The application process
What's on this page
- Draft ruling
- Contrary view
- Publication of rulings
- OECD information sharing
- Withdrawing an application
- Withdrawing or correcting a ruling
Applications for rulings will be assigned to relevant business units within Inland Revenue on the basis of the technical issues in each application.
Inland Revenue will:
- do the legal analysis required to consider how the tax laws apply within the agreed time frame.
- contact you if there are questions or we need more information, and
- send you a draft ruling or a contrary view.
If we agree in principle with the legal arguments and conclusions in your application, we'll send you a draft ruling for comment. The draft ruling will include a detailed description of the facts including any specified conditions we consider are necessary, and set out our conclusions on how the tax laws apply.
If we do not consider that we can make the ruling as requested in your application, we'll write to you, setting out our initial contrary views and their legal basis. This could occur if:
- we do not agree with the legal arguments and conclusions in your ruling application
- significant changes to your arrangement would be necessary for us to conclude that we can rule as requested
- we would need to include significant conditions to rule favourably.
Once you receive a draft ruling or contrary view, you'll have the opportunity to provide us with comments. For draft rulings, you can comment on any factual matters, the wording of any specified conditions s, or our conclusions. We'll consider your comments and (if we agree) make any relevant changes to the draft ruling. When you have approved the content of the draft ruling we'll finalise it.
If you receive a letter advising you of a contrary view, you'll have one opportunity to make further arguments or submissions in response to our letter. We'll also offer to meet you to discuss our views, either before or after sending the letter.
We aim to respond to any substantive comments or submissions you make (about either a draft ruling or contrary view) within one month of receiving them.
Publication of rulings
We do not publish private rulings in any form. They are confidential between the applicant(s) and Inland Revenue. If a private ruling raises a topic of general interest, we may subsequently develop and issue a public ruling on that topic without referring to the details of the applicant(s).
We are required by law to publish product rulings two months after the ruling has been made (signed) on our website and in our Tax Information Bulletin (TIB).
If you ask us to, we can publish it before two months have passed. You may have a business reason for doing this, for example, you might want to refer to the product ruling in your advertising material.
OECD information sharing
Under Action 5 of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan, OECD and G20 countries, including New Zealand, are required to exchange information about taxpayer-specific rulings issued on cross-border activities. This will cover six categories of rulings as follows:
- Taxpayer-specific rulings related to preferential regimes (although New Zealand does not have any preferential regimes).
- Cross-border unilateral APAs and any other cross-border unilateral tax rulings covering transfer pricing or the application of transfer pricing principles.
- Cross-border rulings providing for a unilateral downward adjustment to the taxpayer’s taxable profits that is not directly reflected in the taxpayer’s financial/commercial accounts.
- Permanent establishment rulings, ie rulings concerning the existence or absence of, and/or the attribution of profits to, a permanent establishment by the country giving the ruling.
- Related party conduit rulings.
- Any other type of ruling that, in the absence of spontaneous information exchange, gives rise to BEPS concerns.
This requirement covers all private and product rulings, APAs and financial arrangement determinations that come within the above criteria. The Commissioner is required to ensure that information regarding the relevant rulings is exchanged within three months of the ruling being issued. To protect the secrecy of taxpayer information, information will only be shared with countries where New Zealand has a double tax agreement in place, and with parties to the Convention on Mutual Administrative Assistance in Tax Matters.
Withdrawing an application
You may withdraw your application for a binding ruling at any time, for any reason, before a ruling is issued, by giving notice in writing. For example, you may want to withdraw your application if you decide not to proceed with the transaction, or if you receive a contrary view from us.
You must pay any fees incurred up to the date we receive your written withdrawal.
If one party withdraws from a joint application for a private or product ruling, we will not treat this as a withdrawal by all the applicants, unless the withdrawal:
- clearly affects the "product" identified in the application, or
- results in insufficient information being provided about the application.
Withdrawing a ruling
We can withdraw a product or private ruling at any time if our interpretation of the law alters, or the courts reach a different conclusion about its meaning.
We'll notify the person who a private or product ruling applies to that we have withdrawn it and give them details of what that means. For product rulings we also publish a notice of withdrawal on our website and in the TIB.
Correcting a ruling
If a private or product ruling has a typographical or minor error that does not change the ruling's meaning, we can correct it without having to withdraw the ruling.