Ability to rule when the matter is subject to a case before the courts

The Commissioner's discretion not to rule on matters before the courts has been clarified by limiting its application to cases involving substantially similar arrangements. The amendment has clarified when the Commissioner will exercise the discretion.

Background

The Commissioner had a discretion under which he could decline to rule "if the matter on which the ruling is sought is subject to an objection, challenge or appeal, whether in relation to the applicant or to any other person". The provision was expressed in general terms and the scope of the provision, particularly the term "matter", was unclear. The provision did not allow for an unduly narrow interpretation such as requiring an identical transaction or the same (or associated) taxpayer. At the other extreme, it would have been inappropriate to apply the provision to all instances when an issue arose that was commonly determined in a transaction - for example, the application of the general anti-avoidance provision - as that would have allowed the Commissioner to turn down any ruling application on that issue. This lack of clarity did not give businesses certainty.

Key features

Sections 91E(3)(b) and 91F(3)(b) have been amended to clarify the Commissioner's discretion not to rule on matters which are the subject of a dispute with the applicant or another person. The application of the discretion has been limited to an arrangement on which the ruling is sought, or a separately identifiable part of that arrangement, which is substantially the same as an arrangement which is before the courts.

Application date

The amendments apply from the day of Royal assent, being 7 September 2010.