House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 3 - Binding oral advice on income tax matters

Outline of Chapter

3.1 The amendments contained in Part 1 of Schedule 3 to this Bill will insert a new Part in the TAA 1953. The Schedule will contain new Part 5-5 the new oral rulings regime.

3.2 The amendments contained in Part 2 of Schedule 3 to this Bill will insert new sections in the ITAA 6. They will provide for an oral ruling to be binding upon the Commissioner in much the same way as a written private ruling is. They will also determine the priority of conflicting rulings, whether written or oral, that apply for the same income year.

Context of Reform

3.3 Currently, the Commissioner is not bound by his or her oral advice in the same way as by written rulings. Where a taxpayer relies, to their detriment, on incorrect oral advice their assessment and final tax is determined according to the income tax law without regard to the fact that they relied on incorrect oral advice given by the Commissioner.

3.4 On 13 August 1998, the Government announced, in ANTS, its intention to ensure that taxpayers with simple tax affairs can rely on oral advice received from the ATO. Under this reform, oral advice will be binding on the Commissioner in much the same way as written private rulings.

3.5 Abbreviations used throughout this Chapter are summarised in the glossary following the Table of contents for this Explanatory Memorandum. Where not specifically stated, legislative references throughout this Chapter (eg. sections, subsections and paragraphs) in relation to the new oral rulings regime are references to provisions in new Part 5-5 of Schedule 1 to the TAA 1953.

Summary of new law

3.6 New Part 5-5 will provide that an individual can apply to the Commissioner for an oral ruling about a range of matters under an income tax law where they meet the requirements of having simple tax affairs and a simple inquiry.

3.7 Amendments to the ITAA 6 will provide that, where a taxpayer applies for, and is given, an oral ruling and the income tax law applies in a different way which is less favourable to the taxpayer than is the oral ruling, the Commissioner will be bound by the oral ruling. An oral ruling is more favourable to the taxpayer if an assessment of the taxpayer in accordance with it would result in a lesser amount of final tax than an assessment raised in accordance with the terms of the income tax law. An oral ruling will not be binding on the taxpayer.

3.8 The amendments will also provide for the priority of rulings where an oral ruling conflicts with either public rulings or written private rulings or both.

3.9 The amendments to the TAA 1953 and the ITAA 6 will apply from 1 July 2000 with effect for the 2000-2001 income year and later income years. [Item 2 of Part 1 of Schedule 1]

Detailed explanation of new law

Overview of the oral rulings regime

3.10 An oral ruling will be binding on the Commissioner in much the same way as written private rulings are. However, an oral ruling will not be binding on the taxpayer. Broadly, where an individual with simple tax affairs and a simple inquiry is given an incorrect oral ruling affecting their assessment and final tax, The Commissioner will be bound by that oral ruling where it is favourable to the taxpayer i.e. results in a lower amount of final tax payable than would an assessment raised in accordance with the income tax law .

3.11 A taxpayer will not be able to obtain an oral ruling in circumstances where they would not have been able to obtain a written private ruling. Further, the eligibility tests for the oral rulings regime mean that its scope will be narrower than that of the written private rulings regime. In particular, it will only apply to resident individuals who are not in business and are not withholders .

What is an oral ruling?

3.12 An oral ruling means a ruling applied for under section 360-20 or 360-25. It is a ruling given to an individual, on the way in which, in the Commissioner's opinion, an income tax law would apply to a taxpayer in respect of an income year in relation to an oral ruling arrangement . [Section 360-20 and subsection 360-25(1)]

3.13 An oral ruling arrangement is:

•

an action;

•

a course of action;

•

a course of conduct; or

•

a transaction;

that has been, is being, or is proposed to be, engaged in, entered into or carried out, but only if none of the parties to it is an associate of any of the others. [Subsection 360-30(2)]

Applying for an oral ruling

How the application is to be made

3.14 A taxpayer must make their application orally, either in person or by live 2-way conversation using a method of communication approved by the Commissioner. [Subsection 360-35(1)] When applying for an oral ruling , the taxpayer (or an authorised person) does not need to use any particular form of words or technical language. However, they must make it clear that they are seeking an oral ruling and not, for example, non-binding oral advice.

3.15 As the oral rulings regime refers to an individual in that capacity, an individual will not be able to apply for an oral ruling in any other capacity. For example, an individual who is a trustee cannot apply for an oral ruling in their capacity as trustee. [Existing subsection 960-100(4) of the ITAA 1997]

3.16 In addition, when a taxpayer makes an application for an oral ruling, they must identify themselves to the Commissioner's satisfaction. Where an authorised person makes an application on behalf of the taxpayer, they must identify the taxpayer to the Commissioner's satisfaction. The taxpayer, or that authorised person, must also give whatever information, in whatever form, the Commissioner requires in order to make the oral ruling. [Subsection 360-35(2)]

3.17 The Commissioner must request that the taxpayer give him or her further information where he or she considers that a ruling cannot be made without further information and that, if the information were given, there would be no reason not to comply with the taxpayer's application. [Section 360-40]

Application for an oral ruling by a person authorised to make inquiries on behalf of a taxpayer

3.18 A person is only authorised to apply to the Commissioner for an oral ruling on a taxpayer's behalf in the circumstances specified in section 360-25. If an authorised person does apply on a taxpayer's behalf, the oral rulings regime has effect as if the taxpayer had made the application himself or herself. Consequently, it is the taxpayer who must satisfy the requirements which govern when the Commissioner may give an applicant an oral ruling. [Subsection 360-25(3)]

3.19 The authorised person may communicate with the Commissioner and otherwise deal with him or her, as if they were the taxpayer. The Commissioner may communicate with the authorised person, and otherwise deal with them, as if they were the taxpayer. [Paragraphs 360-25(3)(a) and (b)]

When the taxpayer can authorise another person to apply on their behalf

3.20 The requirement that a taxpayer must apply for an oral ruling on their own behalf means that, with one limited exception, they cannot authorise another person, either in writing or otherwise, to apply on their behalf. The exception arises where an enduring power of attorney has been provided by a taxpayer who has subsequently become legally incapacitated because of a mental impairment. The holder of the enduring power of attorney may, in these circumstances, apply for an oral ruling on behalf of that legally incapacitated taxpayer. [Paragraph 360-25(2)(c)]

When another person is authorised to apply on a taxpayer's behalf

3.21 Another person may apply for an oral ruling on a taxpayer's behalf where the taxpayer is:

•

under 18:

-

and is the child of the other person; or

-

the other person has, in relation to the taxpayer, all the duties, powers, responsibilities and authority which, by law, a parent has in relation to a child; or

-

the other person is authorised by an Australian law to act on behalf of the taxpayer, in matters including their tax affairs ;

•

mentally impaired:

-

and the other person is authorised by an Australian law to act on behalf of the taxpayer, in matters including their tax affairs; or

-

the other person holds an enduring power of attorney in relation to that taxpayer. This may also be referred to as a protected power of attorney in some jurisdictions.

•

physically impaired:

-

and the other person is authorised by an Australian law to act on behalf of the taxpayer, in matters including their tax affairs.

[Subsection 360-25(2)]

What the application can cover

3.22 An application for an oral ruling may relate to:

•

a past income year; or

•

the income year in which the application is made.

It cannot relate to a future income year, or to more than one income year. [Subsection 360-30(1)]

3.23 The application may be for an oral ruling on the way in which the Commissioner would act under the income tax law to which the application relates. This covers the following kinds of acts:

•

forming an opinion, or refusing or failing to form an opinion; or

•

attaining a state of mind, or refusing or failing to attain a state of mind; or

•

making a determination, or refusing or failing to make a determination; or

•

exercising a power, or refusing or failing to exercise a power.

