• How our advice and guidance protects you

    We are committed to providing you with accurate, consistent and clear advice and guidance to help you understand your rights and your obligations.

    If you follow any of our advice or guidance that 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.

    If you make a mistake because of our advice or guidance, the level of additional protection you receive, and what happens, depends on:

    • the type of advice or guidance you relied on
    • the law it covers
    • the reason for the mistake.

    See also:

    Advice that is legally binding on us

    We provide you with advice on how the laws we administer apply to you. We generally provide this advice in the form of a ruling.

    This advice provides 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 parts, the law protects you from having to pay a tax shortfall 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, the false and misleading penalty and interest on the tax shortfall will not apply.

    Where you rely on the non-binding parts, 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.

    Advice that we consider ourselves to be bound by

    Some of the laws we administer do not enable us to provide legally binding advice. However, to properly administer the law, we provide advice that we consider ourselves to be bound by, 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, the false and misleading penalty or interest on the tax shortfall will not apply if you rely on the advice reasonably and in good faith.

    Guidance

    We provide a range of guidance to help you understand your rights and obligations under the laws we administer.

    Where you rely on our guidance and it turns out to be incorrect, or it is misleading, and you make a mistake, our commitment to you is that we take this into account when determining whether or not to impose a tax shortfall.

    As a general rule, if we require you to pay a tax shortfall, the false and misleading penalty will not apply. Also, if you rely on the guidance reasonably and in good faith, any interest on the tax shortfall 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.

    See also:

    Level of protection by product

    The levels of protection provided by our various products are explained in the following table.

    Product

    Protection from tax shortfall?

    Protection from interest on the shortfall?*

    Protection from false or misleading statement penalty?

    Legally binding advice

    Public ruling

    These include:

    • Taxation ruling (TR series)
    • Taxation determination (TD series)
    • GST ruling (GSTR series)
    • GST determination (GSTD series)
    • Law companion guideline (LCG)
    • Class ruling
    • Product ruling

     

    Yes

    Yes

    Yes

    Private ruling

    Yes

    Yes

    Yes

    Oral ruling

    Yes

    Yes

    Yes

    Administratively binding advice

    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

    Administratively binding advice

    Yes

    Yes

    Yes

    Guidance

    ATO interpretative decision

    No

    Yes

    Yes

    Practical compliance guideline

    No

    Yes

    Yes

    Draft public ruling

    No

    Yes

    Yes

    Draft law companion guideline

    No

    Yes

    Yes

    Law administration practice statement

    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

    Oral and written guidance

    No

    Yes

    Yes

    Decision impact statement

    No

    Yes

    Yes

    Media release

    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

    Other

    Edited version of a private ruling

    No

    No

    No

    Public speeches and minutes of consultative forums

    No

    Yes

    Yes

    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)

    Discussion paper

    No

    No

    No

    * Where our product protects you from interest on the tax shortfall, 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. For superannuation guarantee charge matters, the protection does not extend to the nominal interest component of a superannuation guarantee shortfall. Where you do not have to pay a tax shortfall, interest on the tax shortfall will not arise.

    See also:

    • TR 2006/10 Public Rulings
    • LCG 2015/1 Law Companion Guidelines
    • PCG 2016/1 Practical Compliance Guidelines
    • CR 2001/1 Class Rulings system
    • PR 2007/71 The Product Rulings system
    • TR 2006/11 Private Rulings
    • PS LA 2001/8 ATO Interpretative Decisions
    • PS LA 1998/1 Law Administration Practice Statements
    • PS LA 2008/3 Provision of advice and guidance by the ATO
    • PS LA 2008/4 Publication of edited versions of written binding advice
    • 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
    • PS LA 2009/9 Conduct of ATO litigation and engagement of ATO Dispute Resolution

    Tax shortfall, interest and penalties

    Tax shortfall

    A shortfall amount arises where a liability is less (or a credit, grant or benefit is more) than it would otherwise have been according to law.

    Interest on the shortfall

    Interest is charged on a tax shortfall in the form of a shortfall interest charge (SIC) or a general interest charge (GIC).

    See also:

    False or misleading statement penalty

    An administrative penalty for making false or misleading statements applies whether or not a tax shortfall arises as a result of the statement.

    Even where this penalty applies, the law gives us discretion to remit the penalty (partially or in full) depending on individual circumstances.

    See also:

    Last modified: 13 Mar 2017QC 40412