Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

Taxation Ruling 2010/D8 is not a proposed measure. Taxation rulings do not alter the existing tax law, but rather set out the Commissioner of Taxation's interpretation of how the existing law works. In a ruling, the Commissioner is simply expressing his view of the law enacted by Parliament and he applies accepted principles of statutory interpretation in doing so.

Taxation rulings are not legally binding on taxpayers (that is, they do not create legal obligations under the tax law for them). Rulings, once finalised, are only binding on the Commissioner. Their legal effect is to protect taxpayers who choose to follow the Commissioner's views expressed in them. Taxation rulings have no policy intent, and the Government has no involvement in the issuing of taxation rulings. The Commissioner releases draft taxation rulings for public comment before finalising them.

Most taxation rulings are considered by the ATO's Public Rulings Panel. The Panel advises the Commissioner on the issues proposed to be dealt with in taxation rulings and determinations and is made up of senior ATO officers and external experts.

Taxation rulings do not have a revenue impact on the forward estimates because, as far as the law allows, the Commissioner interprets the law consistent with policy intent on which revenue estimates were based. However, they may have a compliance leverage impact by protecting the forward estimates to the extent that revenue is at risk from taxpayers not applying the law properly. The ATO is therefore unable to provide an answer to questions (1), (2), (3), (5) (c), (6), (7), (8), (9), (10) and (11).

(4) Yes. Taxpayers who receive retail premiums should be recording them either as unfranked dividends or ordinary income. The ruling also explains to companies who pay retail premiums to non-residents that they may have withholding tax responsibilities.

(5) (a) Major corporations which have paid or may pay retail premiums to their shareholders who have not been applying the law correctly, may be affected, as may their shareholders.

(5) (b) Consultation has occurred with relevant stakeholders, their legal/accounting advisers and certain professional bodies by representatives of the ATO. These stakeholders were given an advanced draft of this draft Ruling to comment and present submissions on.

The normal consultation process for rulings is being followed. The draft ruling was published on www.ato.gov.au on 8 December 2010 and public consultation closed on 10 February 2011.

(5) (d) The Public Rulings Panel provided advice in the development of this draft Ruling. Some key stakeholders, legal and accounting practitioners and professional bodies were invited to attend, and give a presentation to, the Public Rulings Panel.