TAX LAWS AMENDMENT (IMPROVEMENTS TO SELF ASSESSMENT) BILL (NO. 2) 2005

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Contents

1 Short

title ...........................................................................................2

2 Commencement.................................................................................2

3 Schedule(s) ........................................................................................2

Schedule 1--Assessments

Part 1--Amending assessments

Income Tax Assessment Act 1936

Part 2--Nil assessments

Income Tax Assessment Act 1936

Part 3--Making assessments for the 2003-04 year of income or

earlier

Income Tax Assessment Act 1936

Part 4--Consequential amendments

Division 1--SPOR taxpayer provisions

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Division 2--Nil assessment provisions

Income Tax Assessment Act 1936

Taxation Administration Act 1953

Taxation (Interest on Overpayments and Early Payments) Act 1983

Division 3--Other provisions

Child Support (Assessment) Act 1989

Income Tax Assessment Act 1936

Income Tax (Transitional Provisions) Act 1997

Schedule 2--ATO advice

Part 1--Rulings

Taxation Administration Act 1953

Part 2--Consequential amendments

Fringe Benefits Tax Assessment Act 1986

Higher Education Support Act 2003

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

A Bill for an Act to amend the law relating to

taxation, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (Improvements

to Self Assessment) Act (No. 2) 2005.

2 Commencement

This Act commences on the day on which it receives the Royal

Assent.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

Schedule 1 Assessments

Part 1 Amending assessments

4 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Schedule 1--Assessments

Part 1--Amending assessments

Income Tax Assessment Act 1936

1 Subsections 170(1) to (7)

Repeal the subsections, substitute:

(1) The Commissioner may amend an assessment as follows:

Amendment of assessments

Time of amendment

Qualification

1 The Commissioner may

amend an assessment of an

individual for a year of

income within 2 years after

the day on which the

Commissioner gives notice

of the assessment to the

individual.

This item does not apply:

(a) if the individual carries on a business at any

time in that year unless the individual is an STS

taxpayer for that year; or

(b) if the individual is a partner in a partnership

that carries on a business at any time in that

year unless the partnership is an STS taxpayer

for that year; or

trust estate at any time in that year (see item 3

for this case); or

(d) if the individual is a beneficiary of a trust estate

at any time in that year unless the trust is an

STS taxpayer for that year or the trustee of the

trust (in that capacity) is a full self-assessment

taxpayer for that year; or

(e) if it is reasonable to conclude that any person

entered into or carried out a scheme (either

alone or with others) for the sole or dominant

purpose of the individual obtaining a scheme

benefit in relation to income tax from the

scheme for that year; or

(f) in any other circumstance prescribed by the

regulations.

This item is subject to items 5 and 6.

Assessments Schedule 1

Amending assessments Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Amendment of assessments

Time of amendment

Qualification

2 The Commissioner may

amend an assessment of a

company that is an STS

taxpayer for the year of

income to which the

assessment relates within 2

years after the day on which

the Commissioner gives

notice of the assessment to

the company.

This item does not apply:

(a) if the company is a partner in a partnership that

carries on a business at any time in that year

unless the partnership is an STS taxpayer for

that year; or

(b) to a company in the capacity of a trustee of a

trust estate at any time in that year (see item 3

for this case); or

at any time in that year unless the trust is an

STS taxpayer for that year or the trustee of the

trust (in that capacity) is a full self-assessment

taxpayer for that year; or

(d) if it is reasonable to conclude that any person

entered into or carried out a scheme (either

alone or with others) for the sole or dominant

purpose of the company obtaining a scheme

benefit in relation to income tax from the

scheme for that year; or

(e) in any other circumstance prescribed by the

regulations.

This item is subject to items 5 and 6.

Schedule 1 Assessments

Part 1 Amending assessments

6 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Amendment of assessments

Time of amendment

Qualification

3 The Commissioner may

amend an assessment of a

person (in the capacity of a

trustee of a trust estate) for a

year of income if the trust is

an STS taxpayer for that

year.

The Commissioner may

amend the assessment

within 2 years after the day

on which he or she gives

notice of the assessment to

the person.

This item does not apply:

(a) if the person (in that capacity) is a partner in a

partnership that carries on a business at any

time in that year unless the partnership is an

STS taxpayer for that year; or

(b) if the person (in that capacity) is a beneficiary

of another trust estate at any time in that year

unless the other trust is an STS taxpayer for

that year or the trustee of the other trust (in that

capacity) is a full self-assessment taxpayer for

that year; or

entered into or carried out a scheme (either

alone or with others) for the sole or dominant

purpose of the person (in that capacity)

obtaining a scheme benefit in relation to

income tax from the scheme for that year; or

(d) in any other circumstance prescribed by the

regulations.

This item is subject to items 5 and 6.

4 If item 1, 2 or 3 does not

apply, the Commissioner

may amend an assessment

within 4 years after the day

on which he or she gives

notice of the assessment to

the taxpayer.

This item is subject to items 5 and 6.

5 The Commissioner may

amend an assessment at any

time if he or she is of the

opinion there has been fraud

or evasion.

None.

Assessments Schedule 1

Amending assessments Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Amendment of assessments

Time of amendment

Qualification

6 The Commissioner may

amend an assessment at any

time:

(a) to give effect to a

decision on a review or

appeal; or

(b) as a result of an

objection made by the

taxpayer or pending a

review or appeal.

None.

Note 1:

This section applies to assessments where no tax is payable: see the

definition of assessment in subsection 6(1).

Note 2:

This section also applies to amended assessments: see section 173.

However, there are limits on how amended assessments can be

amended: see subsections (2) and (3) of this section.

Note 3:

The amendment period mentioned in item 1, 2, 3 or 4 may be

extended: see subsections (5) to (7).

Limit on amending amended assessments under subsection (1)

(2) The Commissioner cannot amend an amended assessment under

item 1, 2, 3 or 4 of the table in subsection (1) if the limited

amendment period for the original assessment concerned has

ended.

Note:

The Commissioner can amend amended assessments at any time

under item 5 or 6 of the table in subsection (1).

Refreshed amendment period for amending amended assessments

(3) If the Commissioner amends an assessment (the earlier

assessment) as set out in column 2 of the following table, he or she

may, under this subsection, amend the assessment (the later

assessment) that results from that amendment in the way set out in

column 3 within:

(a) if item 1, 2 or 3 of the table in subsection (1) applies to the

original assessment concerned (which may or may not be the

earlier assessment)--2 years after the day on which he or she

gives notice of the later assessment to the taxpayer; or

(b) otherwise--4 years after that day.

Schedule 1 Assessments

Part 1 Amending assessments

8 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Amendment of later assessment

Column 1

Item

Column 2

In this case:

Column 3

the position is:

The Commissioner amends the

earlier assessment about a

particular in a way that reduces a

taxpayer's liability and the

Commissioner accepts a statement

made by the taxpayer in making

the amendment

The Commissioner may amend

the later assessment about that

particular in a way that increases

the taxpayer's liability.

The Commissioner amends the

earlier assessment about a

particular in a way that:

(a) increases a taxpayer's liability;

(b) reduces a taxpayer's liability

(other than in a case covered by

item 1)

The Commissioner may amend

the later assessment about that

particular in a way that reduces

the taxpayer's liability.

Note 1:

The earlier assessment may be the original assessment or an amended

assessment.

Note 2:

The Commissioner can amend the later assessment at any time under

item 5 or 6 of the table in subsection (1).

Note 3:

The amendment period mentioned in paragraph (3)(a) or (b) may be

extended: see subsections (5) to (7).

(4) The Commissioner cannot amend an assessment under item 2 of

the table in subsection (3) about a particular if he or she has

previously amended an assessment under item 1 of that table about

that particular.

Extensions--applications by taxpayer

(5) The Commissioner may amend an assessment even though the

limited amendment period has ended if, before the end of that

period, the taxpayer applies for an amendment in the approved

form. The Commissioner may amend the assessment to give effect

to the decision on the application.

Extensions--giving effect to private rulings

(6) The Commissioner may amend an assessment even though the

limited amendment period has ended if:

Assessments Schedule 1

Amending assessments Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

(a) the taxpayer applies for a private ruling under Division 359

in Schedule 1 to the Taxation Administration Act 1953 before

the end of that period; and

(b) the Commissioner makes a private ruling under that Division

because of the application.

