Taxpayer Rulings provide greater certainty about the application of tax laws and foster higher levels of compliance with tax legislation by:
- making rulings on transactions, which allow taxpayers to enter into transactions with confidence as to the tax outcomes
- applying an impartial and rigorous analysis of how the tax laws will apply.
This is a fee-based service provided by the Commissioner which allows the issuing of private, product and status rulings, which are the Commissioner's interpretations of the tax laws, and financial determinations which are formally binding on the Commissioner.
It is important that binding rulings, which bind the Commissioner for the period of their application, are technically correct and in accordance with the tax Acts and relevant case law. Staff, who prepare these binding rulings are usually qualified solicitors and thoroughly research the issues involved in the ruling application before preparing a draft.
Drafts of private and product rulings are then discussed with the applicant to ensure that they correctly describe the arrangement on which the ruling has been requested.
Ruling application allocation guidelines
Introduction Applications from taxpayers for binding rulings (private rulings, product rulings or status rulings) will be assigned to relevant business units within Inland Revenue and handled by:
- the Tax Counsel Office (TCO)
- appropriate personnel within the Customer and Compliance Services group
- jointly by TCO and the Customer and Compliance Services group.
The criteria below form the basis for this allocation. This allocation is to be made on the basis of the technical issues contained within each ruling application, rather than on the basis of each application as a whole.
The allocation guidelines generally reflect the fact that TCO is the final point of technical decision-making for the Department (particularly on matters that are complex or have a high level of uncertainty) and the business unit ultimately responsible under the escalation process for resolving internal inconsistencies on the correct application of the legislation.
These criteria are only for initial allocation purposes. It is possible that some of the matters referred to may only become apparent during the actual processing of the ruling application. However, once issues within an application have been allocated to a business group for processing, it shall be that business group's responsibility to process those and they shall not be reallocated unless there are exceptional circumstances.
In exceptional circumstances, or where this is necessary or highly desirable due to relative workload demands and available resources, with the approval of the Chief Tax Counsel the allocation of a particular application may vary from these guidelines.