Trust Bloomberg BNA's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.
Aug. 22— The path is clear for parliament to hand the Australian Taxation Commissioner new powers to issue remedial rulings, after the opposition Labor Party indicated its support for the government proposal.
Labor's shadow assistant treasurer, Andrew Leigh, signaled his support Aug. 19 for legislation granting the new powers, in a letter sent to Treasurer Scott Morrison and obtained by Bloomberg BNA.
The prospect of the commissioner being empowered to issue remedial directives will be welcomed by businesses long frustrated by a backlog of legislation to remedy tax system glitches and inefficiencies.
Leigh said passage of the bill would allow “timely resolutions” of problems arising from the unforeseen or unintended consequences of tax law.
The proposed bill is expected to empower the commissioner to issue legislative instruments to modify the operation of a tax law in certain circumstances.
The commissioner will only be able to exercise the remedial power if the modification is consistent with the purpose of the legislation, is considered reasonable and will have a negligible impact on the federal budget.
As an additional safeguard, parliament could disallow any instruments it considers inappropriate.
The Corporate Tax Association's chief executive, Michelle de Niese, Aug. 22 described the proposal as “a great step forward,” noting that the new powers couldn't be used to disadvantage a taxpayer.
“It has a number of significant safeguards to ensure that the power isn't abused,” she told Bloomberg BNA by phone.
De Niese noted that legislators often focus on integrity-based changes to tax legislation, resulting in the delayed introduction of amendments to maintain the tax system and reduce compliance costs.
Apart from the U.K.—where similar rulings can be issued through administrative arrangements—few if any other jurisdictions have given their tax agency chiefs similar powers, she added.
“Depending on how effectively the Australian Taxation Offices utilizes this power, it could well be something other jurisdictions will look to as a way in which to reduce uncertainty and compliance costs for taxpayers,” de Niese said.
John Walker, Sydney-based head of Baker & McKenzie's Asia Pacific Tax Group, agreed that much will depend on the extent and manner in which the Commissioner exercises the proposed discretionary powers to issue remedial rulings.
It will be interesting “to see how this discretion will be applied in practice,” he told Bloomberg BNA in an Aug. 22 e-mail.
A version of the bill to give the commissioner the proposed powers lapsed in the last parliament, ahead of the July 2 federal election, and will need to be reintroduced by the government.
Parliament is due to convene Aug. 30.
To contact the reporter on this story: Murray Griffin in Melbourne at email@example.com
To contact the editor responsible for this story: Penny Sukhraj at firstname.lastname@example.org
The Tax and Superannuation Laws Amendment (2016 Measures No. 2) Bill 2016, the predecessor to the version to be reintroduced, is at http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr5645%22.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)