The Commissioner may amend the assessment to give effect to the

ruling.

Extensions--Federal Court orders or taxpayer consent

(7)

If:

(a) the Commissioner has started to examine the affairs of a

taxpayer in relation to an assessment; and

(b) the Commissioner has not completed the examination before

the end of the limited amendment period or that period as

extended;

the limited amendment period may be extended as follows:

Extensions of limited amendment period

In this case:

the position is:

1 The Commissioner, before the end of

the limited amendment period or that

period as extended, applies to the

Federal Court of Australia for an order

extending the limited amendment

period

The Court may order an extension of

the limited amendment period for a

specified period if it is satisfied that it

was not reasonably practicable, or it

was inappropriate, for the

Commissioner to complete the

examination within the limited

amendment period, or that period as

extended, because of:

(a) any action taken by the taxpayer; or

(b) any failure of the taxpayer to take

action that would have been

reasonable for the taxpayer to take.

2 The Commissioner, before the end of

the limited amendment period or that

period as extended, requests the

taxpayer to consent to extending the

limited amendment period

The taxpayer may, by notice in writing,

consent to extending the limited

amendment period for a specified

period.

(8) The limited amendment period for an assessment may be extended

more than once under subsection (7).

Note:

The following heading to subsection 170(9) is inserted "Other amendment periods".

Schedule 1 Assessments

Part 1 Amending assessments

10 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

2 Subsections 170(9A), (9E) and (9F)

Repeal the subsections.

3 Subsection 170(10)

Repeal the subsection, substitute:

(10) Nothing in this section prevents the amendment, at any time, of an

assessment for the purpose of giving effect to any of the provisions

of this Act set out in this table.

Amendment of assessments

Item Provision

Brief

description

Section 23AB

Income of certain persons serving with an

armed force under the control of the United

Nations

Section 23H

Exemption of certain film income

Section 26AG

Certain film proceeds included in assessable

income

Subsection 47(2B)

Distributions by liquidator

Section 51AD

Deductions not allowable in respect of

property used under certain leveraged

arrangements

Section 51AH

Deductions not allowable where expenses

incurred by employee are reimbursed

Subsection 57AM(10), (13),

(14), (15) or (16)

Special depreciation on trading ships

Subsection 59(2D)

Disposal, loss or destruction of depreciated

property

Subsection 77F(5)

Money paid before 1 July 1991 on shares in

management and investment companies

Section 78A

Certain gifts not to be allowable deductions

Section 78B

Promoters recoupment tax

Section 82KJ

Deduction not allowable in respect of

certain pre-paid outgoings

Section 82KK

Schemes designed to postpone tax liability

Section 82KL

Tax benefit not allowable in respect of

certain recouped expenditure

Subsection 82S(3)

Interest on certain convertible notes to be an

allowable deduction--where loan made

before 1 January 1976

Assessments Schedule 1

Amending assessments Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Amendment of assessments

Item Provision

Brief

description

Subsection 82SA(2)

Interest on certain convertible notes to be an

allowable deduction--where loan made on

or after 1 January 1976

17 Section

100A

Present

entitlement arising from

reimbursement agreement

Subdivision C of Division 6D

of Part III

Ultimate beneficiary non-disclosure tax on

share of net income

Section 105AA

Additional period for making sufficient

distribution

Section 105AB

Additional period for distribution by

liquidator

Section 121AT

Other tax consequences of demutualisation

Division 9C of Part III

Assessable income diverted under certain

tax avoidance schemes

Division 10BA of Part III

Australian films

Section 136AF

Consequential adjustments to assessable

income and allowable deductions

Division 16D of Part III

Certain arrangements relating to the use of

property

Subsection 159GZZZH(2)

Post-cancellation disposals of eligible

interests etc.

Section 160ABB

Rebate in respect of certain payments by the

Commonwealth Savings Bank of Australia

28 Section

271-105

Schedule 2F

Amounts subject to family trust distribution

tax not assessable

29 Schedule

Farm

management

deposits

4 Subsection 170(10AA) (table item 10)

Repeal the item.

5 Subsection 170(10AA) (after table item 20)

Insert:

22 Section 59-30

Repayment of amounts

6 Subsection 170(10AA) (table item 210)

Repeal the item.

Schedule 1 Assessments

Part 1 Amending assessments

12 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

7 Subsection 170(10AB)

Repeal the subsection.

8 Subsection 170(13)

Repeal the subsection.

9 Subsection 170(14)

Insert:

limited amendment period, for an assessment, means the period

within which the Commissioner may amend the assessment:

(a) under item 1, 2, 3 or 4 of the table in subsection (1); or

(b) under paragraph (3)(a) or (b).

Note:

The following heading to subsection 170(14) is inserted "Definitions".

10 Subsection 170(14)

Insert:

scheme has the meaning given by subsection 995-1(1) of the

Income Tax Assessment Act 1997.

11 Subsection 170(14)

Insert:

scheme benefit has the meaning given by section 284-150 in

Schedule 1 to the Taxation Administration Act 1953.

12 Subsection 170(14)

Insert:

STS taxpayer has the meaning given by section 328-435 of the

Income Tax Assessment Act 1997.

13 Subsection 170(14) (definition of tax)

Repeal the definition.

14 Section 170A

Repeal the section.

15 Application

Schedule 1 Assessments

Part 2 Nil assessments

14 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Part 2--Nil assessments

Income Tax Assessment Act 1936

16 Subsection 6(1) (definition of assessment)

Repeal the definition, substitute:

assessment means:

(a) the ascertainment of the amount of taxable income (or that

there is no taxable income) and of the tax payable on that

taxable income (or that no tax is payable); or

Note 1: A taxpayer does not have a taxable income if the taxpayer's

deductions equal or exceed the taxpayer's assessable income: see

subsection 4-15(1) of the Income Tax Assessment Act 1997.

Note 2: A taxpayer may have no tax payable on an amount of taxable

income if that income is below the tax-free threshold or if the

taxpayer's tax offsets reduce the taxpayer's basic income tax

liability to nil.

(b) for a taxpayer being the trustee of a unit trust that is a

corporate unit trust within the meaning of section 102J--the

ascertainment of the net income of the trust as defined by

section 102D (or that there is no net income) and of the tax

payable on that net income (or that no tax is payable); or

trading trust within the meaning of section 102R--the

ascertainment of the net income of the trust as defined by

section 102M (or that there is no net income) and of the tax

payable on that net income (or that no tax is payable); or

(d) for any other taxpayer that is the trustee of a trust estate but

excluding a taxpayer that is the trustee of a fund or unit trust

referred to in paragraph (a), (b) or (c) of the definition of

eligible entity in subsection 267(1)--the ascertainment of so

much of the net income of the trust estate as is net income in

respect of which the trustee is liable to pay tax (or that there

is no net income in respect of which the trustee is so liable)

and of the tax payable on that net income (or that no tax is

payable); or

(e) the ascertainment of the amount of interest payable under

section 102AAM (about distributions from non-resident trust

estates); or

Assessments Schedule 1

Nil assessments Part 2

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

(f) the ascertainment of an amount of additional tax under

section 128TE; or

(g) the ascertainment of an amount of tax under

section 159GZZZZH.

17 Section 175A

Before "A", insert "(1)".

18 At the end of section 175A

Add:

(2) A taxpayer cannot object under subsection (1) against an

assessment ascertaining that:

(a) the taxpayer has no taxable income; or

(b) the taxpayer has an amount of taxable income and no tax is

payable;

unless the taxpayer is seeking an increase in the taxpayer's

liability.

19 Application

The amendments made by this Part apply in relation to the 2004-05 year

of income and later years of income.

Schedule 1 Assessments

Part 3 Making assessments for the 2003-04 year of income or earlier

16 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Part 3--Making assessments for the 2003-04 year of

income or earlier

Income Tax Assessment Act 1936

20 After section 171

Insert:

171A Limited period to make assessments for nil liability returns for

the 2003-04 year of income or earlier

(1) If the circumstances set out in column 2 of the following table

apply to a taxpayer in relation to the 2003-04 year of income (a nil

year) or an earlier year of income (also a nil year), the

Commissioner cannot make an original assessment for that

taxpayer for that year in the circumstances set out in column 3:

Making assessments

Column 1

Item

Column 2

In this case:

Column 3

the position is:

The taxpayer's return of income for

a nil year disclosed, or the

Commissioner has given the

taxpayer a notice for a nil year that

stated, either of the following:

(a) the taxpayer had an amount of

taxable income, and that no tax

was payable;

(b) the taxpayer had no taxable

income because the taxpayer's

deductions equalled the

taxpayer's assessable income;

and the taxpayer did not deduct a

tax loss in the nil year

The Commissioner cannot make

an original assessment for the

taxpayer for the nil year after the

later of the following:

(a) 31 October 2008;

(b) the period of 4 years

beginning on the day on

which the taxpayer lodged the

taxpayer's return of income

for the nil year.

Assessments Schedule 1

Making assessments for the 2003-04 year of income or earlier Part 3

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Making assessments

Column 1

Item

Column 2

In this case:

Column 3

the position is:

The taxpayer's return of income for

a nil year disclosed, or the

Commissioner has given the

taxpayer a notice for a nil year that

stated, either of the following:

(a) the taxpayer had an amount of

taxable income, and that no tax

was payable;

(b) the taxpayer had no taxable

income because the taxpayer's

deductions equalled the

taxpayer's assessable income;

and the taxpayer did deduct a tax

loss in the nil year

The Commissioner cannot make

an original assessment for the

taxpayer for the nil year after the

period of 6 years beginning on

the later of the following:

(a) the day on which the taxpayer

lodged the taxpayer's return

of income for the 2004-05

year of income or, if the

taxpayer is a member of a

consolidated group at the end

of that year of income, the

day on which head

company's return of income

for that year of income is

lodged;

(b) the day on which the taxpayer

lodged the taxpayer's return

of income for the nil year.

The taxpayer had a tax loss in a nil

year, none of which has been

carried forward to the 2004-05 year

of income

The Commissioner cannot make

an original assessment for the

taxpayer for the nil year after the

period of 6 years beginning on

the later of the following:

(a) the day on which the taxpayer

lodged the taxpayer's return

of income for the 2004-05

year of income or, if the

taxpayer is a member of a

consolidated group at the end

of that year of income, the

day on which head

company's return of income

for that year of income is

lodged;

(b) the day on which the taxpayer

lodged the taxpayer's return

of income for the nil year.

Schedule 1 Assessments

Part 3 Making assessments for the 2003-04 year of income or earlier

18 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Making assessments

Column 1

Item

Column 2

In this case:

Column 3

the position is:

(a) the taxpayer had a tax loss in a

nil year, some or all of which

has been carried forward to the

2004-05 year of income; and

(b) the taxpayer or, if the taxpayer

is a member of a consolidated

group at the end of the 2004-05

year of income, the head

company notifies the

Commissioner, in the approved

form, that the taxpayer or the

head company had a tax loss in

the nil year

The Commissioner cannot make

an original assessment for the

taxpayer for the nil year after the

period of 6 years beginning on

the later of the following:

(a) the day on which the

Commissioner received the

notification;

(b) the day on which the taxpayer

lodged the taxpayer's return

of income for the nil year.

(2) Subsection (1) does not apply in relation to a nil year if:

(a) the Commissioner is of the opinion there has been fraud or

evasion; or

(b) had the Commissioner made an assessment, in accordance

with the taxpayer's return of income, that the taxpayer had no

taxable income or that no tax was payable by the taxpayer

(assuming that such an assessment could have been made)--

this Act would not have prevented the Commissioner

amending the assessment at any time.

Assessments Schedule 1

Consequential amendments Part 4

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Part 4--Consequential amendments

Division 1--SPOR taxpayer provisions

Income Tax Assessment Act 1936

21 Subsection 6(1) (definition of shorter period of review

taxpayer or SPOR taxpayer)

Repeal the definition.

22 Section 6AD

Repeal the section.

23 Subsection 251R(6D)

Omit "subsections (6F) and (6FA)", substitute "subsection (6F)".

24 Subsections 251R(6F) and (6FA)

Repeal the subsections, substitute:

(6F) Subsection (6D) does not apply, and is taken never to have applied,

if the first person fails to retain the family agreement until the end

of:

(a) 5 years beginning on the date of lodgment of the first

person's return of income for the year of income concerned;

(b) a shorter period determined by the Commissioner in writing

for the first person; or

legislative instrument for a class of persons that includes the

first person.

(6FA) A determination under paragraph (6F)(c) may specify different

periods for different classes of taxpayers.

25 Application

The amendments made by items 23 and 24 apply in relation to the

2004-05 year of income and later years of income.

Income Tax Assessment Act 1997

Schedule 1 Assessments

Part 4 Consequential amendments

20 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

26 Subsection 995-1(1) (definition of SPOR taxpayer)

Repeal the definition.

Taxation Administration Act 1953

27 Subsection 2(1) (definition of SPOR taxpayer)

Repeal the definition.

28 Paragraphs 14ZW(1)(aa) and (aaa)

Repeal the paragraphs, substitute:

(aa) if the taxation objection is made under section 175A of the

Income Tax Assessment Act 1936:

(i) if item 1, 2 or 3 of the table in subsection 170(1) of that

Act applies to the assessment concerned--2 years after

notice of the assessment is given to the person; or

(ii) otherwise--4 years after notice of the assessment

concerned is given to the person; or

(aaa) if the taxation objection is made under section 78A of the

Fringe Benefits Tax Assessment Act 1986 or section 160AL

of the Income Tax Assessment Act 1936--4 years after notice

of the taxation decision to which it relates has been given to

the person; or

29 Subsections 14ZW(1A) and (1AA)

Repeal the subsections, substitute:

(1A) The person cannot lodge a taxation objection against a private

ruling that relates to a year of income after the end of whichever of

the following ends last:

(a) 60 days after the ruling was made;

(b) whichever of the following is applicable:

(i) if item 1, 2 or 3 of the table in subsection 170(1) of the

Income Tax Assessment Act 1936 applies to the person's

assessment for that income year--2 years after the last

day allowed to the person for lodging a return in relation

to the person's income for that year of income;

(ii) otherwise--4 years after that day.

30 Paragraph 14ZW(1B)(b)

Assessments Schedule 1

Consequential amendments Part 4

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Omit "paragraph (1)(aa),", substitute "subparagraph (1)(aa)(ii) or

paragraph (1)(aaa),".

31 Paragraph 14ZW(1BA)(b)

Omit "paragraph (1)(aaa)", substitute "subparagraph (1)(aa)(i)".

32 Application

The amendments made by items 28 to 31 apply in relation to taxation

decisions made in:

(a) for income tax--the 2004-05 income year or a later income

year; or

(b) for fringe benefits tax--the year of tax starting on 1 April

2004 or a later year of tax.

33 Subsection 18-100(1) in Schedule 1

Repeal the subsection, substitute:

(1) An entity that is given a

payment summary and a copy of it in any

financial year under this Part must retain the copy for:

(a) 5 years after the end of that financial year; or

(b) a shorter period determined by the Commissioner in writing

for the entity; or

legislative instrument for a class of entities that includes the

entity.

(1AA) A determination under paragraph (1)(c) may specify different

periods for different classes of entities.

34 Subsection 18-100(2) in Schedule 1

Repeal the subsection.

35 Application

The amendments made by items 33 and 34 apply in relation to payment

summaries, and copies of payment summaries, given to entities in the

financial year beginning on 1 July 2004 and later financial years.

36 Subsection 388-65(3) in Schedule 1

Repeal the subsection, substitute:

(3) You must retain the declaration or a copy of it for:

Schedule 1 Assessments

Part 4 Consequential amendments

22 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

(a) 5 years after it is made; or

(b) a shorter period determined by the Commissioner in writing

for you; or

legislative instrument for a class of entities that includes you.

(3A) A determination under paragraph (1)(c) may specify different

periods for different classes of entities.

37 Application

The amendment made by item 36 applies to declarations made on or

after 1 April 2004.

