A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.
Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.
Y Pty Ltd (Y) enters into an agreement with X Pty Ltd (X) to purchase X’s business. Amongst other things, Y will purchase X’s book debts at a discount. The exemption for debt factoring agreements in s.149 of the Duties Act will not apply because X and Y do not enter into the transaction as part of a finance arrangement. Further, the transaction is one of purchase and sale.
GHI Pty Ltd (GHI) has book debts that it is unable to recover. GHI subsequently sells the book debts to MNO Debt Collection Pty Ltd (MNO) at a discount. The exemption in s.149(1)of the Duties Act does not apply because the agreement entered into by GHI and MNO is primarily an arrangement for the recovery of bad debts by GHI rather than a finance arrangement. The transaction is one of purchase and sale.
V Pty Ltd (V) applies for finance to XYZ Pty Ltd (XYZ), a financial institution. The finance will be provided by debt factoring. V enters into an agreement to sell some or all of its book debts to XYZ. XYZ will pay a percentage of the face value of each book debt to V when the debts are sold to XYZ. When the debts are due, they are collected by V on behalf of XYZ. The exemption in s.149(1) of the Duties Act applies because the agreement is entered into as part of a finance arrangement between V and XYZ.
Commissioner of State Revenue
Date of issue: 24 February 2009
|Public Ruling||Issued||Dates of effect|
|DA149.1.1||24 February 2009||24 February 2009||Current|
|Supersedes Revenue Ruling DA88.1||1 March 2002||1 March 2002||23 February 2009|