Commonwealth Numbered Regulations - Explanatory Statements

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Statutory Rules 1992 No. 317


Taxation Administration Act 195

Taxation Administration Regulations (Amendment)

These regulations will amend the Taxation Administration Regulations as a consequence of an amendment made to the Taxation Administration Act 1953 (the Act).

The Act was amended by the Taxation Laws Amendment (Self Assessment) Act 1992 to, among other things, allow a person to apply to the Commissioner of Taxation for a private ruling about how the tax laws apply to a particular arrangement in relation to a year of income. When the Commissioner makes a private ruling, subsection 14ZAR(1) of the Act requires that a written notice of the private ruling be prepared (paragraph 14ZAR(1)(a)) and that the written notice be served on the applicant (paragraph 14ZAR(1)(b)).

New regulation 18A being inserted by these regulations prescribes how notice of a private ruling may be served on the person who applied for the ruling. Under subregulation 18A(1), a private ruling may be served on a person by delivering it to the person or by leaving it at, or posting it to, the person's address for service of the ruling.

A person's address for service is generally the address nominated in the application for the private ruling as the place where the ruling is to be sent (paragraph 18A(2)(a)). But an applicant may nominate another address for service at a later time, for instance, where the person changes a residential or business address (paragraph 18A(2)(b)).

Subregulation 18A(3) provides that a private ruling sent by prepaid post is taken to have been served on the applicant when it would have arrived in the ordinary course of the post, unless proved otherwise. The subregulation will have a practical purpose, for instance, if there is a dispute about whether an objection against a private ruling has been lodged in time. This is because one of the two alternative deadlines for lodging such an objection is 60 days from the day the private ruling was made (paragraph 14ZW(1A)(a) of the Act), and a private ruling is made when the notice of it is served on the applicant (section 14ZAT of the Act). Subregulation 18A(3) will also have a practical effect in the application of section 226M of the Income Tax Assessment Act 1936, which imposes a penalty in respect of a tax shortfall in an assessment where the shortfall was caused by a taxpayer failing to follow a private ruling given by the Commissioner. The penalty will only apply if the ruling was made before the taxpayer, when self assessing, treated the law as applying in a different way.

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