• Guidance and advice

    We help the community understand their rights and responsibilities within the taxation and superannuation systems. Our assistance includes guidance and advice, as well as dispute resolution.

    In 2010-11 we provided guidance through 27,126 products and binding advice through 9,075 private rulings and 210 public rulings. We also handled 24,255 disputes.

    The community requires a diverse range of assistance. In our experience most taxpayers, especially individuals and small businesses, seek practical step-by-step assistance expressed simply. This guidance covers more common scenarios and does not readily lend itself to being legally binding because of the myriad of circumstances it might apply to.

    Guidance

    The guidance we provide may not address specific circumstances of taxpayers and is not binding on the Commissioner. It includes practical information, such as fact sheets, calculators and brochures, to assist taxpayers deal with their tax obligations. For example we developed 1,274 electronic publications in 2010-11.

    This year we provided guidance on a range of topics. For example we published information for people whose rental properties had been damaged by a natural disaster and on deductions for study and job-seeking expenses following the Anstis decision.

    In 2010-11 we provided 7% more guidance products than in 2009-10. Requests associated with the superannuation excess contributions tax were the main source of increasing demand for practical guidance.

    TABLE 4.11: Guidance provided, 2009-10 to 2010-11

     

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Administrative guidance

    25,298

    27,126

    +7

    Law administration practice statements

    8

    20

    +150

    ATO interpretative decisions to enhance the precedent set for our officers (and available publically)

    246

    146

    -41

    TOTAL

    25,552

    27,292

    +7

    People who rely on our guidance materials but who nevertheless make an honest mistake are not subject to penalties.

    Binding advice

    Binding advice provides the highest level of protection for taxpayers who rely on it. In 2010-11 we provided 9,285 pieces of binding advice, 17% fewer than in 2009-10. Indications are that new publications and a preference for practical guidance has lead to fewer requests than in 2009-10.

    TABLE 4.12: Volume of binding advice, 2009-10 to 2010-11

     

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Private rulings and administratively binding advice

    10,946

    9,075

    -17

    Public rulings

    201

    210

    +4

    • public rulings and determinations
      (final and draft)
     

    81

    62

    -23

    • class rulings
     

    82

    121

    +48

    • product rulings
     

    38

    27

    -29

    TOTAL

    11,147

    9,285

    -17

    Private rulings

    A private ruling is our written opinion on the way in which a relevant provision applies, or would apply, to a particular taxpayer. It is legally binding on us.

    In 2010-11 we completed 9,075 cases compared to 10,946 in 2009-10. There was a greater number lodged by tax practitioners this year with 5,876 private rulings (65% of all private rulings) compared to 4,548 (42% of all private rulings) in 2009-10.

    Our service standard for private rulings was to finalise 80% of cases within 28 days of receiving all information, or by a negotiated date. In 2010-11, we achieved 88%, a significant improvement on 69% in 2009-10. The service standard achieved for taxpayer-lodged rulings increased to 88% from 71% last year and the service standard achieved for rulings lodged by tax practitioners increased to 87% from 69%.

    TABLE 4.13: Private ruling cases completed, 2009-10 to 2010-11

     

    Cases completed

    Within benchmark

    2009-10
    No.

    2010-11
    No.

    2009-10
    %

    2010-11
    %

    Income tax

     

     

     

     

      Individuals

    4,416

    2,943

    67

    86

      Micro enterprises

    2,263

    2,619

    63

    84

      Small-to-medium enterprises

    674

    388

    76

    92

      Large businesses

    248

    248

    87

    93

      Not for profit

    154

    183

    73

    86

      Government

    102

    108

    78

    91

    GST

    2,002

    1,388

    73

    91

    Superannuation

    1,014

    1,086

    79

    92

    Excise

    73

    112

    90

    94

    TOTAL

    10,946

    9,075

    69

    88

    TABLE 4.14: Elapsed time in days for private rulings, 2009-10 to 2010-11

     

    2009-10
    Mean days

    2010-11
    Mean days

    2009-10
    Median days

    2010-11
    Median days

    Income tax

           

      Individuals

    57

    50

    37

    28

      Micro enterprises

    68

    61

    44

    42

      Small-to-medium enterprises

    84

    63

    67

    44

      Large businesses

    121

    90

    89

    77

      Not for profit

    64

    83

    46

    55

      Government

    63

    62

    54

    44

    GST

    58

    53

    41

    40

    Superannuation

    68

    72

    44

    46

    Excise

    48

    52

    40

    30

    During the year we continued to refine the processes around the early engagement model for large market rulings. This has resulted in a significant improvement in the average time taken to complete large market rulings with positive feedback from taxpayers and their advisors.

    Public rulings

    A public ruling is the Commissioner's written opinion on the way in which a relevant tax provision applies to taxpayers generally or a class of taxpayers.

    Our public rulings program sets out the expected draft and final publication dates for rulings and determinations we are planning to issue. We develop our public rulings program in partnership with the National Tax Liaison Group.

    We issued 62 public rulings and determinations this year on a range of topics (27 draft and 35 final). Notable among these in providing certainty to the community were:

    • a number of draft and final determinations on the application of Division 7A (loans treated as dividends)
    • a determination on the application of the general anti-avoidance provisions to treaty shopping
    • draft rulings on black-hole expenditure
    • a ruling on the interaction between transfer pricing and thin capitalisation
    • a GST ruling on retirement villages.

    We also issued 121 class and 27 product rulings in response to specific requests from applicants.

    Timeliness continued to be a challenge for issuing public rulings and determinations in 2010-11. We issued 57% of public rulings on time against a target of 75%. We are focusing on this area and expect to continue to improve in 2011-12. However in some cases - particularly in response to draft rulings - industry and tax practitioner groups indicated they would prefer more time to fully explore alternatives to the ATO view. These include options to make representations to government about potential changes to the law.

    We fared better in timeliness for class and product rulings, issuing 88% and 96% respectively, against a target of 80%.

    Key performance indicator

    Reduce legal risks and increase certainty through ATO views

    Issue advice and practical guidance that assists people to meet their obligations

    We increased certainty through publishing guidance and binding advice, and through our strategic litigation.

    2008-09

    2009-10

    2010-11

    26,288 guidance products

    11,420 private rulings

    229 public rulings

    25,298 guidance products

    10,946 private rulings

    201 public rulings

    27,126 guidance products

    9,705 private rulings

    210 public rulings

      Last modified: 31 Oct 2011QC 28036