 Plan from 1 July 2016 to 30 June 2020. The Ruling continues to apply to entities within the specified class who entered into the specified scheme during the term of the Ruling. It is important to note that Ruling CR 2014/16 regarding the Downer EDI Limited Long Term Incentive Plan was withdrawn with effect from 4 April 2018. These rulings provide clarity and certainty to taxpayers regarding the application of the income tax law in relation to the specified arrangements, and are applicable to the relevant entities and time periods as outlined.

Key Provisions

The Commissioner of Taxation has issued two rulings and withdrawn one, each providing guidance on specific tax matters. CR 2018/14 (paragraph 2) explains the Commissioner's position on the scrip for scrip scheme of arrangement for CFC Global Pty Ltd. This ruling applies from 1 July 2017 to 30 June 2018, and continues to apply to any entities within the specified class that entered into the scheme during this period. CR 2018/15 (paragraph 3) details the Commissioner's stance on the 2015, 2016, and 2017 Long Term Incentive Plans for directors and employees of Downer EDI Limited or any associated body corporate. This ruling applies from different dates for each plan: 1 July 2014 to 30 June 2018 for the 2015 plan, 1 July 2015 to 30 June 2019 for the 2016 plan, and 1 July 2016 to 30 June 2020 for the 2017 plan, with ongoing application to entities that entered into these plans during the specified terms. These rulings impose obligations on the entities and individuals governed by them. For CR 2018/14, entities involved in the scrip for scrip scheme with CFC Global Pty Ltd must adhere to the tax treatment outlined in the ruling. For CR 2018/15, directors and employees of Downer EDI Limited or any associated body corporate participating in the specified long-term incentive plans must follow the tax implications set forth in the ruling. Both rulings require that any entity or individual who entered into the specified arrangements during the terms of the rulings must continue to comply with the ruling's provisions even after the initial application period. Breach of the obligations set out in these rulings may result in various civil and criminal consequences. While the specific penalties are not detailed in the text, typically, failure to comply with a Commissioner's ruling can lead to penalties under the income tax legislation, which may include fines and interest on unpaid tax. In more severe cases, breaches may also lead to criminal charges, which could result in substantial fines and imprisonment, depending on the severity and intent behind the non-compliance.