myIR, payments and more
Questions we've been asked: General issues
Sections 91EB and 91FB, Tax Administration Act 1994 - Application of a private ruling and product ruling, respectively
We have received a number of enquiries asking if taxpayers who know of the existence of a private or product binding ruling, and consider their circumstances are similar to those set out in the ruling, can:
- apply such a ruling to their circumstances;and
- rely on that ruling,
even though they are not a party to the original application or are not entering into the specific arrangement referred to in the ruling.
The law is very clear that the answer to these queries is "No". Because under section 91EB a private ruling will apply only to "a person in relation to an arrangement", it can apply only to a person expressly referred to in the binding ruling (the person who applied for the binding ruling under section 91EC). Similarly, section 91FB provides that a product ruling "applies to an arrangement", i.e. the specific "arrangement" referred to in the ruling (to which the product ruling applicant will be a party).
This means that, in the case of a private ruling, if other taxpayers become aware of the existence of the ruling, but were not a party to the application or named in it, they cannot rely on the ruling in relation to their own tax affairs, even though they consider their circumstances may be the same as those set out in the ruling.
In the case of a product ruling, even though other taxpayers may consider the arrangement they are contemplating is identical to the arrangement set out in the ruling, they cannot rely on the ruling if their arrangement is not covered by it, i.e. their arrangement is not the one referred to in the ruling. to which the ruling applicant is a party In these circumstances, taxpayers' options are either to apply to their local Inland Revenue office for a non-binding opinion as to the tax consequences of their arrangement, or to apply for their own private or product ruling.
In both situations, taxpayers should be aware that a binding private or product ruling is not to be taken as a notice of the Commissioner's policy in respect of any particular tax law. Rather it is the Commissioner's view at a particular time on a particular arrangement and a particular taxpayer.
When making an application for either a non-binding opinion, or their own binding ruling, taxpayers may choose to cite an earlier binding ruling that supports their application. However, each case will be considered on its own merits,and, however a previous ruling on a similar arrangement will not automatically mean that a similar conclusion will be reached in all future applications.
To make a general statement about a particular arrangement, the Commissioner may issue a public binding ruling or an interpretation statement. These may be relied upon by all taxpayers, provided their arrangement is the same as set out in the public ruling or is covered by the interpretation statement.
Other pages in: General issues
- QB 12/11: Income tax - look-through companies, rental properties and avoidance
- QB 12/10: Do the historic depreciation rates continue to apply to grandparented structures acquired before 1 April 2005?
- QB 12/09: Income tax - look-through companies: interest deductibility where funds are borrowed to make a payment to shareholders to reflect an asset revaluation
- QB 12/08: Income tax - look-through companies: interest deductibility on funds borrowed to repay shareholder current accounts
- QB 12/04: Income tax - deductibility of expenditure on widening or metalling a farm acess road or track
- QB 12/03: Income tax - deductibility of expenditure on cattle stops
- QB 12/05: Income tax - deductibility of expenditure on stock yards
- QB 12/02: Income tax - Treatment of quad bikes for depreciation purposes
- QB 12/01: Income tax - deductibility of expenditure on replacing and extending an inlet race to a dairy shed
- QB 11/03: Income tax - look through companies and interest deductibility
- QB 11/02: Deductibility of expenditure incurred by bloodstock breeders in respect of horses that they race
- QB 11/01: Residential investment property or properties in Australia owned by New Zealand resident - NRWT treatment of interest paid to Australian financial institution
- QB 09/06: GST - Apportionment of the cost of bare land for the purposes of a change-in-use adjustment
- QB 10/06: Elections for qualifying company status
- QB 10/01: Reimbursing shareholder-employees for motor vehicle expenses and the use of the Commissioner's mileage rate
- Are tax sparing disclosures still required?
- QB 09/05: Residential investment property or properties in Australia owned by New Zealand resident - NRWT treatment of interest paid to Australian financial institution
- QB 09/03: Decisions on application of CA 1(2) - common law interest and income under ordinary concepts
- QB 09/02: Holiday houses - income tax treatment
- QB 09/01: Payments made in addition to financial redress under Treaty of Waitangi settlements - income tax treatment
- QB 08/04: Income Tax Act 2007: research and development credits (subpart LH) - tax avoidance (section BG1)
- Kiwisaver - creditable membership
- QB 08/03: Application for a private ruling or product ruling on an issue dealt with in a mutual agreement made under a Double Tax Agreement - Tax Administration Act 1994, sections 91E(4)(D)(ii) and 91F(4)(D)
- QB 08/02: Commissioner's power to issue a replacement ruling that operates retrospectively
- QB 08/01: Tax Administration Act 1994 - Section 91E(4)(f) and self-assessment
- QB 07/05 - Ability to rule where the Commissioner is auditing or investigating - whether the Commissioner has a discretion to rule or is prohibited
- QB 07/02 - Whether The Minor Beneficiary Rule Exemption In Section HH 3B Applies On A $1,000 "Per Beneficiary" Or On A $1,000 "Per Beneficiary Per Trust" Basis.
- Tax treatment of wooden scaffolding planks
- Exemption from gift duty for dispositions of property made by or under an order of the Court: section 75(A) Estate and Gift Duties Act 1968
- Bankrupt's ability to carry forward accumulated losses
- Records for controlled foreign companies or foreign investment funds to be available in English
- Website expenditure - deductibility
- Qualifying foreign private annuity exemption from the Foreign Investment Fund regime
- Tourism service providers' payments made to tour guides or drivers - the income tax liability of those parties and the tour operator employing the guide or driver
- Managing communications associated with a dispute referred to the Adjudication Unit
- When does derivation occur in relation to land sales with a deferred settlement, by business taxpayers who provide vendor finance?
- Section 108 Tax Administration Act 1994 (TAA) - commencement of four year statutory period (November 2002)