What is a class ruling?
What is a class ruling?
Overview
Class rulings are public rulings that enable us to provide legally binding advice in response to a request from an entity seeking advice about the application of a relevant provision to a specific class of entities, for a particular scheme.
The purpose of a class ruling is to provide certainty to participants and minimise the need for individual participants to seek private rulings.
Class ruling CR 2001/1 Class rulings system outlines the class rulings system.
Who is the participant?
The participant is the entity within a specified class who enters into a specified scheme or arrangement as described in the examples of class rulings.
Who is the principal?
The principal is the entity involved in carrying out the specified scheme or arrangement for a specified class of entities - for example, an employer seeking advice for a class of employees. A principal can also be a participant in the scheme.
Who is the applicant?
The applicant is the person who applies for a class ruling on behalf of the principal, the participants or potential participants in the scheme. It can be a tax agent who acts on behalf of the principal or participants.
One of the participants can represent the class of entities in its dealing with the tax agent who will file the class ruling application. The representative participant will require authorisation from all the other class of entities, for them to act on their behalf about this matter.
Applying for a class ruling
When should you consider applying for a class ruling?
You may consider requesting a class ruling when you are seeking advice about the application of a tax law to a specific class of entities for a particular scheme. A class of entities could be employees of a business, shareholders of a company or recipients of a particular government grant or subsidy.
Examples of class rulings
Situations where a class ruling may be given include:
- an employer seeking advice about the tax consequences of retention bonuses for a class of employees
- an employer seeking advice about the tax consequences of an early retirement scheme for a class of employees
- an employer seeking advice about the tax consequences of an employee share acquisition plan for individual employees
- a company seeking advice about the tax consequences for its shareholders of a restructure of the company, a split or consolidation of its shares, or any other proposed transaction of the company affecting the tax affairs of its shareholders
- a public company seeking advice about the application of the scrip-for-scrip rollover provisions to its shareholders
- the Australian Government, state or territory government, or one of their authorities, seeking advice about a proposed transaction - for example, an industry restructure that has tax consequences for participants in that industry.
Class rulings are not issued for investment schemes and similar products. You can request product rulings for these.
Class rulings for indirect taxes (on and after 1 July 2010), in particular, goods and services tax, cannot be issued to different classes of entities for a set of generic schemes.
When would we decline to give you a class ruling?
We make and withdraw class rulings at our discretion.
Without limiting our discretion to refuse to rule in other instances, a class ruling will not be issued if:
- the request is frivolous or vexatious - including requests where any of the following apply
- the scheme is only hypothetical, that is, the scheme the application relates to is not being carried out and is not seriously contemplated by the applicant
- there is no realistic chance of implementing the scheme
- the scheme is revised or additional information provided, indicating that there is, in fact, no settled scheme on which we may rule
- the ruling, or circumstances associated with the ruling, could reasonably be misleading to participants, including requests
- where the government has announced a change to the law on which we have been asked to rule
- about general anti-avoidance provisions
- where the material provided in support of the application cannot reasonably be relied on
- it is our opinion that insufficient information has been provided despite our request for additional information, including requests where material provided is inconsistent, inaccurate or contains errors so the scheme cannot be determined
- it is our opinion that it is unreasonable to comply with the application given the extent of resources available or other relevant matters, for example, we may refuse to issue a class ruling in the following circumstances
- in the case of protracted and very time consuming matters to which we cannot devote resources
- where the issues are sufficiently covered by a previously issued public ruling
- where statutory or other government requirements (for example, prospectuses, licences, approvals) have not been met and are not expected to be met, have expired, have been withdrawn, or are expected to expire or be withdrawn in the near future.
What are the conditions for class rulings?
Entities should be aware that the issue of a class ruling for a particular scheme is generally conditional on the applicant doing all of the following:
- acknowledging that we will reveal in the ruling
- the name of the entities involved as principals in carrying out the scheme
- the name and description of the scheme
- a description of the agreements, deeds and transactions to which the participants are parties
- obtaining express consent (to be named) from all parties named in the ruling
- verifying that the description of the scheme contained in the proposed ruling is accurate.
How to apply for a class ruling
What should you include in your class ruling application?
The Class ruling application form is designed to help applicants make their application. However, the use of this form is not compulsory and applicants can make applications for class rulings without the use of this form if they choose to.
