Tax Laws Amendment (Tax Incentives for Innovation) Act 2016 (54 of 2016)
Schedule 2 Venture capital investment
Part 7 Rulings that activities are not ineligible activities
Taxation Administration Act 1953
61 At the end of Part 5-5 in Schedule 1
Add:
Division 362 - Rulings by Innovation Australia that activities are not ineligible activities
Guide to Division 362
362-1 What this Division is about
Innovation Australia may make public rulings and private rulings expressing its view on whether activities are not ineligible activities for the purposes of applying capital gains tax provisions to venture capital investments.
Note: An entity's involvement in ineligible activities can affect whether an investment is an eligible venture capital investment for the purpose of accessing a capital gains tax exemption under Subdivision 118-F of the Income Tax Assessment Act 1997.
Table of sections
Public rulings by Innovation Australia
362-5 Innovation Australia may make public rulings on a specified class of activities
362-10 Application of public rulings
362-15 When a public ruling ceases to apply
362-20 Withdrawing public rulings
Private rulings by Innovation Australia
362-25 Innovation Australia may make private rulings on a specified activity
362-30 Applying for a private ruling
362-35 Innovation Australia must give notice of its decision
362-40 Private rulings must contain certain details
362-45 Application of private rulings
362-50 Delays in making private rulings
362-55 When a private ruling ceases to apply
362-60 Withdrawing private rulings
General provisions
362-65 When rulings are binding on the Commissioner and Innovation Australia
362-70 Application of common rules under Subdivision 357-B
362-75 Application of Divisions 358 and 359
Public rulings by Innovation Australia
362-5 Innovation Australia may make public rulings on a specified class of activities
(1) *Innovation Australia may make a ruling that Innovation Australia considers that activities included in a specified class of activities:
(a) are not ineligible activities for the purposes of subsections 118-425(13) and 118-427(14) of the Income Tax Assessment Act 1997; or
(b) in specified circumstances, are not such ineligible activities;
if Innovation Australia is satisfied that the activities included in that class are not such ineligible activities, or are not in those circumstances such ineligible activities, as the case requires.
(2) Such a ruling is a public ruling if it:
(a) is published; and
(b) states that it is a public ruling.
(3) *Innovation Australia must publish notice of the making of a *public ruling in the Gazette.
Note: The validity of a ruling is not affected merely because a provision of this Part relating to the form of the ruling or the procedure for making it has not been complied with: see section 357-90.
362-10 Application of public rulings
A *public ruling under this Division applies from the time it is published or from such earlier or later time as is specified in the ruling.
362-15 When a public ruling ceases to apply
(1) A *public ruling under this Division may specify the time at which it ceases to apply.
(2) If a *public ruling under this Division does not do this, it applies until it is withdrawn.
362-20 Withdrawing public rulings
(1) *Innovation Australia must withdraw a *public ruling made under this Division, by publishing notice of the withdrawal, if:
(a) it is no longer satisfied of the matter about which it was required to be satisfied under subsection 362-5(1); or
(b) the ruling is inconsistent with a decision of a court.
(2) The withdrawal takes effect from the time specified in the notice. That time must not be before the time the notice is published.
(3) *Innovation Australia must publish notice of the withdrawal of the ruling in the Gazette.
Private rulings by Innovation Australia
362-25 Innovation Australia may make private rulings on a specified activity
(1) *Innovation Australia may, on application, make a ruling that Innovation Australia considers that a specified activity:
(a) is not an ineligible activity for the purposes of subsections 118-425(13) and 118-427(14) of the Income Tax Assessment Act 1997; or
(b) in specified circumstances, is not such an ineligible activity;
if Innovation Australia is satisfied that the activity is not such an ineligible activity, or is not in those circumstances such an ineligible activity, as the case requires.
(2) Such a ruling is a private ruling .
Note: Decisions making such a ruling, and decisions refusing to make such a ruling, are reviewable under Part 5 of the Venture Capital Act 2002.
(3) In considering whether to make a *private ruling under this Division, *Innovation Australia must apply any principles made under subsection (4).
(4) *Innovation Australia may, by legislative instrument, make principles about making *private rulings under this Division.
(5) A failure to comply with subsection (3) does not affect the validity of the ruling.
362-30 Applying for a private ruling
A *general partner of a *limited partnership registered as a *VCLP, an *ESVCLP or an *AFOF may, in the *form approved by *Innovation Australia, apply to Innovation Australia for a *private ruling under this Division.
362-35 Innovation Australia must give notice of its decision
(1) If *Innovation Australia makes a *private ruling under this Division, Innovation Australia must notify the *general partner, and the Commissioner, as soon as practicable after the ruling is made.