Division 2--Nil assessment provisions

Income Tax Assessment Act 1936

38 Paragraphs 161AA(a) and (b)

Repeal the paragraphs, substitute:

(a) its taxable income or its net income for that year of income

(or that it has no taxable income or net income for that year);

and

(b) the amount of the tax payable on that taxable income or net

income (or that no tax is payable); and

39 Section 166

After "taxable income", insert "(or that there is no taxable income)".

40 Section 166

After "tax payable thereon", insert "(or that no tax is payable)".

41 Paragraph 166A(3)(c)

Repeal the paragraph, substitute:

taxable income or net income (or an assessment that there is

no taxable income or net income), and the tax payable on that

income (or that no tax is payable), in accordance with what

the taxpayer specified in the return;

42 Subsection 168(1)

Assessments Schedule 1

Consequential amendments Part 4

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

After "taxable income derived", insert "(or that there is no taxable

income)".

43 Subsection 168(1)

After "tax payable thereon", insert "(or that no tax is payable)".

44 Section 169

After "pay tax", insert "(including a nil liability)".

45 Section 169

After "such tax", insert "(or an assessment that no tax is payable)".

Taxation Administration Act 1953

46 Subsection 18-15(1) in Schedule 1

Repeal the subsection, substitute:

(1) A person is entitled to a credit equal to the total of the

amounts

withheld from

withholding payments made to the person during

an income year if an assessment has been made of the income tax

payable, or an assessment has been made that no income tax is

payable, by the person for the income year.

47 Paragraph 18-20(1)(c) in Schedule 1

Repeal the paragraph, substitute:

an assessment has been made that no income tax is payable,

by the person for the income year.

48 Paragraph 18-25(2)(c) in Schedule 1

Repeal the paragraph, substitute:

an assessment has been made that no income tax is payable,

by the beneficiary for the income year.

49 Paragraph 18-25(4)(a) in Schedule 1

Before "tax", insert "income".

50 Paragraph 18-25(4)(c) in Schedule 1

Repeal the paragraph, substitute:

Schedule 1 Assessments

Part 4 Consequential amendments

24 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

assessment has been made that no income tax is payable.

51 Paragraph 18-25(6)(a) in Schedule 1

Before "tax", insert "income".

52 Paragraph 18-25(6)(c) in Schedule 1

Repeal the paragraph, substitute:

assessment has been made that no income tax is payable.

53 Section 18-27 in Schedule 1

Repeal the section, substitute:

18-27 Tax credit for alienated personal services payments

A person is entitled to a credit equal to the total of the amounts

paid under Division 13 in respect of amounts included in the

person's assessable income for an income year under section 86-15

of the Income Tax Assessment Act 1997 if an assessment has been

made of the income tax payable, or an assessment has been made

that no income tax is payable, by the person for the income year.

54 Subsection 45-30(1) in Schedule 1

Repeal the subsection, substitute:

(1) You are entitled to a credit when the Commissioner makes an

assessment of the income tax you are liable to pay for an income

year or an assessment that no income tax is payable by you for an

income year.

55 Subsection 45-30(3) in Schedule 1

Omit "or determination".

56 Subsection 45-865(1) in Schedule 1

Repeal the subsection, substitute:

(1) When the Commissioner makes an assessment:

(a) of the income tax that the

head company of a

consolidated

group is liable to pay for a

consolidation transitional year for

the head company; or

Assessments Schedule 1

Consequential amendments Part 4

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

(b) that no income tax is payable by the head company for that

year;

the head company is, in addition to any credit to which it is entitled

under section 45-30 for that year, entitled to a credit in relation to

instalments payable by an entity that is a

subsidiary member of the

group at any time during that year.

Taxation (Interest on Overpayments and Early Payments) Act

1983

57 Subsections 8K(1) and (2)

Repeal the subsections.

58 Subsection 8K(3)

Omit "(3)".

59 Application

The amendments made by this Division apply in relation to the 2004-05

year of income and later years of income.

Division 3--Other provisions

Child Support (Assessment) Act 1989

60 Subsection 56(3)

Omit "subsection 170(2) (Amendment of assessments because of tax

avoidance) of the Income Tax Assessment Act 1936", substitute

"subsection 170(1) (amendment of assessments) of the Income Tax

Assessment Act 1936 to increase the person's taxable income".

61 Application

The amendment made by item 60 applies in relation to assessments for

the 2004-05 year of income and later years of income.

Income Tax Assessment Act 1936

62 Subsection 128TE(5)

Omit "170,".

63 Subsection 159GZZZZH(4)

Schedule 1 Assessments

Part 4 Consequential amendments

26 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Omit "170,".

64 Subsection 177G(1)

Repeal the subsection.

65 Subsection 177G(2)

Omit "(2)".

66 Paragraph 262A(4)(b)

Omit "paragraph 170(2)(b)", substitute "section 170".

67 Paragraph 262A(4)(b)

Omit "by virtue of an order of the Federal Court of Australia made

under subsection 170(4A) or the consent of the person given under

subsection 170(4B)", substitute "under subsection 170(7)".

68 Application

The amendments made by items 66 and 67 apply in relation to

assessments for the 2004-05 year of income and later years of income.

69 Paragraph 245-265(4)(b) in Schedule 2C

Omit "paragraph 170(2)(b)", substitute "section 170".

70 Paragraph 245-265(4)(b) in Schedule 2C

Omit "by an order of the Federal Court of Australia made under

subsection 170(4A) or by the consent of the person given under

subsection 170(4B)", substitute "under subsection 170(7)".

71 Paragraph 245-265(7)(b) in Schedule 2C

Omit "paragraph 170(2)(b)", substitute "section 170".

72 Paragraph 245-265(7)(b) in Schedule 2C

Omit "by an order of the Federal Court of Australia made under

subsection 170(4A) or by the consent of the company given under

subsection 170(4B)", substitute "under subsection 170(7)".

73 Application

The amendments made by items 69 to 72 apply in relation to

assessments for the 2004-05 year of income and later years of income.

Schedule 2 ATO advice

Part 1 Rulings

28 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Schedule 2--ATO advice

Part 1--Rulings

Taxation Administration Act 1953

1 Division 360 in Schedule 1

Repeal the Division, substitute:

Division 357--Object and common rules

Table of Subdivisions

Guide to Division 357

357-A Object of this Part

357-B Common rules for rulings

Guide to Division 357

357-1 What this Division is about

This Division sets out the object of this Part, and common rules

that apply to public, private and oral rulings. (For the rules specific

to each of those kinds of ruling, see Divisions 358, 359 and 360.)

A ruling is an expression of the Commissioner's opinion of the

way in which a relevant provision applies, or would apply, to you.

A ruling binds the Commissioner if it applies to you and you act in

accordance with it. If you do act in accordance with it and the law

turns out to be less favourable to you than the ruling provides, you

are protected by the ruling from any adverse consequences.

The Division also sets out some other general rules for rulings.

Subdivision 357-A--Object of this Part

Table of sections

357-5

Object of this Part

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

357-5 Object of this Part

(1) The object of this Part is to provide a way for you to find out the

Commissioner's view about how certain laws administered by the

Commissioner apply to you so that the risks to you of uncertainty

when you are self assessing or working out your tax obligations or

entitlements are reduced.

(2) This object is achieved by:

(a) making advice in the form of rulings by the Commissioner

available on a wide range of matters and to many taxpayers;

and

(b) ensuring that the Commissioner provides rulings in a timely

manner; and

on, relevant information; and

(d) protecting you from increases in tax and from penalties and

interest where you rely on rulings; and

(e) protecting you from decreases in entitlements where you rely

on rulings; and

(f) limiting the ways the Commissioner can alter rulings to your

detriment; and

(g) giving you protection from interest charges where you rely

on other advice from the Commissioner, or on the

Commissioner's general administrative practice.