[Subsections 360-30(3) and (4)]

3.24 A taxpayer will be given more than one oral ruling where the same issue relates to more than one income year or the taxpayer raises more than one issue for the same income year.

Example 3.1

Janet has 2 questions that relate to the 2000-2001 income year. Her tax affairs and both inquiries satisfy the tests within the oral rulings regime, including those relating to the basic categories. Janet is entitled to receive 2 oral rulings, each with its own registration identifier.

An application for an oral ruling does not affect a taxpayer's obligations or the Commissioner's powers

3.25 Although a taxpayer may have applied for an oral ruling this does not in the meantime affect:

•

their obligation to lodge a return or do any other act; or

•

the Commissioner's power to make or amend an assessment.

[Section 360-175]

Withdrawal of application

3.26 A taxpayer may withdraw their application for an oral ruling before the ruling is made. They must do so orally, either in person or by live 2-way conversation using a method of communication approved by the Commissioner. [Subsection 360-35(3)]

How the Commissioner is to deal with the application

If the application relates only to basic categories

3.27 The Commissioner must give a taxpayer an oral ruling if he or she is satisfied that:

•

their application complies with Subdivision 360-A; and

•

their assessable income, exempt income , deductions and tax offsets , for the inquiry period, satisfy the requirements in sections 360-70, 360-75, 360-80 and 360-85 respectively; and

•

during the inquiry period, no CGT event happened from which the taxpayer could have made a capital gain or capital loss (even if the taxpayer did not make one from the event); and

•

their application relates only to the assessable income, exempt income, deductions or tax offsets within the basic categories;

unless Subdivision 360-C prevents the Commissioner from complying with the application. [Section 360-65]

3.28 However, a taxpayer can have an unapplied net capital loss for a previous income year which they are unable to apply as they did not make a capital gain. [Note to paragraph 360-65(1)(c)]

Inquiry period

3.29 If an oral ruling application relates to an earlier income year - the inquiry period is that income year. [Paragraph 360-65(2)(a)]

3.30 If an oral ruling application relates to the income year during which the appliation is made - the inquiry period is so much of the income year as elapses up to and including the day on which the taxpayer makes the application. [Paragraph 360-65(2)(b)]

If the application involves additional categories

3.31 The Commissioner must also give a taxpayer an oral ruling if:

•

he or she is satisfied that their application complies with Subdivision 360-A; and

•

in his or her opinion, their tax affairs were simple throughout the inquiry period; and

•

in his or her opinion, their inquiry is simple; and

•

he or she is satisfied that their assessable income for the inquiry period consisted only of one or more items, each of which is covered by section 360-70 (basic categories) or section 360-105 (additional categories); and

•

he or she is satisfied that their exempt income (if any) for the inquiry period consisted only of one or more items covered by section 360-75 (basic categories); and

•

he or she is satisfied that their deductions for the inquiry period consisted only of one or more items, each of which is covered by section 360-80 (basic categories) or section 360-110 (additional categories); and

•

he or she is satisfied that their tax offsets for the inquiry period consisted only of one or more items, each of which is covered by section 360-85 (basic categories) or section 360-115 (additional categories); and

•

he or she is satisfied of the matters in subsections 360-100(2), (3) and (4) (about the taxpayer's capital gains tax situation);

unless Subdivision 360-C prevents the Commissioner from complying with the application. [Subsection 360-100(1)]

CGT events

3.32 The Commissioner must be satisfied that no CGT event happened during the inquiry period from which the taxpayer could have made a capital gain or capital loss (even if they did not make one from the event) except a CGT event from which they could have made a capital gain or capital loss covered by subsection 360-100(3) - see discussion at paragraph 3.33. [Subsection 360-100(2)]

Capital gains and losses

3.33 The Commissioner must be satisfied that each capital gain (if any), and each capital loss (if any), that the taxpayer made during the inquiry period:

