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Inland Revenue

Tax Policy

A ruling which fails in part

(Clauses 53, 54, 59 and 60)

Summary of proposed amendment

Amendment are being made to sections 91EB and 91FB so that a ruling can be made invalid in part rather that in full only. This is when not all tax types ought to be affected by the invalidity. The amendment is aimed at providing greater flexibility in the rulings process.

Application date

The amendments will apply to new rulings made on or after the date of enactment.

Key features

Sections 91EB and 91FB are being amended to provide that if a ruling is no longer valid but the reason for the invalidity applies only to a certain tax type or types involved in the ruling, the other parts of the ruling relating to other tax types should continue to apply.


Currently under section 91EB(2) a binding ruling involving material differences with the arrangement actually undertaken is treated as fully invalid even if those differences are material only to certain aspects of the ruling. An example is when a ruling relates to both GST and income tax and the material differences relate only to the GST issues.