Subdivision 357-B--Common rules for rulings

Table of sections

Rules for all rulings

357-50

Scope of Division

357-55

The provisions that are relevant for rulings

357-60

When rulings are binding on the Commissioner

357-65

Stopping relying on a ruling

357-70

Commissioner may apply the law if more favourable than the ruling

357-75 Inconsistent

rulings

357-80

Contracts for schemes

357-85

Effect on ruling if relevant provision re-enacted

357-90

Validity of ruling not affected by formal defect

Common rules for public and private rulings

Schedule 2 ATO advice

Part 1 Rulings

30 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

357-95 Electronic

communications

357-100 Evidence

Common rules for private and oral rulings

357-105 Further information must be sought

357-110 Assumptions in making private or oral ruling

357-115 Additional information provided by applicant

357-120 Commissioner may take into account information from third parties

357-125 Applications and objections not to affect obligations and powers

Rules for all rulings

357-50 Scope of Division

This Division applies to

public rulings,

private rulings and

oral

rulings.

357-55 The provisions that are relevant for rulings

Provisions of Acts and regulations of which the Commissioner has

the general administration are relevant for rulings if the provisions

are about any of the following:

(a)

tax;

(b)

Medicare

levy;

(d)

franking tax;

(e)

withholding tax;

(f)

mining withholding tax;

(g) the administration or collection of those taxes;

(h) a grant or benefit mentioned in section 8 of the Product

Grants and Benefits Administration Act 2000, or the

administration or payment of such a grant or benefit.

357-60 When rulings are binding on the Commissioner

(1) A ruling binds the Commissioner in relation to you (whether or not

you are aware of the ruling) if:

(a) the ruling applies to you; and

(b) you rely on the ruling by acting (or omitting to act) in

accordance with the ruling.

Example 1: A public ruling is expressed to apply to a class of entities in relation to

a particular scheme. Tim is a member of that class of entities and he is

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

one of a number of taxpayers who enter into that scheme. The ruling

applies to Tim.

Tim relies on the ruling by lodging an income tax return that is in

accordance with the ruling.

Under the ruling, Tim's deductions in relation to the scheme are

worked out to be a particular amount. Because Tim has relied on the

ruling, the Commissioner must use that amount in making Tim's

assessment (unless Tim stops relying on the ruling or the law is more

favourable to him: see sections 357-65 and 357-70).

Example 2: Cecelia applies for, and obtains, a private ruling that, when she makes

a payment in specified circumstances, she would not have to withhold

an amount under a relevant provision. Cecelia makes the payment in

the circumstances specified in the ruling, so the ruling applies to her.

Cecelia relies on the ruling by not withholding an amount from the

payment. The Commissioner must not apply the provision in relation

to Cecelia in a way that is inconsistent with the ruling (unless Cecelia

stops relying on the ruling or the law is more favourable to her: see

sections 357-65 and 357-70).

Note 1:

A ruling about the amount of tax payable that binds the Commissioner

provides protection in relation to that amount. There is no shortfall

interest charge or tax shortfall penalty payable in respect of that

amount as there can be no shortfall in tax payable.

Note 2:

A ruling about the operation of a provision would stop applying to you

if the provision is repealed, or is amended to have a different effect.

However, if the provision is re-enacted and expresses the same ideas

as the old provision, the ruling would still apply: see section 357-85.

(2) You may rely on the ruling at any time unless prevented from

doing so by a time limit imposed by a

taxation law. It is not

necessary to do so at the first opportunity.

357-65 Stopping relying on a ruling

(1) You can stop relying on a ruling. You do this by acting (or

omitting to act) in a way that is not in accordance with the ruling.

Note:

There is no penalty for a shortfall resulting from failing to follow a

ruling. However, there are penalties for shortfalls resulting from

failing to take reasonable care, and from taking a position about a

large income tax item that is not reasonably arguable: see

Division 284.

(2) You may stop relying on a ruling at any time unless prevented

from doing so by a time limit imposed by a

taxation law.

(3) Having stopped relying on a ruling, you may rely on the ruling

again unless prevented from doing so by a time limit imposed by a

taxation law.

Schedule 2 ATO advice

Part 1 Rulings

32 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

357-70 Commissioner may apply the law if more favourable than the

ruling

(1) The Commissioner may apply a relevant provision to you in the

way it would apply if you had not relied on a ruling if:

(a) doing so would produce a more favourable result for you;

and

(b) the Commissioner is not prevented from doing so by a time

limit imposed by a

taxation law.

(2) The Commissioner does not have a duty to consider whether to

apply subsection (1) to you, whether he or she is requested to do so

by you or by any other entity.

357-75 Inconsistent rulings

(1) The rules in this table have effect if:

(a) a ruling and a later ruling both apply to you; and

(b) the 2 rulings are inconsistent.

However, the rules in the table only apply to the extent of the

inconsistency.

Inconsistent rulings

Item If the earlier

ruling is:

And the later

inconsistent

ruling is:

The result is:

public ruling

Any ruling

You may rely on either ruling.

private ruling

or an

oral ruling

A private ruling

or an oral ruling

If you informed the Commissioner

about the existence of the earlier

ruling when you applied for the

later ruling, the earlier ruling is

taken not to have been made.

Otherwise, the later ruling is taken

not to have been made.

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Inconsistent rulings

Item If the earlier

ruling is:

And the later

inconsistent

ruling is:

The result is:

private ruling

or an

oral ruling

public ruling

The earlier ruling is taken not to

have been made if, when the later

ruling is made:

(a) the income year or other period

to which the rulings relate has

not begun; and

(b) the

scheme to which the rulings

relate has not begun to be

carried out.

Otherwise, you may rely on either

ruling.

(2) If 3 or more rulings apply to you and the rulings are inconsistent,

apply the rules in the table to each combination of 2 rulings in the

order in which they were made.

357-80 Contracts for schemes

For the purposes of this Part, if a contract requiring a

scheme has

been entered into, the scheme is taken to have begun to be carried

out.

357-85 Effect on ruling if relevant provision re-enacted

If:

(a) the Commissioner makes a ruling about a relevant provision

(the old provision); and

(b) that provision is re-enacted or remade (with or without

modifications, and whether or not the old provision is

repealed);

the ruling is taken also to be a ruling about that provision as

re-enacted or remade (the new provision), but only so far as the

new provision expresses the same ideas as the old provision.

Note 1:

Section 357-55 specifies the relevant provisions.

Note 2:

Ideas in taxation provisions are not necessarily different just because

different forms of words are used: see section 15AC of the Acts

Interpretation Act 1901 and section 1-3 of the Income Tax Assessment

Act 1997.

Schedule 2 ATO advice

Part 1 Rulings

34 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

357-90 Validity of ruling not affected by formal defect

The validity of a ruling is not affected merely because a provision

of this Part relating to the form of the ruling or the procedure for

making it has not been complied with.

Common rules for public and private rulings

357-95 Electronic communications

A communication between the Commissioner and another entity

made for the purposes of a

public ruling or

private ruling may be

made electronically.

357-100 Evidence

The production of:

(a)

public ruling or

private ruling; or

(b) a document signed by the Commissioner, a Second

Commissioner or a Deputy Commissioner, purporting to be a

copy of the ruling or of a notice of withdrawal of a public

ruling;

is conclusive evidence of the proper making of the ruling, or of the

withdrawal of the public ruling.

Common rules for private and oral rulings

357-105 Further information must be sought

(1) If the Commissioner considers that further information is required

to make a

private ruling or an

oral ruling, the Commissioner must

request the applicant to give that information to him or her.

Note:

The Commissioner should make a private ruling within 60 days.

However, if the Commissioner requests further information under this

section, that period is extended: see subsection 359-50(2).

(2) The Commissioner may decline to make the ruling if the applicant

does not give the information to the Commissioner within a

reasonable time.

Note:

The Commissioner must give the applicant written reasons for

declining to make a private ruling: see section 359-35.

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

357-110 Assumptions in making private or oral ruling

(1) If the Commissioner considers that the correctness of a

private

ruling or an

oral ruling would depend on which assumptions were

made about a future event or other matter, the Commissioner may:

(a) decline to make the ruling; or

(b) make such of the assumptions as the Commissioner considers

to be most appropriate.

(2) Before making the ruling, the Commissioner must:

(a) tell the applicant which assumptions (if any) the

Commissioner proposes to make; and

(b) give the applicant a reasonable opportunity to respond.

Note:

The Commissioner should make a private ruling within 60 days.