•

is to be disregarded because of section 118-5 of the ITAA 1997 (about cars, motor cycles and valour decorations); or

•

resulted from CGT event A1 happening in relation to shares in a company that was an Australian resident and a listed public company , and whose shares were listed for quotation in the official list of the Australian Stock Exchange Limited, throughout the period when they owned the first-mentioned shares; or

•

resulted from CGT event A1 or E4 happening in relation to units in a unit trust that was a resident trust for CGT purposes and a listed widely held trust (within section 272-115 of the ITAA 6), and whose units were listed for quotation in the official list of the Australian Stock Exchange Limited, throughout the period when they owned the first-mentioned units.

However, a taxpayer is not disqualified if CGT event E4 results in a reduction of the cost base of their units, rather than in a capital gain. [Subsection 360-100(3) and the note to paragraph 360-100(3)(c)]

Net capital loss for an earlier income year

3.34 If, during the inquiry period, the taxpayer made one or more capital gains each of which is covered by paragraph 360-100(3)(b) or (c), the Commissioner must be satisfied that the taxpayer has no unapplied net capital loss for an earlier income year. [Subsection 360-100(4)] However, a taxpayer can have unapplied net capital losses for a previous income year that they are unable to apply as they did not make a capital gain. [Note to subsection 360-100(4)]

Operation of the rules relating to basic categories

Assessable income

3.35 The assessable income that a taxpayer may derive during the inquiry period and still satisfy the basic categories is:

•

payments to them as an employee, company director or office holder or a Commonwealth education and training payment as mentioned in sections 12-35, 12-40, 12-45 and 12-115 in Schedule 1 to the TAA 1953;

•

the following types of payments:

-

social security payments;

-

veterans' affairs payments;

-

payments made under the Repatriation Act 1920 ;

-

an education entry payment.

[Subsections 360-70(1) and (2)]

Example 3.2

For example, a taxpayer's assessable income may include one or more of the following amounts:

•

salary and wages, commissions, bonuses;

•

Newstart allowance, youth allowance, AUSTUDY, ABSTUDY, widow allowance;

•

age pension, bereavement allowance, carer payment, disability support pension, mature age allowance, parenting payment, widow B pension, age service pension, carer service pension, invalidity service pension, partner service pension.

•

interest that is payable by a financial institution or a government body [subsection 360-70(3)] ; or

•

a dividend that is paid by a company that is an Australian resident, and a listed public company whose shares are listed for quotation on the official list of the Australian Stock Exchange Limited when the dividends are declared (if the liability to pay arises at this time); when the dividend becomes due and payable; or when the dividend is paid, whichever is earliest [subsection 360-70(4)] .

Exempt income

3.36 The ordinary income or statutory income , to the extent that it is exempt income, that a taxpayer may derive during the inquiry period and still satisfy the basic categories is:

•

a non-cash benefit that is exempt according to subsection 23L(1) of the ITAA 6;

•

the following types of payments:

-

certain payments to defence personnel;

-

Australian-American Educational Foundation grants;

-

certain welfare payments;

-

social security payments;

-

veterans' affairs payments;

-

payments made under the Repatriation Act 1920 ;

-

payments made because of subsection 4(6) of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 ;

-

payment of child care assistance or child care rebate;

-

private health insurance incentive payment;

-

bonus payments made to certain older Australians;

-

Commonwealth education and training payment;

-

a disability services payment, a domicilary nursing care benefit, or a wounds and disability pension;

-

payments that are similar to Australian and United Kingdom veterans' payments.

[Section 360-75]

Deductions

3.37 The deductions that a taxpayer may be entitled to for the inquiry period and still satisfy the basic categories are amounts that are:

•

expenditure incurred for managing tax affairs as mentioned in paragraph 25-5(1)(a) of the ITAA 1997; or

•

an account-keeping fee charged by a financial institution; or

•

a tax imposed under an Australian law on an account kept with a financial institution (e.g. financial institutions duty, debits tax or a similar tax); or

•

money, (but not property or trading stock), that is a gift or contribution to which items 1, 2 or 3 of the table in section 30-15, of the ITAA 1997 applies.

