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/D10 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. This draft Determination explains that taxpayers are able to take steps to ensure that the value of their deemed loans are reduced (possibly to nil) when the loan from the private company to an interposed entity complies with the requirements of section 109N.

(5) (a) Individuals, micro enterprises and small and medium enterprises may be influenced by clarification provided in this Determination. 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 15 December 2010 and public consultation closed on 4 February 2011. In addition, the ATO has consulted with representatives from peak professional bodies prior to issuing this draft Determination.

(5) (d) No, apart from the consultation process mentioned in the answer to (5) (b).