A ruling which fails in part

Amendments have been made to sections 91EB and 91FB so that a ruling can be made invalid in part rather than in full only. This is so that not all tax types are affected by the invalidity. The amendment is aimed at providing greater flexibility in the rulings process.

Background

Previously under section 91EB(2), a binding ruling which was based on facts or circumstances which were materially different from the arrangement actually undertaken was treated as fully invalid even if those differences were material only to certain aspects of the ruling. An example was when a ruling related to both GST and income tax and the material difference related only to GST.

Key features

Sections 91EB and 91FB have been amended to provide that if the invalidity of a ruling relates only to a certain tax type or types involved in the ruling, the other parts of the ruling relating to other tax types will continue to apply.

Application date

The amendments apply from the day of Royal assent, being 7 September 2010. When the bill was introduced, the amendment was to apply from the date of the bill's enactment. Following submissions, the application date was amended to apply to existing rulings.