[Section 360-80]

Tax offsets

3.38 The following is a list of tax offsets to which a taxpayer may be entitled during the inquiry period and still satisfy the basic categories:

•

child-housekeeper - child works full time keeping house for the taxpayer;

•

housekeeper - caring for child, invalid relative or disabled spouse;

•

maintaining the taxpayer's parent(s), spouse's parent(s) or an invalid relative;

•

sole parent rebate;

•

spouse rebate;

•

low income aged person;

•

certain low income individuals;

•

net medical expenses over $1,250;

•

30% private health insurance rebate;

•

beneficiary rebate for certain social security benefits or payments;

•

pensioner rebate for certain social security or veterans' pensions, allowances or benefits;

•

franked dividend offset (imputation credit) received by the taxpayer as a shareholder;

•

personal superannuation contributions rebate for low income earners;

•

superannuation contributions for a non-working or low income-earning spouse;

•

zone rebate for residents of isolated areas.

[Section 360-85]

3.39 If a taxpayer does not satisfy the basic categories, or their inquiry is in respect of a matter not encompassed by the basic categories, they may still be entitled to an oral ruling under the additional categories.

Operation of the rules for additional categories

Assessable income

3.40 The assessable income that a taxpayer may derive during the inquiry period and still satisfy the additional categories is:

•

a pension or annuity as mentioned in section 12-80 of Schedule 1 to the TAA 1953; or

•

compensation, sickness or accident pay as mentioned in section 12-120 of Schedule 1 to the TAA 1953; or

•

a payment of a pension under an occupational superannuation scheme as mentioned in subsection 55-5(1) of the ITAA 1997; or

•

a distribution made by a unit trust that, at the time when the distribution becomes due and payable or when the distribution is made (whichever is earliest) is a listed widely held trust that is a resident trust for CGT purposes and whose units are listed for quotation in the official list of the Australian Stock Exchange Limited; or

•

a net capital gain as provided for in paragraphs 360-100(3)(b) and (c).

[Section 360-105]

Deductions

3.41 A taxpayer's deductions for the inquiry period may include amounts that relate to assessable income derived as an employee, company director or office holder. [Section 360-110]

Tax offsets

3.42 A taxpayer's tax offsets for the inquiry period may include:

•

overseas forces rebate - for serving overseas as a member of Australia's Defence Force or a United Nations armed force;

•

franked dividend offset (imputation credit) received by the taxpayer as a beneficiary of a trust;

•

rebateable eligible termination payment (ETP) annuity;

•

rebateable superannuation pension;

•

credit for foreign tax paid on foreign income;

•

heritage conservation rebate;

•

rebate for interest from Government securities issued before 1 November 1968; or

•

rebate on certain lump sum payments in arrears;

[Section 360-115]

3.43 If the taxpayer does not satisfy the additional categories or, in the Commissioner's opinion, their tax affairs and inquiry are not simple, they will not be given an oral ruling . They may, however, be given non-binding oral advice or, they may apply, in writing, for a written private ruling.

When the Commissioner cannot be required to comply with an application

Aspects of a taxpayer's tax affairs that disqualify them

3.44 The Commissioner must not comply with a taxpayer's application for an oral ruling unless he or she is satisfied that:

•

the taxpayer is an Australian resident throughout the inquiry period; and

•

the taxpayer, at no time during the inquiry period, carried on a business; and

•

the taxpayer, at no time during the inquiry period, was a withholder; and

•

their assessable income for the inquiry period did not include an amount in respect of a non-cash benefit .

