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.
On 1 August 2012, the Commissioner reassesses Company Pty Ltd’s annual liabilities under the Payroll Tax Act for the 2008–09 and 2009–10 financial years. The 2008–09 reassessment reduces the taxpayer’s primary tax liability from $370,000 (paid on self assessment) to $350,000, entitling the taxpayer to a refund of $20,000.
The 2009–10 reassessment results in an increase of the taxpayer’s primary tax liability from $400,000 (paid on self assessment) to $430,000; an increase of $30,000.
As at 1 August 2012, s.38 of the Administration Act provides the Commissioner with a discretion to apply part or all of the refund for the 2008–09 liability to any tax law liability of the taxpayer at that time, or which the Commissioner reasonably expects may arise in the next 60 days. Failing that, the Commissioner must refund that amount to the taxpayer.
The refund for 2008–09 becomes available for the purposes of s.40(1)(c) of the Administration Act on the making of the reassessment for that liability on 1 August 2012. Consequently, it does not affect the accrual of UTI on the 2009–10 liability up to that date.
Under s.54 of the Administration Act, UTI will accrue on the $30,000 primary tax payable but unpaid for that year on and from 22 July 2010.13 Until the 2008–09 reassessment is made and the Commissioner applies the refund to the 2009–10 year liability, or the taxpayer otherwise pays14 that liability, the 2009–10 liability remains unpaid and UTI continues to accrue.
Consequently, the reassessment for 2009–10 will include UTI on $30,000 for the period 22 July 2010 to 1 August 2012 inclusive, at the applicable rates15, totalling $7,815.85.
On 1 August 2012, the Commissioner exercises the discretion under s.38 to apply the $20,000 refund for 2008–09 to Company Pty Ltd’s total outstanding liability for 2009–10 of $37,815.85. In accordance with s.42 of the Administration Act, the $20,000 is applied first to UTI, then to the outstanding primary tax. From that time, the taxpayer has primary tax payable and unpaid for the 2009–10 year of $17,815.85. Unpaid tax interest will continue to accrue on the outstanding amount until it is paid.
In the circumstances outlined in Example 1, the Commissioner would not remit any of the UTI accrued on the 2009–10 reassessment for the period 22 July 2010 to 1 August 2012.
This is because the UTI has been applied in accordance with the reasons UTI is imposed, and the refund did not become available for the Commissioner to apply to the outstanding liability under the 2009–10 reassessment until 1 August 2012.
Commissioner of State Revenue
Date of issue: 1 October 2020
|Public Ruling||Issued||Dates of effect|
|TAA060.4.3||1 October 2020||1 October 2020||Current|
|TAA060.4.2||27 September 2018||1 October 2018||30 September 2020|
|TAA060.4.1||7 November 2013||7 November 2013||30 September 2018|