Changes to the Tax Administration (Binding Rulings) Regulations 1999

(Clauses 179 to 181)

Summary of proposed amendment

The bill proposes that the fees charged for binding rulings be increased to take into account increasing costs of providing a ruling and be expressed as “plus GST (if any)” to give greater clarity for taxpayers.

Application date

The amendment will apply from the date of enactment.

Key features

Fees payable for a binding ruling made by Inland Revenue are set out in Regulation 3 of the Tax Administration (Binding Rulings) Regulations 1999. The fees currently comprise an application fee of $310 and a further fee of $155 an hour (or part-hour), beyond the first two hours, spent in consideration of the application by the Commissioner.

Regulation 7 currently provides that the fees include GST. It also provides that for a supply which is zero-rated under the Goods and Services Tax Act 1985, the fee prescribed by the regulations is reduced by an amount equal to the GST portion of the fee.

The new fees will be $280 plus GST (if any) for the application fee, and $140 plus GST (if any) for the further fee.

The reference in Regulation 3(1)(b)(ii) to the fees payable for applications received before 1999 will be revoked as it is no longer relevant. Regulation 7 will also be revoked.

Background

The change to a “plus GST (if any)” basis stems from the GST rate increase on
1 October 2010 from 12.5% to 15%. The change to a “plus GST (if any)” basis expresses the fees which are payable for supplies which are zero-rated in a less complex manner.

The fees have not been increased since 1999. The increases proposed are minor, and will help to meet costs involved in providing rulings.