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 Determination 2010/D4 is not a proposed measure. Taxation determinations 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 determination, the Commissioner is simply expressing his view of the law enacted by Parliament and he applies accepted principles of statutory interpretation in doing so.

Determinations are not legally binding on taxpayers (that is, they do not create legal obligations under the tax law for them). Once finalised, they 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 determinations have no policy intent, and the government has no involvement in the issuing of taxation determinations. The Commissioner releases draft taxation determinations for public comment before finalising them.

Many taxation determinations 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 determinations 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. It is not anticipated that taxpayers will have to change any common practices or systems to comply with the extra clarification provided by this Determination in relation to the consolidation regime because it does not introduce any new treatment, over and above standard capital gains rules, that might require any new or amended practices to deal with the treatment explained in the draft Determination.

(5) (a) Micro enterprises, small and medium enterprises and large business may be affected by this Determination, depending on what they propose to do in the future. No specific industries will be affected.

(5) (b) The normal consultation process for determinations is being followed. The draft Determination was published on www.ato.gov.au on 17 November 2010and public consultation closed on 17 December 2010.

(5) (d) The Public Rulings Panel provided advice in the development of this draft Determination.