However, if the Commissioner tells the applicant about assumptions

the Commissioner proposes to make under this section, that period is

extended: see subsection 359-50(2).

357-115 Additional information provided by applicant

In considering an application for a

private ruling or an

oral

ruling, the Commissioner may take into account additional

information provided by the applicant after the application was

made (whether in response to a request under section 357-105 or

otherwise).

357-120 Commissioner may take into account information from

third parties

In making a

private ruling or an

oral ruling, the Commissioner

may take into account any relevant information provided by an

entity other than the applicant (whenever it was provided) if the

Commissioner:

(a) tells the applicant what that information is and that the

Commissioner intends to take the information into account;

and

(b) gives the applicant a reasonable opportunity to respond

before making the ruling.

Note:

The Commissioner should make a private ruling within 60 days.

However, if the Commissioner tells the applicant about third party

information under this section, that period is extended: see subsection

359-50(2).

Schedule 2 ATO advice

Part 1 Rulings

36 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

357-125 Applications and objections not to affect obligations and

powers

The fact that you have applied for a

private ruling or an

oral

ruling, or have made an objection against a private ruling, does not

affect:

(a) your obligation to lodge a return or do anything else; or

(b) the Commissioner's power to make or amend an assessment

or do anything else.

Division 358--Public rulings

Guide to Division 358

358-1 What this Division is about

A public ruling is an expression of the Commissioner's opinion of

the way in which a relevant provision applies, or would apply, to

entities generally or a class of entities.

The Commissioner must publish the ruling.

A public ruling may be withdrawn.

Note:

Division 357 has some rules that relate to rulings generally.

Table of sections

Making public rulings

358-5

What is a public ruling?

358-10

Application of public rulings

358-15

When a public ruling ceases to apply

Withdrawing public rulings

358-20

Withdrawing public rulings

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Making public rulings

358-5 What is a public ruling?

(1) The Commissioner may make a written ruling on the way in which

the Commissioner considers a relevant provision applies or would

apply to:

(a)

entities generally or a class of entities; or

(b)

entities generally, or a class of entities, in relation to a class

schemes; or

(c)

entities generally, or a class of entities, in relation to a

particular scheme.

Note:

Section 357-55 specifies the relevant provisions.

(2) Such a ruling may cover any matter involved in the application of

the provision.

(3) Such a ruling is a public ruling if it:

(a)

published;

and

(b) states that it is a public ruling.

(4) The Commissioner must publish notice of the making of a

public

ruling in the Gazette.

Note:

The validity of a ruling is not affected merely because a provision of

this Part relating to the form of the ruling or the procedure for making

it has not been complied with: see section 357-90.

358-10 Application of public rulings

(1)

public ruling applies from the time it is published or from such

earlier or later time as is specified in the ruling.

(2)

public ruling that relates to a

scheme does not apply to you if

the scheme has begun to be carried out when the ruling is

published and:

(a) the ruling changes the Commissioner's general

administrative practice; and

(b) the ruling is less favourable to you than the practice.

358-15 When a public ruling ceases to apply

(1)

public ruling may specify the time at which it ceases to apply.

Schedule 2 ATO advice

Part 1 Rulings

38 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

(2)

public ruling does not do this, it applies until it is withdrawn.

Withdrawing public rulings

358-20 Withdrawing public rulings

(1) The Commissioner may withdraw a

public ruling, either wholly or

to an extent, by publishing notice of the withdrawal.

(2) The withdrawal takes effect from the time specified in the notice.

That time must not be before the time the notice is published.

(3) To the extent that a

public ruling is withdrawn, it continues to

apply to

schemes to which it applied that had begun to be carried

out before the withdrawal but does not apply to schemes that begin

to be carried out after the withdrawal.

Note:

A scheme is taken to have begun to be carried out if a contract

requiring the scheme has been entered into: see section 357-80.

(4) The Commissioner must publish notice of the withdrawal of a

public ruling in the Gazette.

Division 359--Private rulings

Guide to Division 359

359-1 What this Division is about

A private ruling is an expression of the Commissioner's opinion of

the way in which a relevant provision applies, or would apply, to

you in relation to a specified scheme. Private rulings are usually

made on application by you, your agent or your legal personal

representative.

The Commissioner must make the ruling applied for, except in

certain cases. If you are entitled to receive a ruling, you can object

if the Commissioner takes too long to make it.

The Commissioner must record the ruling in writing and give a

copy of it to you. The ruling must include certain details.

If you are dissatisfied with the ruling, you may object to it.

Note:

Division 357 has some common rules that affect private rulings.

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Table of sections

Private rulings

359-5 Private

rulings

359-10

Applying for a private ruling

359-15

Private rulings to be given to applicants

359-20 Private

rulings

must

contain certain details

359-25

Time of application of private rulings

359-30

Ruling for trustee of a trust

359-35

Dealing with applications

359-40 Valuations

359-45 Related

rulings

359-50

Delays in making private rulings

359-55 Revised

private

rulings

359-60

Objections, reviews and appeals relating to private rulings

359-65

Commissioner may consider new information on objection

359-70

Successful objection decision alters ruling

Private rulings

359-5 Private rulings

(1) The Commissioner may, on application, make a written ruling on

the way in which the Commissioner considers a relevant provision

applies or would apply to you in relation to a specified

scheme.

Such a ruling is called a private ruling.

Note:

Section 357-55 specifies the relevant provisions.

(2)

private ruling may cover any matter involved in the application

of the provision.

359-10 Applying for a private ruling

(1)

You,

your

agent or your

legal personal representative may apply

to the Commissioner for a

private ruling.

(2) An application for a

private ruling must be made in the

approved

form.

(3)

You,

your

agent or your

legal personal representative may

withdraw the application at any time before the ruling is made. The

Commissioner must confirm the withdrawal in writing.

Schedule 2 ATO advice

Part 1 Rulings

40 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

359-15 Private rulings to be given to applicants

The Commissioner makes a

private ruling by recording the ruling

in writing and giving a copy of it to the applicant. The copy may be

given electronically.

359-20 Private rulings must contain certain details

(1)

private ruling must state that it is a private ruling.

(2)

private ruling must identify the entity to whom it applies and

specify the relevant

scheme and the relevant provision to which it

relates.

Note 1:

The Commissioner must tell the applicant which assumptions the

Commissioner made in making the ruling: see section 357-110.

Note 2:

Section 357-55 specifies the relevant provisions.

359-25 Time of application of private rulings

(1)

private ruling may specify the time from which it begins to

apply and the time at which it ceases to apply.

(2) The specified start time, or end time, may be before, when, or after

the

private ruling is made and may be determined by reference to

a specified event.

(3)

private ruling that does not specify a start time applies from the

time when it is made.

(4)

private ruling that does not specify an end time ceases to apply

at the end of the income year or other accounting period in which it

started to apply.

359-30 Ruling for trustee of a trust

private ruling given to or for the trustee of a trust and relating to

the affairs of the trust also applies to:

(a) the beneficiaries of the trust; and

(b) another trustee who is appointed to replace a trustee.

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

359-35 Dealing with applications

(1) The Commissioner must comply with an application for a

private

ruling and make the ruling. However, this obligation is subject to

subsections (2) and (3).

(2) The Commissioner may decline to make a

private ruling if:

(a) the Commissioner considers that making the ruling would

prejudice or unduly restrict the administration of a

taxation

law; or

(b) the matter sought to be ruled on is already being, or has been,

considered by the Commissioner for you.

(3) The Commissioner may also decline to make a

private ruling if

the matter sought to be ruled on is how the Commissioner would

exercise a power under a relevant provision and the Commissioner

has decided or decides whether or not to exercise the power.

Example: Michael applies for a private ruling on the way in which the

Commissioner might exercise the Commissioner's discretion under

section 255-10 (deferring the payment time). Rather than make the

ruling, the Commissioner decides to defer the time at which an

amount would otherwise be payable by Michael.

Note:

The Commissioner may also decline to make a private ruling if:

(a)

the Commissioner has requested the applicant to give further

information under section 357-105 and the applicant has not

given it to the Commissioner within a reasonable time; or

(b)

the Commissioner considers that the correctness of a private

ruling would depend on which assumptions were made about a

future event or other matter (see section 357-110).

