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Inland Revenue

Tax Policy

PUBLISHED 31 July 2009

Views sought on binding rulings law

An officials' issues paper released today seeks feedback on suggested technical changes to the legislation governing binding rulings to make the law easier to apply. Submissions close on 28 August. For more information see today's media statement and the issues paper, "The binding rulings system: legislative issues".

Hon Peter Dunne
Minister of Revenue


Views sought on changes to binding rulings law

An issues paper released today seeks feedback on suggested changes to the legislation on binding tax rulings, Revenue Minister Peter Dunne has announced.

Binding rulings are issued by Inland Revenue upon formal request by a taxpayer and set out how Inland Revenue will apply the tax laws to a particular business arrangement.

Introduced in 1992, they provide certainty for taxpayers - usually businesses considering complex tax arrangements - on the tax consequences of their proposed transaction.

The paper looks at a number of technical concerns with the legislation governing binding rulings and suggests several ways these might be improved to make them easier to apply

Among the changes suggested are:

  • replacing the general prohibition on "questions of fact" with a limited list of factual matters so taxpayers are aware of what the Commissioner of Inland Revenue cannot issue a ruling on;
  • introducing a more flexible fee-waiver provision which applies to fees charged when applying for a binding ruling; and
  • extending the ability to request a ruling to promoters of mass-marketed and publicly promoted schemes to remove an unnecessary restriction on who can request a ruling for such schemes.

"The changes outlined in the paper are based on technical concerns with the legislation that have been raised by taxpayers. The suggested solutions are a pragmatic approach to ensure that the rules work as they were originally intended," Mr Dunne said.

"I encourage all interested parties to put forward their views on the suggestions in this paper so the legislation on binding rulings operates as effectively as possible."

The issues paper, The Binding Rulings System: Legislative Issues, is available at Closing date for submissions is 28 August.

Mark Stewart - Press Secretary, Office of Hon Peter Dunne
Cell +64 21 243 6985