Applications should be in writing. The information that must be provided in your request for a class ruling includes:
- the full name of the entity that the class ruling is for, its tax file number (TFN) and Australian business number (ABN) and address
- the applicant's contact information (if different from the entity that the class ruling is for) including the name and address of the person authorised to discuss the matter with us
- a clear and accurate description of the number and type of entities affected by the ruling and the time period it covers
- whether the applicant or someone on their behalf has previously lodged a class ruling request on this topic or a topic with similar facts
- a full and accurate description of the facts that are relevant to the scheme, including details of the principals carrying out the scheme and any documents referred to in the scheme
- if it is relevant, the title given to the scheme
- a clear articulation of the questions and issues that you want answered - your questions must be sufficiently clear for us to identify the issues that are to be the subject of the ruling
- if your application is lodged by a tax professional
- reference to specific provisions of the law on which a ruling is required
- results of research undertaken, including journal and textbook commentary and case citations and references to public rulings (if applicable)
- your argument - if you are
- a tax professional, state your own opinion on the questions, together with the reasons behind that opinion (in line with the research provided)
- not a tax agent or other tax professional, state to the best of your ability how you think the scheme should be treated.
Any supporting documentation should be provided with the application.
Viewing previously published class rulings may help you prepare your application and ensure that you supply all the necessary information.
Where do you send your class ruling application?
You can lodge your application with us in person, by fax or mail:
Applicant
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Fax to
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Mail to
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Individuals
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(02) 6225 0901
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Micro Enterprises and Individuals - Provision of Advice
Australian Taxation Office
PO Box 3575
ALBURY NSW 2640
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Micro business (less than $2 million turnover)
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(02) 6225 0901
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Micro Enterprises and Individuals - Provision of Advice
Australian Taxation Office
PO Box 3575
ALBURY NSW 2640
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Small to medium business
($2 million to $100 million turnover)
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(02) 6225 0906
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Small Medium Business - Provision of Advice
Australian Taxation Office
PO Box 3577
ALBURY NSW 2640
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Excise
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1300 650 128
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Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
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Superannuation
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1300 669 846
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Superannuation Business Line
Australian Taxation Office
PO Box 3578
ALBURY NSW 2640
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Large business (generally group turnover of $100 million or more) and international
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1300 661 106
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LB&I Provision of Advice
Australian Taxation Office
PO Box 3008
PENRITH NSW 2740
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Goods and services tax
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1300 139 031
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GST Technical Advice
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
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Investment schemes advice
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1800 033 211
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Australian Taxation Office
PO Box 3546
ALBURY NSW 2640
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After applying for a class ruling
What happens after we receive your application?
We will acknowledge a class ruling application as soon as it is received. An author, approving officer and peer reviewer are allocated as soon as possible. The application is then reviewed and you will be advised whether the application is valid. We aim to finalise an application in the shortest time possible; however, the actual turnaround time depends on the quality of the application, the level of disclosure and the time at which all relevant information is available to us. We will refuse to make a ruling if we don't receive all the necessary information, so make a full disclosure at the earliest possible time.
We will continue to communicate with you about the progress of your ruling, including the expected timeframe for its issue. For certain ruling topics, internal processes may apply which will affect the issue date. We will advise you if this applies.
What happens when we issue the class ruling?
Before we publish a class ruling, a copy of the draft ruling is sent to the applicant to obtain a signed statement from the applicant that:
- the description of the scheme as contained in the class ruling is accurate and covers all relevant features of the scheme
- all parties specifically named in the proposed class ruling have expressly consented to being named
- the negotiated date for publication is acceptable.
The draft ruling cannot be relied on and the applicant should not convey the advice within it to others, except those whose consent is required.
It is only when the class ruling is published by us and the notice appears in the Government Notices Gazette (Gazette) that the class ruling may be relied on.
Can you withdraw a class ruling application?
You can tell us that you want to withdraw a class ruling application at any time before the class ruling is made.
We will confirm the withdrawal in writing.
When do class rulings apply from?
Class rulings will stipulate a date of effect from which the ruling applies.
A class ruling may also specify the date on which it will cease to have effect. If this is the case, the class ruling applies to all entities within the specified class who participate in the specified scheme during the term outlined in the ruling.
Where are class rulings published?
A class ruling is a public ruling issued under Division 358 of schedule 1 to the Taxation Administration Act 1953. Accordingly, for a class ruling to be made the ruling must be published and notice of it must be published in the Gazette.
More information
To find a class ruling, refer to Class rulings held in the ATO Legal Database.
For more information about legislation and regulations, refer to Legislation and supporting materials.
Our legal database contains the principal and amending Acts that govern Australian Government tax law, as well as the associated regulations and related external material (such as explanatory memoranda and second reading speeches).
Last Modified: Friday, 9 November 2012
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