Practice Statement Law Administration

PS LA 2003/3

Precedential ATO view

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FOI status: may be released

This Law Administration Practice Statement explains the precedential ATO view system.

1. What is a precedential ATO view?

A precedential ATO view is the ATO's documented view about the application of any of the laws administered by the Commissioner^[1] in relation to a particular interpretative issue.

2. Why do we have precedential ATO views?

We have precedential ATO views to ensure that our decisions on interpretative issues are accurate and consistent.

3. What documents set out precedential ATO views?

Precedential ATO views are set out in the following documents:

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public rulings (including draft public rulings)

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ATO interpretative decisions (ATO IDs)

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decision impact statements

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documents listed in the Schedule of documents containing precedential ATO views.

4. What do I need to do when making a decision on an interpretative issue?

If you are making a decision about an interpretative issue^[2], you need to:

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search for and identify relevant precedential ATO views

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apply the precedential ATO view if you believe the facts of the interpretative issue, and the circumstances outlined in the precedential ATO view document are similar enough that the law will be applied correctly.

ATOlaw and the Legal Database allow you to search across the entire range of precedential ATO view documents.

Before you apply the precedential ATO view, you should consider whether there are circumstances which would make it appropriate to apply that view only on a prospective basis.^[3]

If you do not find a precedential ATO view, or you think the application of the precedential ATO view would result in an incorrect decision or unintended outcome, you should seek engagement of appropriate technical officers, using your business line's procedures. In these instances, a new precedential ATO view should be created.

5. What sorts of decisions do not require the application of a precedential ATO view?

You do not have to identify and apply a precedential ATO view where the decision you are making is:

•

covered by an exercise of the general powers of administration, such as those that are documented in practical compliance guidelines and law administration practice statements
In some circumstances, we provide taxpayers with practical solutions to complying with the law where there might otherwise be unreasonable administrative problems in doing so. And provided they follow our agreed approaches in good faith, you should accept this as compliance with the law.
But you should also be aware that taxpayers are not obliged to follow these approaches, and may instead adhere to the 'black letter of the law'.

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a straightforward application of the law
A straightforward application of the law would occur where the law provides clear authority for your decision, and no interpretation of certain clauses of the legislation is required.

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the exercise of a discretion
Exercising a discretion, such as an extension of time, requires you to choose between alternative courses of action. It is a decision you make after taking into account the individual circumstances at hand, weighing up the evidence and having reference to any relevant guidelines. There is no one consideration and no combination of considerations that determines the decision.

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an ultimate conclusion of fact
Some decisions require you to make an ultimate conclusion of fact for the purposes of applying the law, for example whether a taxpayer is carrying on a business. This also is a decision you make after taking all evidence into consideration and having reference to any relevant guidelines.

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determining the value of something
This is similar to making an ultimate conclusion of fact. You should follow any procedures that deal with valuation matters.

6. Who is responsible for ensuring that precedential ATO view documents remain current?

Everyone involved in interpretative work has a responsibility toward the maintenance of precedential ATO view documents because they must check the precedential ATO view in the process of applying that view.

Business lines must also have processes in place to ensure that precedential ATO view documents are reviewed and updated in a timely manner, and should ensure that they consult other business lines if required as part of this process.

Authors of new precedential ATO view documents must consider any effect the new precedential ATO view will have on existing precedential ATO view documents and ensure they are either withdrawn (with reference to the new precedential ATO view document) or updated.

The Tax Counsel Network business line has responsibility for oversight of the precedential ATO view system, as established by this practice statement, and ensuring that it operates effectively.

7. How can I access previous versions of precedential ATO view documents to see what the view was at a certain time?

Precedential ATO view documents are presented on ATOlaw and the Legal Database using point-in-time functionality. This means that there will be a link to past versions which were in effect at certain periods of time.

An explanation of all changes made to precedential ATO view documents will also be made, in the following ways:

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for a public ruling - via the formal addendum or erratum notice

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for ATO IDs - via a history table at the end of the document

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for decision impact statements - via a history table at the end of the document

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for documents on the Schedule of documents containing precedential ATO views - via a 'What's changed' section or similar, depending on the type of document and the type of change.

8. More information

For more information:

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See Schedule of documents containing precedential ATO views (internal link only)

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See Other precedential ATO views (under Other ATO documents) for a list of documents containing precedential ATO views

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Email the Law Publishing and Policy team in Tax Counsel Network.

Amendment history

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Date of Issue: 8 June 2007

Date of Effect: 19 February 2015

File 2001/7447
1-25G6G6Z

Related Practice Statements:
PS LA 2011/27

Subject References:
ATO Interpretative decisions
Commissioner' discretion
precedential ATO views
private rulings
public rulings
Schedule of documents containing precedential ATO views

Business Line:  TCN

ISSN: 2651-9526