Advice that is legally binding on us
We provide you with advice on how the laws we administer apply to you. If we provide this advice in the form of a ruling the advice will afford you with the highest level of protection if you rely on it.
Our advice includes parts which are legally binding on us and parts which are not. We clearly identify which parts of our advice are binding and non-binding.
Where you rely on the binding section of a ruling, the law protects you from having to pay a tax shortfall, or repaying overclaimed credits if the advice turns out to be incorrect and you then make a mistake. In addition, because we will apply the law as set out in the ruling, relevant penalties and interest on the tax shortfall will not apply.
Where you rely on the non-binding sections of a ruling, we will apply those parts to you as if we were administratively bound by them, unless we have good and substantial reasons not to, for example, if you rely on a ruling knowing that it is not appropriate for your circumstances.
Examples of legally binding advice can be seen in Table 1: legally binding advice.
Advice that we consider ourselves bound by
Some of the laws we administer do not enable us to provide legally binding advice. However, to properly administer the law, we can provide advice that we consider ourselves to be bound by (administratively bound), except in limited circumstances.
These exceptions include where:
- there have been legislative changes since we issued our advice
- a tribunal or court decision has affected our interpretation of the law since we issued our advice
- for other reasons, the advice is inappropriate (for example, if commercial practices have changed, if we think the ruling was applied inappropriately or where, upon reconsideration, we consider the advice to be wrong according to the law).
We generally produce this advice in the form of either administratively binding (rather than legally binding) rulings or other advice.
Where you rely on administratively binding advice and it turns out to be incorrect, you will not have to pay a tax shortfall. In addition, relevant penalties or interest on the tax shortfall will not apply if you rely on the advice reasonably and in good faith.
Examples of administratively binding advice can be seen in Table 2: administratively binding advice.
Other guidance
Guidance we issue can address how the law operates to assist taxpayers deal with their tax and super obligations in a wide variety of circumstances. It is usually of a straightforward or simple nature and is not legally binding on us. However, generally we will stand by the guidance we provide unless there is a good and substantial reason. Given the general nature of the guidance, you are responsible for deciding whether it applies to your particular circumstances.
If you rely on any of our guidance and it turns out to be incorrect, or you make a mistake because it was misleading, we will take this into account when determining what, if any, action we should take.
The level of additional protection you receive, and what happens, depends on the:
- type of guidance you relied on
- law it covers
- reason for the mistake.
As a general rule, if we require you to pay a tax shortfall or repay overclaimed credits, we will take that into account and not charge relevant penalties. Also, if you rely on the guidance reasonably and in good faith, any interest on the tax shortfall or overclaimed credits will not apply.
Where the guidance gives you a different level of protection, it will tell you what that protection is and when it applies.
The following tables give examples of different types of guidance products:
- guidance products which offer penalty and interest protection are set out in Table 3: Guidance
- products which offer different levels of protection are set out in Table 4: Edited private rulings, forums, discussion papers and Table 5: Superannuation advice.
Find out more about our commitment to you.
Level of protection by product
The levels of protection provided by our various products are explained in the following tables.
|
Product |
Protection from tax shortfall or overclaimed credit |
Protection from interest on the shortfall (see note) |
Protection from relevant statement penalties |
|---|---|---|---|
|
These include:
|
Yes |
Yes |
Yes |
|
Yes |
Yes |
Yes |
|
|
Yes |
Yes |
Yes |
|
Product |
Protection from tax shortfall or overclaimed credit |
Protection from interest on the shortfall (see note) |
Protection from relevant penalties |
|---|---|---|---|
|
Income tax series (IT series) These are rulings published before 1 July 1992. |
Yes |
Yes |
Yes |
|
Capital gains tax (Determination series) These are rulings published before 1 July 1992. |
Yes |
Yes |
Yes |
|
Yes |
Yes |
Yes |
|
Product |
Protection from tax shortfall or overclaimed credit |
Protection from interest on the shortfall (see note) |
Protection from relevant penalties |
|---|---|---|---|
|
No |
Yes |
Yes |
|
|
No |
Yes |
Yes |
|
|
No |
Yes |
Yes |
|
|
No |
Yes |
Yes |
|
|
Website material or publication Content on our website and in our downloadable or paper publications provide general assistance. This information is often simply expressed and may provide step-by-step guidance. |
No |
Yes |
Yes |
|
No |
Yes |
Yes |
|
|
No |
Yes |
Yes |
|
|
No |
Yes |
Yes |
|
|
Tools and calculators These are available on our website to help work out an amount or status when self-assessing a liability or entitlement. |
No |
Yes |
Yes |
|
Product |
Protection from tax shortfall or overclaimed credit |
Protection from interest on the shortfall (see note) |
Protection from relevant penalties |
|---|---|---|---|
|
Edited version of a private ruling |
No |
No |
No |
|
No |
Yes |
Yes |
|
|
Discussion paper |
No |
No |
No |
|
Product |
Protection from tax shortfall or interest, and relevant penalties |
|---|---|
|
Superannuation Guarantee Ruling and Superannuation Contributions Ruling |
Some protection against penalties may be offered |
|
Superannuation specific advice This is written advice relating to certain obligations required by the Superannuation Industry (Supervision) Act 1993 (SISA) for identified self-managed super funds. |
Tax, penalties and interest cannot be raised under the SISA, but some protection may be offered (see PS LA 2009/5) |
Note: Where our product protects you from interest on the tax shortfall or overclaimed credit, you must have acted reasonably and in good faith in order to be protected. The protection from interest does not extend to the general interest charge for late payment of the tax shortfall, once identified. For super guarantee charge matters, the protection does not extend to the nominal interest component of a super guarantee shortfall. Where you do not have to pay a tax shortfall, interest on the tax shortfall will not arise.
Additional information
For additional information see:
- Taxation Ruling TR 2006/10 Public Rulings.
- Law Companion Ruling LCR 2015/1 Law Companion Rulings: purpose, nature and role in ATO's public advice and guidance.
- Practical Compliance Guideline PCG 2016/1 Practical Compliance Guidelines: purpose, nature and role in ATO's public advice and guidance.
- Class Ruling CR 2001/1 Class Rulings system.
- Product Ruling PR 2007/71 The Product Rulings system.
- Taxation Ruling TR 2006/11 Private Rulings.
- Law Administration Practice Statement PS LA 2001/8 ATO interpretative decisions.
- Law Administration Practice Statement PS LA 1998/1 Law administration practice statements.
- Law Administration Practice Statement PS LA 2008/3 Provision of advice and guidance by the ATO.
- Law Administration Practice Statement PS LA 2008/4 Publication of edited versions of written binding advice.
- Law Administration Practice Statement PS LA 2009/5 Provision of advice and guidance by the Australian Taxation Office (ATO) in relation to the application of the Superannuation Industry (Supervision) Act 1993 and the Superannuation Industry (Supervision) Regulations 1994 to Self-Managed Superannuation Funds.