Taxation Laws Amendment (Self Assessment) Act 1992 (101 of 1992)

PART 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

22   After section 170B

After section 170B of the Principal Act the following sections are inserted:

Effect of public ruling on tax other than withholding tax

"170BA.(1) In this section:

'final tax', in relation to a person, means ruling affected tax payable in relation to the person after allowing:

(a) a credit within the meaning of Division 19 of Part III; or

(b) an offset within the meaning of Division 1 of Part IIIAA;

'ruling affected tax' means:

(a) income tax; or

(b) franking deficit tax within the meaning of Part IIIAA; or

(c) Medicare levy;

but does not include withholding tax;

'withholding tax' includes mining withholding tax.

"(2) Expressions used in this section have the same meanings as in Part IVAAA of the Taxation Administration Act 1953.

"(3) Subject to section 170BC, if:

(a) there is a public ruling on the way in which an income tax law applies to a person in relation to an arrangement ('ruled way'); and

(b) that law applies to a person in relation to that arrangement in a different way; and

(c) the amount of final tax under an assessment in relation to that person would (apart from this section and section 170BC) exceed what it would have been if that law applied in the ruled way;

the assessment and amount of final tax must be what they would be if that law applied in the ruled way.

Effect of private rulings on tax other than withholding tax

"170BB.(1) In this section:

'final tax' has the same meaning as in section 170BA.

"(2) Expressions used in this section have the same meanings as in Part IVAA of the Taxation Administration Act 1953.

"(3) Subject to sections 170BC, 170BG and 170BH, if:

(a) there is a private ruling on the way in which an income tax law applies to a person in respect of a year of income in relation to an arrangement ('ruled way'); and

(b) that law applies to that person in respect of that year in relation to that arrangement in a different way; and

(c) the amount of final tax under an assessment in relation to that person would (apart from this section and section 170BC) exceed what it would have been if that law applied in the ruled way;

the assessment and amount of final tax must be what they would be if that law applied in the ruled way.

"(4) Subsection (3) applies to an assessment whether or not in respect of the year of income in paragraphs (3)(a) and (b).

Assessment of tax other than withholding tax where conflicting rulings

"170BC.(1) In this section:

'ruling' means:

(a) a public ruling; or

(b) a private ruling.

"(2) Expressions used in this section have the same meanings as in section 170BA or 170BB.

"(3) If:

(a) there are rulings of different ways in which the same income tax law applies to the same person in relation to the same arrangement; and

(b) apart from this section, because of there being those different ways, there are conflicting requirements under section 170BA or 170BB, or both, of what the assessment and amount of final tax in relation to that person are to be;

the assessment and amount of final tax must be what they would be if that law so applied in whichever of those ways would result in the lowest amount of final tax.

Effect of public ruling on withholding tax

"170BD.(1) Expressions used in this section have the same meanings as in section 170BA.

"(2) If:

(a) there is a public ruling on the way in which an income tax law applies to a person in relation to an arrangement; and

(b) an amount of withholding tax is payable that exceeds what would have been payable if that law applied in that way; then:

(c) the Commissioner may not sue for the recovery of the amount of the excess; and

(d) the Commissioner must not serve on a person a notice that the excess is payable by the person; and

(e) the excess is remitted.

Effect of private ruling on withholding tax

"170BE.(1) In this section:

'objection decision' and 'taxation objection' have the same meanings as in Part IVC of the Taxation Administration Act 1953.

"(2) Expressions used in this section have the same meanings as in section 170BA or 170BC.

"(3) Subject to sections 170BF, 170BG and 170BH, if:

(a) there is a private ruling on the way in which an income tax law applies to a person in respect of a year of income in relation to an arrangement; and

(b) an amount of withholding tax is payable that exceeds what would have been payable if that law applied in the way ruled; then:

(c) the Commissioner may not sue for the recovery of the amount of the excess; and

(d) the Commissioner must not serve on a person a notice that the excess is payable by the person; and

(e) if no taxation objection against the ruling has been lodged - the excess is remitted; and

(f) if:

(i) there was a taxation objection against the ruling; and

(ii) an objection decision about the taxation objection has been made; and

(iii) the period in which the objection decision may be appealed against or an application for the review of the objection decision may be made has ended; and

(iv) there has been neither such an appeal nor application or such an appeal or application has been withdrawn; the excess is remitted.

Withholding tax where conflicting rulings

"170BF.(1) In this section:

'ruling' means:

(a) a public ruling; or

(b) a private ruling.

"(2) Expressions used in this section have the same meanings as in section 170BD or 170BE.

"(3) If:

(a) there are rulings of different ways in which the same income tax law applies to the same person in respect of the same year of income in relation to the same arrangement; and

(b) apart from this section, because of there being those different ways, there are 2 or more different excesses for the purposes of section 170BD or 170BE, or both;

the excess is the highest of those excesses.

Final Tribunal decision about private ruling conclusive

"170BG.(1) In this section:

'arrangement', 'income tax law' and 'private ruling' have the same meanings as in Part IVAA of the Taxation Administration Act 1953;

'objection decision' and 'taxation objection' have the same meanings as in Part IVC of the Taxation Administration Act 1953.

"(2) If:

(a) on the review of an objection decision about a taxation objection against a private ruling, the Tribunal decides that an income tax law would apply to a person in a particular way in respect of a year of income in relation to an arrangement; and

(b) that decision becomes final;

then, for the purposes of this Act, that law applies to that person in that way in respect of that year in relation to that arrangement.

"(3) Subsection (2) applies in spite of any order or decision of a court, or any other decision of the Tribunal, about any application of that law.

"(4) For the purposes of subsection (2), if there is no appeal against the Tribunal's decision when the period for lodging an appeal ends, the decision becomes final at the end of the period.

Final court order about private ruling conclusive

"170BH.(1) In this section:

'arrangement', 'income tax law' and 'private ruling' have the same meanings as in Part IVAA of the Taxation Administration Act 1953;

'objection decision' and 'taxation objection' have the same meanings as in Part IVC of the Taxation Administration Act 1953.

"(2) If:

(a) on an appeal against:

(i) an objection decision about a taxation objection against a private ruling; or

(ii) a decision of the Tribunal on the review of such an objection decision;

a court orders that an income tax law would apply to a person in a particular way in respect of a year of income in relation to an arrangement; and

(b) that order becomes final;

then, for the purposes of this Act, that law applies to that person in that way in respect of that year in relation to that arrangement.

"(3) Subsection (2) applies despite any other order or decision of a court about any application of that law.

"(4) For the purposes of subsection (2):

(a) if the order is made by the Federal Court constituted by a single judge and there is no appeal against the order when the period for lodging an appeal ends - the order becomes final at the end of the period; and

(b) if the order is made by the Full Court of the Federal Court and there is no application for special leave to appeal to the High Court against the order when the period of 30 days after the order is made ends - the order becomes final at the end of the period.

Final court order about Commissioner discretion

"170BI.(1) Expressions used in this section have the same meanings as in section 170BH.

"(2) For the purposes of this section, the Commissioner exercises a discretion if the Commissioner acts as described in section 14ZAD of the Taxation Administration Act 1953.

"(3) If:

(a) a private ruling rules that a discretion of the Commissioner under the income tax law which the ruling is about would be exercised in a particular way; and

(b) on an appeal against:

(i) an objection decision about a taxation objection against that ruling; or

(ii) a decision of the Tribunal on the review of such an objection decision;

a court orders that it would be in accordance with law for the Commissioner to exercise that discretion in that way in relation to the law, person, year and arrangement that the ruling is about ('rule matters'); and

(c) that order becomes final;

then, for the purposes of this Act, if the Commissioner exercises that discretion in that way in relation to the rule matters, the discretion is exercised in accordance with law.

"(4) For the purposes of subsection (3), an order becomes final if it would become final for the purposes of subsection 170BH(2).

"(5) Subsection (3) applies despite any other order or decision of a court about the exercise of a discretion.".