[Subsection 360-140(1)]

Other grounds on which an application must be refused

3.45 The Commissioner must not comply with the taxpayer's application for an oral ruling if, in his or her opinion:

•

the taxpayer's application for an oral ruling is frivolous or vexatious; or

•

the oral ruling arrangement to which the application relates has not been, and is not being, carried out and is not seriously contemplated by the taxpayer; or

•

the taxpayer has not given sufficient information, despite a request under section 360-40, to enable the ruling to be made; or

•

it would be unreasonable to comply, or continue to attempt to comply, having regard to the extent of the Commissioner's resources that would be required to comply.

[Subsection 360-145(2)]

3.46 The Commissioner must not comply with a taxpayer's application for an oral ruling in so far as it involves calculating an amount. [Subsection 360-145(3)]

Example 3.3

Calculations that would not form part of an oral ruling:

•

calculation of a taxpayer's taxable income, tax payable or tax refund for an income year;

•

calculation of an amount to be included at a label on a return; or

•

calculation of a rebate entitlement.

3.47 The Commissioner need not comply with a taxpayer's application for an oral ruling if he or she is satisfied that, had the application been for a written private ruling, he or she would not have been required to comply with it. [Subsection 360-145(4)]

When an oral ruling is taken never to have been made

Aspects of a taxpayer's tax affairs that disqualify them

3.48 The Commissioner must not comply with a taxpayer's application for an oral ruling if:

•

the taxpayer's assessable income or exempt income for the inquiry period includes an amount arising from a transaction with their associate ; or

•

the taxpayer's deductions for the inquiry period include an amount paid to their associate; or

•

an anti-avoidance provision applies to the taxpayer during the income year to which their application relates.

[Subsection 360-140(2)]

Other grounds on which an application must be refused

3.49 The Commissioner must not comply with a taxpayer's application for an oral ruling if:

•

there is already an oral ruling, in respect of the same income year, on the matter sought to be ruled on; or

•

there is already a written private ruling on the matter sought to be ruled on; or

•

the matter sought to be ruled on has been decided for the purposes of a Commissioner assessment ; or

•

a tax audit is being carried out of which the taxpayer has been informed and which, in the Commissioner's opinion, will require the Commissioner to decide the matter sought to be ruled on; or

•

the matter sought to be ruled on is the subject of an objection against a self-assessment ; or

•

the taxpayer is a not a SPOR taxpayer for the income year to which their application relates, and the application is made later than 4 years after the last day allowed to them for lodging an income tax return for that income year; or

•

the taxpayer is a SPOR taxpayer for the income year to which their application relates, and the application is made later than 2 years after the last day allowed to them for lodging an income tax return for that income year.

[Subsection 360-145(1)]

Effect on oral ruling if provisions not complied with

3.50 An oral ruling is taken never to have been made, and never to have been communicated, if subsection 360-140(2) or 360-145(1) applied to the application for the ruling. However, the validity of an oral ruling is not affected because any other provision of the TAA 1953 has not been complied with. [Section 360-155]

Making an oral ruling

How and when an oral ruling is made

3.51 The Commissioner makes an oral ruling by communicating its contents to the taxpayer orally, either in person or by live 2-way conversation using a method approved by the Commissioner. The ruling is made at the time of the communication. [Subsection 360-120(1)]

3.52 The taxpayer is not entitled to receive a written record of the communication. [Subsection 360-120(3)] However, a taxpayer who requires a written record of advice could apply for a written private ruling under Part IVAA of the TAA 1953. [Note to subsection 360-120(3)]

Delegated power must be exercised at specified place

3.53 An oral ruling can only be made by a person to whom the Commissioner has delegated a function or power under Division 360. The person must perform the function, or exercise the power, at places specified in the delegation. The person may communicate with a person who is not at such a place by live 2-way conversation using a method approved by the Commissioner in order to perform the function or exercise the power. [Section 360-60]

Content of an oral ruling

3.54 The communication must:

•

set out the matter ruled on; and

•

identify the person to whom, and the income tax law, the income year and the oral ruling arrangement to which, the ruling relates; and

•

indicate that the ruling is an oral ruling; and

•

if the correctness of the ruling depends on an assumption - set out the details of the assumption; and

•

include a registration identifier for the ruling.