(4) The Commissioner must give the applicant written reasons for

declining to make a

private ruling.

359-40 Valuations

(1)

making

private ruling would require determining the value of

any thing, the Commissioner may:

(a) refer the valuation to a valuer; or

(b) refer a valuation provided by the applicant to a valuer for

review.

Note:

The Commissioner may request further information: see

section 357-105.

(2) If the Commissioner refers the valuation to a valuer, the

Commissioner must tell the applicant that he or she has done so.

Schedule 2 ATO advice

Part 1 Rulings

42 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

(3) When the valuer has completed its work in relation to the

valuation, the Commissioner must tell the applicant that it has done

so.

Note:

The Commissioner should make a private ruling within 60 days.

However, if the Commissioner refers a valuation to a valuer under this

section, that period is extended: see subsection 359-50(2).

(4) The Commissioner may charge the applicant an amount in

accordance with the regulations for the valuer making or reviewing

the valuation.

(5) This section does not apply to a valuation of a gift or contribution

for the purposes of Division 30 of the Income Tax Assessment Act

1997.

359-45 Related rulings

If the Commissioner is making a

private ruling (the first ruling)

you sought on the way in which, in the Commissioner's opinion, a

relevant provision applies or would apply to you, the

Commissioner may:

(a) make the first ruling a ruling on the way in which another

relevant provision applies or would apply to you; or

(b) make an additional private ruling on the way in which:

(i) another relevant provision applies or would apply; or

(ii) a relevant provision applies or would apply to you in

relation to a

scheme related to the scheme to which the

first ruling applies.

Note:

Section 357-55 specifies the relevant provisions.

359-50 Delays in making private rulings

(1) The applicant for a

private ruling may give the Commissioner a

written notice requiring him or her to make the ruling if, at the end

of 60 days after the application was made, the Commissioner has

neither:

(a) made the ruling; nor

(b) told the applicant that the Commissioner has declined to

make the ruling.

(2) The 60 day period mentioned in subsection (1) is extended in a

circumstance applicable under the table by the extension period

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

applicable to that circumstance. If 2 or more circumstances are

applicable, ignore any overlap between the periods of extension.

Extending the 60 day period

Item If the Commissioner, during

the 60 day period:

The 60 day period is extended by the

number of days in this period:

1 requests

further

information

under section 357-105

the period starting on the day the

information was requested and ending on

the day it is received by the Commissioner

tells the applicant about

assumptions the

Commissioner proposes to

make under section 357-110

the period starting on the day the

Commissioner tells the applicant and ending

on the day on which the Commissioner

receives the applicant's response about the

assumptions

tells the applicant about

information provided by a

third party that the

Commissioner proposes to

take into account under

section 357-120

the period starting on the day the

Commissioner tells the applicant and ending

on the day on which the Commissioner

receives the applicant's response about the

information

refers a valuation to a valuer

under section 359-40

the period starting on the day the

Commissioner tells the applicant about the

referral and ending on the day on which the

Commissioner tells the applicant that the

valuer has completed its work in relation to

the valuation

(3) The applicant may object, in the manner set out in Part IVC,

against the Commissioner's failure to make the ruling if the

Commissioner:

(a) does not make the ruling within 30 days of the notice under

subsection (1) being given; and

(b) has not otherwise declined to make the ruling by the end of

that period.

(4) The applicant must lodge with the objection a draft

private ruling.

359-55 Revised private rulings

(1) The Commissioner may make a revised

private ruling that applies

to you if:

(a) the Commissioner had previously made a private ruling that

applies to you; and

Schedule 2 ATO advice

Part 1 Rulings

44 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

(b) when the Commissioner makes the revised private ruling:

(i)

the

scheme to which the earlier ruling relates has not

begun to be carried out; and

(ii) if the earlier ruling relates to an income year or other

accounting period--that year or period has not begun.

Note:

Your private ruling may be affected by a later inconsistent public

ruling: see section 357-75.

(2) The Commissioner must give you a copy of the revised

private

ruling. The copy may be given electronically.

(3) The Commissioner may make the revised

private ruling in the

circumstances mentioned in paragraph (1)(b) whether or not there

is an application for the revised ruling.

(4) When the revised

private ruling is made, the ruling in its initial

form stops applying to you.

359-60 Objections, reviews and appeals relating to private rulings

(1) You may object against a

private ruling that applies to you in the

manner set out in Part IVC if you are dissatisfied with it.

(2) The ruling is taken to be a taxation decision (within the meaning of

that Part).

(3) However, you cannot object against a

private ruling if:

(a) there is an assessment for you for the income year or other

accounting period to which the ruling relates; or

(b) the ruling relates to

withholding tax or

mining withholding

tax that has become due and payable.

359-65 Commissioner may consider new information on objection

(1) In deciding whether to allow (wholly or in part), or to disallow, an

objection under Part IVC against a

private ruling, the

Commissioner may consider any additional information that the

Commissioner did not consider when making the ruling.

(2) For information you do not have, the Commissioner must tell you

what the information is and give you a reasonable opportunity to

respond before allowing or disallowing the objection.

(3) However, if the Commissioner considers that the additional

information is such that the

scheme to which the application

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

related is materially different from the scheme to which the ruling

relates:

(a) the Commissioner must request the applicant to make an

application for another

private ruling; and

(b) the objection is taken not to have been made.

359-70 Successful objection decision alters ruling

private ruling has effect as altered by an objection decision

(within the meaning of Part IVC) made by the Commissioner if:

(a) the Commissioner made the decision allowing, wholly or in

part, a taxation objection (within the meaning of that Part)

against the ruling; and

(b) the period in which an appeal against, or an application for

the review of, the decision may be made has ended without

such an appeal or application being made.

Note:

See sections 14ZZC and 14ZZN for the time limits.

Division 360--Oral rulings

Guide to Division 360

360-1 What this Division is about

An oral ruling is an expression of the Commissioner's opinion of

the way in which a relevant provision applies, or would apply, to

you. Oral rulings are given on oral application by you or your legal

personal representative.

Oral rulings can only be given for individuals.

The Commissioner must give the ruling unless he or she considers

that the advice you are seeking relates to a business matter or a

complex matter.

The Commissioner must give the ruling orally and must give you a

registration identifier for the ruling.

Note:

Division 357 has some common rules that affect oral rulings.

Table of sections

Schedule 2 ATO advice

Part 1 Rulings

46 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

Oral rulings

360-5

Applying for and making of oral rulings

360-10

Withdrawing an application for an oral ruling

360-15 Commissioner

determinations

Oral rulings

360-5 Applying for and making of oral rulings

(1) If you are an individual, you or your

legal personal representative

may apply to the Commissioner for advice on the way in which the

Commissioner considers a relevant provision applies or would

apply to you in relation to a specified

scheme.

Note:

Section 357-55 specifies the relevant provisions.

(2) An application under this section must be made orally and in the

manner determined under section 360-15.

(3) The Commissioner must give you or your

legal personal

representative that advice unless:

(a) the Commissioner considers that the advice sought relates to

business matter or a complex matter; or

(b) the matter sought to be ruled on is already being, or has been,

considered by the Commissioner for you.

That advice is an oral ruling.

Note:

The Commissioner may also decline to make an oral ruling if:

(a)

the Commissioner has requested you to give further information

under section 357-105 and you have not given it to the

Commissioner; or

(b)

the Commissioner considers that the correctness of an oral ruling

would depend on which assumptions were made about a future

event or other matter (see section 357-110).

(4) The Commissioner must give that advice orally and in the manner

determined under section 360-15. That advice must include a

registration identifier for the ruling.

Note:

The Commissioner must tell you which assumptions the

Commissioner made in making the ruling: see section 357-110.

(5) You are not entitled to receive a written record of that advice.

Note:

However, you may be able to apply for a private ruling on the matter

under Division 359.

ATO advice Schedule 2

Rulings Part 1

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

360-10 Withdrawing an application for an oral ruling

(1)

You

your

legal personal representative may withdraw an

application under section 360-5 before the Commissioner makes

the

oral ruling.

(2) The withdrawal must be done orally and in the manner determined

under section 360-15.

