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29 May 09 Submission on Review of Private Rulings Income Tax Matters

The Taxation Institute has lodged a submission on the Inspector-General of Taxation's Review into the Tax Office's Administration of Private Rulings. The submission responds to matters raised in the Terms of Reference and Consultation Plan for the review.

Key points raised in the submission include:

  • The decision to retain the Register reinforces the Taxation Institute's view that the Register is a relevant and invaluable tool for tax practitioners. Further, the Taxation Institute submits that despite the relationship between the private rulings on the Register and ATOIDs, both are necessary to assist tax practitioners in providing accurate taxation advice.
  • In Taxation Institute members' experience, private rulings are generally not issued within the 28 day period in which the ATO endeavours to provide a response. Further, in members' experience, this is certainly the case where the private ruling concerns complex tax and factual matters. However, obtaining a private ruling for simple matters can also often take more than 28 days. The Taxation Institute submits that private rulings would be more useful if taxpayers could rely on them being provided within 28 days. This would assist taxpayers by providing them with certainty regarding the tax effect of a transaction prior to entering into the transaction.
  • There have been instances reported by members where the ATO has not followed a PBR where another PBR is sought on an identical transaction at a later point in time or where only immaterial facts have changed between two transactions. The Taxation Institute submits that in such circumstances discussed above, the ATO should have to disclose the reasons for the change in their approach or explain why the factual changes affect the tax outcomes of the particular transaction.
  • Regardless of whether there is a pro revenue bias or not in the PBR process, there remains a perception that a pro revenue bias exists. Accordingly, the Taxation Institute considers that it would be appropriate for the ATO to focus on addressing this perception regardless of whether it considers the perception is justified or not.
For a copy of the Taxation Institute's submission go here.

For a copy of the Inspector-General of Taxation's review go here.

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