Practice Statement Law Administration
PS LA 2001/8ATO Interpretative Decisions
This document has changed over time. View its history.
|1. What is an ATO ID?|
|2. Why do we have ATO IDs?|
|3. When might an ATO ID be prepared?|
|4. Can taxpayers rely on ATO IDs?|
|5. The process for preparing an ATO ID|
|6. Maintaining the currency of ATO IDs|
|7. More information|
|This practice statement is an internal ATO document, and is an instruction to ATO staff.
Taxpayers can rely on this practice statement to provide them with protection from interest and penalties in the following way. If a statement turns out to be incorrect and taxpayers underpay their tax as a result, they will not have to pay a penalty. Nor will they have to pay interest on the underpayment provided they reasonably relied on this practice statement in good faith. However, even if they don't have to pay a penalty or interest, taxpayers will have to pay the correct amount of tax provided the time limits under the law allow it.
This Law Administration Practice Statement explains the policy for ATO Interpretative Decisions.
1. What is an ATO ID?
An ATO ID is a summarised version of a decision we have made on the application of the law to a particular situation.
2. Why do we have ATO IDs?
ATO IDs set out a precedential ATO view. The precedential ATO view system is explained in PS LA 2003/3 Precedential ATO view. Precedential ATO views are produced to ensure we provide consistent interpretative decision making and you are required to search for existing precedential ATO views and those being prepared as part of your resolution of interpretative issues.
You must follow an ATO ID where:
- in your judgment, there is no material difference between the facts of the issue you are making a decision on and the facts of an existing ATO ID, and
- you are satisfied that the application of the precedential ATO view set out in the ATO ID will result in a correct decision.
An interpretative issue is one where the application of the law is not straightforward. An exercise of a discretion, a conclusion of fact or the determination of a value for example, would not be an interpretative issue.
3. When might an ATO ID be prepared?
When deciding whether to prepare an ATO ID, you need to give serious consideration as to whether or not another form of precedential ATO view, for example a public ruling or determination is not more appropriate. As these products offer a high level of protection to taxpayers and provide more certainty, they are preferred. This is particularly so if there are multiple related issues for which a precedential ATO view is required. You should also be aware that if necessary, another form of precedential ATO view, for example a public ruling or determination, can be prepared over timeframes similar to that of an ATO ID on the same matter. That is, the question of timing should not of itself influence your consideration of what product is most appropriate.
All proposals to prepare an ATO ID should first be discussed with the Public Advice and Guidance Unit in your business line.
If it is agreed to be the right product, an ATO ID may be prepared for each decision on an interpretative issue where:
- there is no precedential ATO view on the issue, or
- there is an existing precedential ATO view however an ATO ID will improve the clarity or certainty of the ATO's interpretation of the particular area of the law.
An ATO ID might arise from any aspect of our work where an interpretative issue emerges, for example a private ruling, an audit, correspondence or a dispute. They can also arise from an interpretative issue where we are not yet required to make an actual decision, but we are aware that a scheme or transaction exists or is in serious contemplation.
4. Can taxpayers rely on ATO IDs?
ATO IDs are publications approved in writing by the Commissioner, and therefore offer penalty and interest protection to any taxpayer who might rely on them.
5. The process for preparing an ATO ID
The requirements of, and process for preparing, an ATO ID, are set out in the processes for public advice and guidance. These guidelines are available via the link in the More Information section of this practice statement.
6. Maintaining the currency of ATO IDs
In line with the requirements for precedential ATO view documents, business lines have the primary responsibility for maintaining the currency of ATO IDs.
The ATO ID Guidelines provide guidance on making changes to ATO IDs. In general terms, if an ATO ID is incorrect or requires substantial change, it should be withdrawn and replaced by a taxation ruling or determination. However, if the updates are minor, and do not affect the decision or reasons for decision, then the ATO ID can be amended rather than being withdrawn.
7. More information
- Public advice and guidance - reference materials and processes
|Date of amendment||Part||Comment|
|9 June 2016||All||Updated to the new LAPS format and style|
|Section 3||Clarify when an ATO might be prepared in accordance with new PAG guidelines|
|Section 5||Replace reference to ATO ID guidelines with PAG processes|
|3 September 2014||Paragraph 30||Format amended for clarity.|
|Paragraph 31||Deleted. Requirement for professional accreditation for authorised officers removed.|
|3 May 2013||Paragraphs 19-21||Revised to clarify that a public ruling should be considered when issue represents a significant risk.|
|Paragraph 28||Remove reference to general written advice, following integration of GST rulings system into general rulings provisions|
|Paragraph 34||Update to provide link to ATO ID template in Other References.|
|28 March 2013||Paragraph 17||Corrected dot point reference to para 27 to para 28|
|Other References||Updated link to ATO ID Guidelines|
|21 May 2012||Throughout||Updated to
|1 December 2011||Paragraphs 46 - 48||Content updated as a result of the publication of TD 2011/19 which explains general administrative practice.|
|Throughout||References to PMU changed to PTI&PRU
References to Tax Office changed to ATO
Correction of citation of references to related law administration practice statements
|9 November 2009||Paragraphs 14, 28, 31 and 29||References to the Technical Decision Making System (TDMS) updated to refer to Siebel.|
|Paragraph 25||Updated reference to CGT|
|Paragraph 28||Instance of when an ATO ID does not need to be prepared deleted|
|Paragraph 30||Updated reference to TCN|
|Paragraph 32||Updated a reference to a related practice statement from PS LA 2001/7 to PS LA 2008/4
Further clarification on publication and preparation of an ATO ID added
BSL references updated from OCTC to L&P
|Footnote 12||Updated a reference to a related practice statement from PS LA 2001/4 to PS LA 2008/3|
|2 September 2009||Contact officer details updated|
|23 July 2009||Updated a related practice statement from PS LA 2001/4 to PS LA 2008/3|
|11 August 2008||Contact officer details updated|
|26 November 2007||Paragraph 45||Corrected paragraph reference of PS LA 2003/3 (from para 33 to 35 of that practice statement)|
|8 June 2007||To clarify the issue of what 'no material difference' means, and to detail new exceptions to the requirement that ATO IDs are to be published|
Date of Issue: 8 June 2007
Date of Effect: 8 June 2007
Law administered by the Commissioner includes law governing income tax, indirect taxes, fringe benefits tax, withholding taxes, resource rent taxes, superannuation and excise.
If following the ATO ID would result in an incorrect decision, you should escalate the issue.
See sections 361-5 and 298-20 of Schedule 1 to the Taxation Administration Act 1953.
File 2001/7447; 1-5TNXJL2
Related Practice Statements:
PS LA 2003/3
PS LA 2008/3
TAA 1953 Sch 1 298-20
TAA 1953 Sch 1 361-5(1)
|2 September 2009||Updated statement|
|9 November 2009||Updated statement|
|1 December 2011||Updated statement|
|21 May 2012||Updated statement|
|28 March 2013||Updated statement|
|3 May 2013||Updated statement|
|3 September 2014||Updated statement|
|You are here||9 June 2016||Updated statement|
|This practice statement was originally published on 31 March 2001. Versions published from 2 September 2009 are available electronically - refer to the online version of the practice statement. Versions published prior to this date are not available electronically. If needed, these can be requested by emailing TCNLawPublishingandPolicy@ato.gov.au.|