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Private rulings: What they are, and how they can help
Taxpayers with a concern that a particular transaction they intend on undertaking (or have undertaken) may give rise to an unanticipated tax outcome can apply for a “private ruling” from the Tax Office.
These are rulings made by the Commissioner of Taxation in relation to the application of a provision in the tax law to a certain set of circumstances of the taxpayer.
Asking for a private ruling can be a good way to “test-drive” an arrangement you may be considering, especially where current information from the Tax Office (such as public rulings) doesn’t seem to adequately cover all the bases.
Each private ruling is specific to the taxpayer who applied for it, and only to the situation and income years considered by the ruling, and can’t be picked up as a standard by any other taxpayer.
Some important considerations in respect of applying for a private ruling are follows:
It is also worth noting that if a private ruling affects one of your earlier tax assessments, the Tax Office will not
automatically amend it unless you make a point of submitting a written request for an amendment.
Edited private rulings
Edited versions of private rulings are publicly accessible on the Tax Office website in the Register of Private Binding Rulings. These edited private rulings are to enhance the integrity and transparency of the Tax Office’s decision making processes.
How to apply for a private ruling
You can apply for a private ruling yourself (click here for the private ruling application form, plus some calculators) but a much safer and surer option is to ask this office for help and guidance. For companies, a public officer can apply, or a partner of a partnership or a trustee of a trust estate. You can find out more information by checking here, or ask this office.
And just because you apply for a private ruling doesn’t mean you are going to get one. The Tax Office can refuse if it thinks (i) a ruling would prejudice or restrict the law, (ii) if you are being audited over the same issue, or (iii) if it deems your application to be “frivolous” or “vexatious”.
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