(2) If *Innovation Australia refuses to make a *private ruling under this Division, Innovation Australia must:
(a) notify the *general partner as soon as practicable after the refusal; and
(b) provide reasons for the refusal.
362-40 Private rulings must contain certain details
(1) A *private ruling under this Division must state that it is a private ruling.
(2) A *private ruling under this Division must identify the entity to whom it applies and specify the activity to which it relates.
Note: Innovation Australia must tell the applicant which assumptions Innovation Australia made in making the ruling: see section 357-110.
362-45 Application of private rulings
A *private ruling under this Division applies from the time it is published or from such earlier or later time as is specified in the ruling.
362-50 Delays in making private rulings
(1) The applicant for a *private ruling under this Division may give *Innovation Australia a written notice requiring Innovation Australia to make the ruling if, at the end of 60 days after the application was made, Innovation Australia has neither:
(a) made the ruling; nor
(b) told the applicant that Innovation Australia has refused to make the ruling.
(2) The 60 day period mentioned in subsection (1) is extended in a circumstance applicable under the table by the extension period applicable to that circumstance. If 2 or more circumstances are applicable, ignore any overlap between the periods of extension.
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Extending the 60 day period |
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|---|---|---|
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Item |
If * Innovation Australia, during the 60 day period: |
The 60 day period is extended by the number of days in this period: |
|
1 |
requests further information under section 357-105 (as that section applies because of section 362-70) |
the period starting on the day the information was requested and ending on the day it is received by *Innovation Australia |
|
2 |
tells the applicant about assumptions *Innovation Australia proposes to make under section 357-110 (as that section applies because of section 362-70) |
the period starting on the day *Innovation Australia tells the applicant and ending on the day on which Innovation Australia receives the applicant's response about the assumptions |
|
3 |
tells the applicant about information provided by a third party that *Innovation Australia proposes to take into account under section 357-120 (as that section applies because of section 362-70) |
the period starting on the day *Innovation Australia tells the applicant and ending on the day on which Innovation Australia receives the applicant's response about the information |
(3) If *Innovation Australia:
(a) does not make the ruling within 30 days of the notice under subsection (1) being given; and
(b) has not otherwise declined to make the ruling by the end of that period;
Innovation Australia is taken to have refused to make the ruling at the end of that period.
Note: Decisions refusing to make such a ruling are reviewable under Part 5 of the Venture Capital Act 2002.
362-55 When a private ruling ceases to apply
(1) A *private ruling under this Division may specify the time at which it ceases to apply.
(2) If a *private ruling under this Division does not do this, it applies until it is withdrawn.
362-60 Withdrawing private rulings
(1) *Innovation Australia must withdraw a *private ruling made under this Division if:
(a) it is no longer satisfied of the matter about which it was required to be satisfied under subsection 362-25(1); or
(b) the ruling is inconsistent with a decision of a court.
(2) *Innovation Australia must give notice of the withdrawal to a *general partner of the *limited partnership to which the ruling related.
General provisions
362-65 When rulings are binding on the Commissioner and Innovation Australia
(1) A ruling under this Division binds the Commissioner and *Innovation Australia in relation to an entity (whether or not the entity is aware of the ruling) if:
(a) the ruling applies to the entity; and
(b) the entity relies on the ruling by acting (or omitting to act) in accordance with the ruling.
(2) If the ruling is withdrawn under this Division, it continues to bind the Commissioner and *Innovation Australia in relation to the entity until the end of the income year following the income year in which it is withdrawn, but only to the extent that the ruling affected investments made before the withdrawal took effect.
362-70 Application of common rules under Subdivision 357-B
Despite section 357-50:
(a) section 357-60 does not apply in relation to a ruling under this Division; and
(b) sections 357-70, 357-85 and 357-95 apply, in relation to a ruling under this Division, to *Innovation Australia in the same way they apply to the Commissioner; and
(c) section 357-100 applies:
(i) in relation to a ruling under this Division as if a document referred to in paragraph 357-100(b) were required to be signed by a member of Innovation Australia, and not by a person referred to in that paragraph; and
(ii) in relation to a *private ruling under this Division in the same way it applies to a *public ruling; and
(d) sections 357-105 to 357-125 apply in relation to a ruling under this Division as if references in those sections to the Commissioner were references to Innovation Australia.
362-75 Application of Divisions 358 and 359
(1) Division 358 does not apply in relation to a *public ruling under this Division, or in relation to the making of such a ruling.
(2) Division 359 does not apply in relation to a *private ruling under this Division, or in relation to the making of such a ruling.