[Subsection 360-120(2)]

3.55 The registration identifier is not required to be provided by a taxpayer in order to establish that they have been given an oral ruling. However, the quotation of a valid registration identifier will be evidence that an oral ruling was provided.

Assumptions

3.56 If the Commissioner considers that the correctness of an oral ruling would depend on which assumptions were made about a future event or other matter, The Commissioner may decline to make the ruling or make such assumptions as he or she considers most appropriate. [Section 360-150]

Who can rely on an oral ruling

3.57 Only the taxpayer may rely on the oral ruling. [Subsection 360-5(4)]

Effect on oral ruling if tax law re-enacted

3.58 If the Commissioner makes an oral ruling about an income tax law (the old law) and that law is re-enacted or remade (the new law), the ruling is taken also to be an oral ruling about the new law but only in so far as the new law expresses the same ideas as the old law. This is irrespective of whether or not the old law was re-enacted or remade with or without modifications and whether or not the old law was repealed. [Section 360-180]

Remedies available to a taxpayer who is dissatisfied with an oral ruling

3.59 A taxpayer is not bound by an oral ruling. [Subsection 360-5(5)]

3.60 Neither a taxpayer nor anyone else is entitled to object against an oral ruling under Part IVC of the TAA 1953. The oral ruling is not a taxation decision for the purposes of that Part. [Subsection 360-120(4)]

3.61 A taxpayer who is dissatisfied with an oral ruling may request a written private ruling. If they do so, they will be able to exercise the objection rights conferred under the written private rulings regime if they are dissatisfied with the private ruling . [Note to subsection 360-120(4)]

The effect of an oral ruling

3.62 Where a taxpayer applies for and is given an oral ruling and the income tax law applies in a different way which is less favourable to the taxpayer than is the oral ruling, the Commissioner will be bound by the oral ruling. An oral ruling is more favourable to the taxpayer if an assessment of the taxpayer in accordance with it would result in a lesser amount of final tax than an assessment raised in accordance with the terms of the income tax law. [New section 170BCA of the ITAA 6; item 5 of Schedule 3]

3.63 However, consistent with the written private rulings regime, the taxpayer will not be entitled to rely on the oral ruling and pay the lesser amount of tax if the facts on which the oral ruling was based differ from what actually transpired during the inquiry period.

Priority of rulings

3.64 Where a taxpayer has been given an oral ruling that conflicts with a public ruling, the taxpayer's assessment and amount of final tax will be determined according to the ruling that provides them with the lowest amount of final tax. [New section 170BDA of the ITAA 6; item 6 of Schedule 3]

3.65 Where there are 2 or more conflicting public rulings and a conflicting oral ruling, the assessment and amount of final tax must be determined according to the ruling that results in the lowest amount of final tax. [New section 170BDA of the ITAA 6; item 6 of Schedule 3]

3.66 Where a taxpayer has been given an oral ruling and a later written private ruling on the same subject matter for the same income year, the taxpayer's assessment and amount of final tax will be determined according to the written private ruling. [New section 170BDB of the ITAA 6; item 6 of Schedule 3]

3.67 Where there are 2 or more conflicting written private rulings and a conflicting oral ruling, the assessment and amount of final tax must be determined according to the written private ruling that results in the lowest amount of final tax. [New section 170BDB of the ITAA 6; item 6 of Schedule 3]

3.68 Where a public ruling, a later written private ruling and an oral ruling conflict, the taxpayer's assessment and amount of final tax will be determined as they would have been had the oral ruling not been given. [New section 170BDC of the ITAA 6; item 6 of Schedule 3]