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:

(1) The ATO initiated a review of Taxation Ruling TR 96/8 (TR 96/8) when compliance activity indicated that some funds were purporting to rely on the ruling in cases where non-school activities were extensive. In those cases, it was being argued that the 50% test was met and the building was therefore a school building, even though, viewed objectively, it appeared that the design and dominant use of the building was not as a school. TR 96/8 was withdrawn when the ATO concluded that the 50% test could not be sustained as a matter of law.

(2) TR 96/8 was reviewed, and subsequently withdrawn, when it came to the ATO's attention that the 50% test was being applied to buildings used for extensive non-school activities. See the answer to question 1.

(3) There is no formal published service standard for the finalisation of public rulings. However, the ATO provides general guidance as to the expected timeframes for the publication of draft and final public rulings on its external website and publishes regular status updates for its public rulings program.

The ATO issues public rulings in draft form to seek professional, industry and community comment on its proposed position on tax issues. The ATO usually aims to issue a draft ruling for public comment within 6 months of the topic being notified as part of the public rulings program and to issue a final public ruling within 6 months of the draft ruling being published. However, timeframes for particular rulings can be affected by a range of factors, such as the complexity of the issues dealt with by the ruling, the nature of issues raised during consultation and the effect of legislative changes or court decisions.

(4) The ATO recognises that the process of finalising draft Taxation Ruling TR 2011/D5 (TR 2011/D5) has been lengthy and is aware of the community's concerns. In this case, the timeframe for issuing both the draft and final ruling was extended to enable the ATO to undertake additional consultation with peak bodies and other stakeholders, due to the level of public interest and comment on the issue. The period for comments on TR 2011/D5 was also extended in recognition of the committees that have at their core, volunteers, who are involved with administering and running of school building funds. The ATO considered the community's feedback and finalised the ruling, which was released on 13 February 2013.

(5) It is usual ATO practice to withdraw a ruling when a replacement draft ruling issues.

TR 96/8 was withdrawn with effect from 5 December 2011, the date TR 2011/D5 was issued.

In addition, the ATO recognises the need for taxpayers to have certainty in situations where it is developing its position on an issue and therefore has provided a level of protection for existing arrangements: