A product is an arrangement where a number of participants individually enter into substantially the same contractual arrangements and transactions (the scheme) with a common entity or group of entities.
A product ruling will only be given in relation to a similar group of participants, so that the same tax result will occur for each. For example, they may all enter into largely the same management agreements with a responsible entity or manager connected to the product or project.
Additionally, a ruling will not be given if it depends on an unresolved issue, such as whether a taxpayer is in business. No certainty can effectively be given in such cases.
The product may be, among other things:
- an investment arrangement, such as a managed investment scheme
- a tax-effective arrangement
- a financial arrangement
- an insurance arrangement.
Often, the product is offered to the general public through an information memorandum or product disclosure statement, but individuals may be personally invited to participate.
Common types of products we're asked to rule on are:
- forestry schemes (involving, for example, blue gums, pine, sandalwood)
- agribusiness projects (involving, for example, vineyards, olives, fruits, nuts)
- financial products.
A product ruling may also be appropriate for other types of products.
We use the following terms in relation to product rulings:
- Scheme is a general term we use to refer to any arrangement, agreement or set of agreements. We describe the scheme in our product rulings.
- The promoter is typically the entity offering the product.
- A product ruling participant (or investor) is the person who enters into an arrangement/product/scheme.
- The product ruling applicant (or promoter) is the person who applies for a ruling from us on behalf of the participants or potential participants in the product. The applicant may be the responsible entity or manager of a managed investment scheme, or its representative.