360-15 Commissioner determinations

The Commissioner must, by writing, determine:

(a) the manner in which oral applications are to be made under

section 360-5 or are to be withdrawn; and

(b) the manner in which the Commissioner is to give oral advice

under that section.

Division 361--Non-ruling advice and general

administrative practice

Table of sections

361-5

Non-ruling advice and general administrative practice

361-5 Non-ruling advice and general administrative practice

(1) You are not liable to pay the

general interest charge or the

shortfall interest charge under a relevant provision to the extent

that the charge would relate to a

shortfall amount or a

scheme

shortfall amount that was caused by:

(a) you reasonably relying in good faith on:

(i) advice (other than a ruling) given to you or your

agent

by the Commissioner; or

(ii) a statement in a publication approved in writing by the

Commissioner;

unless the advice, or the statement or publication, is labelled

as non-binding; or

(b) you reasonably relying in good faith on the Commissioner's

general administrative practice.

Note 1:

Section 357-55 specifies the relevant provisions.

Note 2:

Section 284-215 also provides protection from administrative

penalties for similar reliance on advice, statements or general

administrative practice.

ATO advice Schedule 2

Consequential amendments Part 2

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Part 2--Consequential amendments

Fringe Benefits Tax Assessment Act 1986

2 Sections 74A to 74F

Repeal the sections.

Higher Education Support Act 2003

3 Clause 1 of Schedule 1 (definition of income tax law)

Omit "section 14ZAAA of the Taxation Administration Act 1953",

substitute "subsection 995-1(1) of the Income Tax Assessment Act

1997".

Income Tax Assessment Act 1936

4 Paragraph 169A(2)(b)

Omit "Part IVAA of", substitute "Division 359 in Schedule 1 to".

5 Sections 170BA to 170BI

Repeal the sections.

Income Tax Assessment Act 1997

6 Subsection 1-3(2) (note)

Omit "sections 14ZAAM and 14ZAXA of", substitute "section 357-85

in Schedule 1 to".

7 Subsection 995-1(1) (definition of Commissioner

assessment)

Repeal the definition.

8 Subsection 995-1(1) (definition of fringe benefits tax law)

Repeal the definition, substitute:

fringe benefits tax law means a provision of an Act or regulations

under which the extent of liability for tax imposed by the Fringe

Benefits Tax Act 1986 is worked out.

Schedule 2 ATO advice

Part 2 Consequential amendments

50 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

9 Subsection 995-1(1) (definition of income tax law)

Repeal the definition, substitute:

income tax law means a provision of an Act or regulations under

which is worked out the extent of liability for:

(a)

tax; or

(b) Medicare levy; or

(c)

franking tax; or

(d)

withholding tax; or

(e)

mining withholding tax.

10 Subsection 995-1(1) (definition of oral ruling)

Repeal the definition, substitute:

oral ruling has the meaning given by section 360-5 in Schedule 1

to the Taxation Administration Act 1953.

11 Subsection 995-1(1) (definition of oral ruling arrangement)

Repeal the definition.

12 Subsection 995-1(1) (definition of private ruling)

Omit "14ZAA of", substitute "359-5 in Schedule 1 to".

13 Subsection 995-1(1)

Insert:

public ruling has the meaning given by section 358-5 in

Schedule 1 to the Taxation Administration Act 1953.

14 Subsection 995-1(1) (definition of self assessment)

Repeal the definition, substitute:

self assessment means an assessment:

(a) for the making of which the Commissioner wholly accepts

statements of the taxpayer; or

(b) that, under section 166A of the Income Tax Assessment Act

1936 or a provision of another law, is taken to have been

made by the Commissioner.

Product Grants and Benefits Administration Act 2000

ATO advice Schedule 2

Consequential amendments Part 2

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

15 Part 4A

Repeal the Part.

Taxation Administration Act 1953

16 Parts IVAAA and IVAA

Repeal the Parts.

17 Subsection 14ZL(1)

After "or decision", insert ", or with a failure to make a private ruling,".

18 Section 14ZQ (definition of private ruling)

Omit "14ZAA", substitute "Division 359 in Schedule 1".

19 At the end of section 14ZU

Add:

Note:

A person who objects against the Commissioner's failure to make a

private ruling must lodge a draft private ruling with the objection: see

subsection 359-50(4).

20 After paragraph 14ZW(1)(b)

Insert:

(ba) if the taxation objection is an objection under subsection

359-50(3) in Schedule 1 against the Commissioner's failure

to make a private ruling--60 days after the end of the period

of 30 days referred to in that subsection; or

21 Subsection 14ZY(1)

Omit "If", substitute "Subject to subsection (1A), if".

22 After subsection 14ZY(1)

Insert:

(1A) If the taxation objection is an objection under subsection 359-50(3)

in Schedule 1 against the Commissioner's failure to make a private

ruling, the Commissioner must:

(a) make a private ruling in the same terms as the draft ruling

lodged with the objection; or

(b) make a different private ruling.

Schedule 2 ATO advice

Part 2 Consequential amendments

52 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

23 Subsection 14ZYA(1)

After "taxation objection" (first occurring), insert "(other than one

under subsection 359-50(3) in Schedule 1)".

24 After section 14ZYA

Insert:

14ZYB Requiring Commissioner to make a private ruling

(1) This section applies if the taxation objection is an objection under

subsection 359-50(3) in Schedule 1 against the Commissioner's

failure to make a private ruling and the Commissioner has not

made an objection decision by the end of 60 days after the later of

these days:

(a) the day on which the taxation objection was lodged with the

Commissioner;

(b) if the Commissioner decides under section 14ZX to agree to

a request in relation to the taxation objection--the day on

which the decision was made.

(2) The Commissioner is taken, at the end of that 60 day period, to

have disallowed the objection.

25 Subsection 14ZZ(1)

After "objection decision" (first occurring), insert "(including a decision

under paragraph 14ZY(1A)(b) to make a different private ruling)".

26 Sections 15AA and 15AB

Repeal the sections.

27 Paragraph 284-15(3)(d) in Schedule 1

Repeal the paragraph, substitute:

(d)

public ruling.

ATO advice Schedule 2

Transitional Part 3

Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. , 2005

Part 3--Transitional

28 Definition of commencement day

In this Part:

commencement day means the later of:

(a) the day on which this Act receives the Royal Assent; and

(b) 1 January 2006.

29 Status of existing rulings

(1)

A public ruling in force immediately before the commencement day

under Part IVAAA of the Taxation Administration Act 1953 has effect,

on and after that day, as if it were a public ruling made under

Division 358 in Schedule 1 to that Act as amended by this Act.

(2)

A private ruling in force immediately before the commencement day

under Part IVAA of the Taxation Administration Act 1953 has effect, on

and after that day, as if it were a private ruling made under Division 359

in Schedule 1 to that Act as amended by this Act.

(3)

An oral ruling in force immediately before the commencement day

under Division 360 in Schedule 1 to the Taxation Administration Act

1953 has effect, on and after that day, as if it were an oral ruling made

under Division 360 in Schedule 1 to that Act as amended by this Act.

(4)

A ruling to which this item applies is taken to have been made on the

day on which it was originally made.

30 Inconsistent rulings

(1)

The rules in the table in subsection 357-75(1) in Schedule 1 to the

Taxation Administration Act 1953 do not apply to work out the effect of

2 inconsistent rulings if both of them were originally made before the

commencement day.

(2)

Instead, the inconsistency rules that existed immediately before the

commencement day are to be applied.

Note:

See former sections 170BC to 170BDC of the Income Tax Assessment

Act 1936 for the old inconsistency rules.

31 Pending applications

Schedule 2 ATO advice

Part 3 Transitional

54 Tax Laws Amendment (Improvements to Self Assessment) Bill (No. 2) 2005 No. ,

2005

(1)

An application for a private ruling or an oral ruling under the Taxation

Administration Act 1953 made before the commencement day and not

decided before that day has effect on and after that day as if it were an

application for a private ruling under Division 359, or for an oral ruling

under Division 360, in Schedule 1 to that Act as amended by this Act.

(2)

The application is taken to have been made on the day on which it was

originally made.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (IMPROVEMENTS TO SELF ASSESSMENT) BILL (NO. 2) 2005