Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

asked the Minister representing the Treasurer, upon notice, on 17 February 2012:

(1) For each of the financial years 2008 09, 2009-10, 2010 11, and for the period 1 July 2011 to 1 February 2012:

(a) how many private ruling applications has the Australian Taxation Office (ATO) received;

(b) how many private rulings were approved;

(c) can a breakdown be provided detailing the private ruling applications in terms of small business, large business and individuals;

(d) can a breakdown be provided detailing the private ruling applications by state;

(e) how many applications have been resolved within:

(i) 28 days, and

(ii) 60 days; and

(f) how many bankruptcy, insolvency and receivership proceedings have been instigated by the ATO.

(2) Is the ATO limiting payment plans to 2 years; if so, why.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

(1) (a) Private ruling applications received:

*The number of private ruling applications received are indicative numbers only as:

An application may be initially classified as a private ruling but may then be reclassified as another type (for example, interpretative guidance) or visa versa. The misclassification generally arises for requests that come in via general correspondence rather than via the ATO private rulings form

A private ruling application may come in via a tax agent and be counted as one receipt. However, if the application contains the details of multiple taxpayers it can be actioned as multiple applications

Multiple applications received from entities of a corporate group can be actioned as one application

An application received from a family business could be actioned separately for the company and individual directors.

(b) Private rulings approved:

Approved rulings are rulings that have been approved by an authorised officer before being issued and do not include private ruling applications that were finalised as withdrawn, decline to rule, invalid or no further action.

Further description:

Withdrawn – application withdrawn at taxpayer's discretion

Refuse to rule – the Commissioner declines to rule based on reasons as defined by legislation, for example, prejudice or undue restriction on the administration of taxation law

Invalid – the application did not meet the requirements of a valid application, for example, it did not identify the entity to whom the ruling applies. The ATO assists taxpayers to make a valid application wherever possible

No further action – various reasons, for example, other guidance products may have been provided to satisfy the request or a request may have been incorrectly classified as a ruling.

(c) Private ruling applications finalised by market segment (micro, small and medium, large):

Table includes all private ruling cases (including cases that are withdrawn, decline to rule, invalid or no further action).

* Micro enterprises = businesses with an annual turnover under $2 million.

** Small and medium enterprises = business with an annual turnover of $2 million to $250 million.

*** Large businesses = corporate groups with an annual turnover above $250 million.

****Includes Not For Profit and Government

(d) Private ruling applications finalised by requestor's state:

Table includes all private ruling cases. Table includes all private ruling cases (including cases that are withdrawn, decline to rule, invalid or no further action).

*Unknowns are overseas clients or those not yet in the Australian tax system (for example, minors).

**State break downs are not available for 2008-09 from the legacy case management system.

(e) Private rulings finalised within 28 and 60 elapsed days:

Private rulings finalised within 28 days of receiving all information or for complex work by the negotiated due date:

(f) The numbers of personal bankruptcies and company wind-ups initiated by the ATO):

These figures represent the number of bankruptcies and wind-ups initiated by the ATO. They do not include instances where the ATO commenced bankruptcy or wind-up proceedings which were subsequently discontinued. For example, where the taxpayer makes a significant payment or enters into a satisfactory payment plan.

The ATO takes a balanced approach to managing debt based on a consideration of taxpayers' individual circumstances, including their lodgment and payment history and capacity to pay. The ATO supports and assists taxpayers willing to work with the ATO, while taking a firm approach in relation to those taxpayers who do not.

Business viability is an important consideration in determining the appropriate collection action.

As a result of the focus on business viability, ATO initiated wind-ups have increased. However they still represent only a small proportion of total wind-ups and the decision to initiate wind-up action is only taken after other courses of action have been exhausted.

The ATO has not instigated any receivership proceedings in 2008-09, 2009-10, 2010-11 or 2011-12 as at 31 Jan 2012.

(2) Is the ATO limiting payment plans to 2 years; if so, why?

The ATO is not limiting payment plans to two years. The terms of any payment plan, including its length, are negotiated by the ATO and the taxpayer (or their authorised representative) based on a consideration of the taxpayer's individual circumstances.