Notice of Rulings, Notice of Withdrawals

Administered by Department of the Treasury

Legislation au C2017G01130 In force Gazette

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COMMISSIONER OF TAXATION

The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from http://ato.gov.au/law.

NOTICE OF RULINGS
Ruling Number	Subject	Brief Description
TD 2017/21	Income tax: where an Australian corporate tax entity is a partner in a partnership, can the partnership 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997?	The Determination sets out the Commissioner’s position on whether an Australian corporate tax entity can have an indirect participation interest in the foreign company through the partnership for the purpose of satisfying the participation test in section 768-15. The Determination applies from 17 October 2014.
TD 2017/22	Income tax: where an Australian corporate tax entity is a beneficiary of a trust, can the trust be taken to 'hold' a direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936) in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997?	The Determination sets out the Commissioner’s position on whether an Australian corporate tax entity can have an indirect participation interest in the foreign company through the trust for the purpose of satisfying the participation test in section 768‑15. The Determination applies from 17 October 2014.

NOTICE OF WITHDRAWALS
Ruling Number	Subject	Brief Description
GSTD 2017/D1	Goods and services tax: what is excluded from being second hand goods by paragraph (b) of the definition of that term in Division 195 of the A New Tax System (Goods and Services Tax) Act 1999?	The draft Determination is being withdrawn as the Treasury Laws Amendment (GST Integrity) Act 2017 has repealed paragraphs (a) and (b) of the definition of second‑hand goods, and introduced a new definition that applies to acquisitions of goods containing valuable metal that occur on or after 1 April 2017. The Determination is withdrawn with effect from today.
IT 2450	Income tax: recognition of income from long term construction contracts	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.
TD 92/131	Income tax: property development: are tender costs to be included in the 'estimated profits basis' calculation under Taxation Ruling IT 2450 and spread over the life of a long-term construction contract, or are they deductible under subsection 51(1) of the Income Tax Assessment Act 1936 in the year in which they are incurred?	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.
TD 92/186	Income tax: property development: can a construction contract which runs for less than twelve months be regarded as a long-term construction contract for the purposes of Taxation Ruling IT 2450?	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.
TD 94/39	Income tax: property development: can costs incurred and income derived under the terms of a long-term construction contract be returned on a completed contract basis?	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.
TD 94/65	Income tax: property development: is a 'management reserve' taken into account in calculating notional taxable income under the estimated profits basis of returning income from a long term construction contract?	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.
TD 94/87	Income tax: property development: where the estimated profits method of recognising income from long-term construction contracts (Taxation Ruling IT 2450) is adopted, how is an estimated 'ultimate loss' arising under a contract to be recognised?	The Determination is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts. The Determination is withdrawn with effect from today.

Overview

The Commissioner of Taxation, Chris Jordan, has issued a series of Taxation Determinations and Withdrawals under the Income Tax Assessment Act 1936 and the A New Tax System (Goods and Services Tax) Act 1999. These rulings and withdrawals were enacted by the Australian Government to clarify and streamline tax obligations and interpretations, particularly for corporate entities and trusts with foreign investments, and to address complexities in the tax treatment of long-term construction contracts. These legislative notices aim to provide certainty and guidance to taxpayers, ensuring compliance with the relevant tax laws. The rulings address specific issues such as the indirect participation interests of Australian corporate entities in foreign companies through partnerships or trusts and the recognition of income from long-term construction contracts. The withdrawals of certain determinations reflect updates and consolidations in tax rulings to improve clarity and efficiency in tax administration.

Scope and Application

The Commissioner of Taxation has issued two rulings concerning the tax obligations of Australian corporate entities that have an indirect participation interest in foreign companies. These rulings are part of the broader framework set under the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. Specifically, Ruling TD 2017/21 addresses whether an Australian corporate tax entity can hold a direct control interest in a foreign company through a partnership, while Ruling TD 2017/22 examines if a similar arrangement is possible through a trust. Both rulings apply from 17 October 2014, providing clarity on the participation test in section 768-15 for the purposes of Subdivision 768-A. These rulings are crucial for entities engaging in cross-border transactions and partnerships, ensuring compliance with Australian tax laws.

Key Provisions

The Commissioner of Taxation has issued two new Determinations, TD 2017/21 and TD 2017/22, clarifying the tax treatment of indirect interests in foreign companies held by Australian corporate tax entities through partnerships or trusts. These Determinations address whether an Australian corporate tax entity can hold an indirect participation interest in a foreign company for the purpose of Subdivision 768-A of the Income Tax Assessment Act 1997 (TD 2017/21 for partnerships and TD 2017/22 for trusts). These Determinations are effective from 17 October 2014. The Determinations impose obligations on Australian corporate tax entities that indirectly hold interests in foreign companies through partnerships or trusts. They must ensure that their indirect interests comply with the participation test in section 768-15 of the Income Tax Assessment Act 1997, which is a condition for the application of Subdivision 768-A. This means that entities must properly account for and disclose their indirect interests in accordance with the rules set out in the Determinations. Failure to comply with the requirements of these Determinations could result in the Australian corporate tax entity being liable to additional taxes, interest, and penalties under Subdivision 768-A. The specific consequences would depend on the nature and extent of the non-compliance, but could include the disallowance of deductions, the imposition of a notional dividend tax, or the application of other anti-avoidance measures. The maximum penalties for non-compliance with the Income Tax Assessment Act 1997 include fines of up to $22,200 per offence for individuals and $111,000 per offence for entities, as well as potential criminal charges for serious or repeated breaches. Additionally, several Determinations and Draft Determinations have been withdrawn, including GSTD 2017/D1 on the definition of second-hand goods, IT 2450 on income recognition from long-term construction contracts, and various TD Determinations related to the tax treatment of long-term construction contracts. These withdrawals reflect changes in legislation or the consolidation of tax treatment guidelines into new rulings. The withdrawn Determinations are no longer applicable from the dates specified, and taxpayers should refer to the new or updated rulings for the relevant tax treatment.

Area of Law: Taxation Law
Instrument: Gazette Notice
Concepts: Definitions & Interpretation; Reporting & Disclosure Obligations; Compliance Obligations

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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