Can the Commissioner change her mind?

This QWBA is quite an interesting one as this discusses a situation where a taxpayer previously has a binding ruling by the Commissioner in relation to an arrangement, and the Commissioner’s ability to then deem the same arrangement to be considered tax avoidance at a later date.  One of the few concessions set out in the document is the fact that the Commissioner cannot change her position while the ruling is still “active” and changes can only apply once the ruling expires.

For those of you who are not familiar the tax rules there are both general and specific anti avoidance rules and BG 1 falls within the former category and can apply widely.

Applying for a binding ruling can be a somewhat long and expensive process and the possibility of the Commissioner later changing her mind is somewhat concerning. This is especially because the tax involved will be quite significant in some cases.

We as advisors hope that the Commissioner doesn’t consider applying this unless there is a notable change in the law or there is effective reasoning for a late change in heart.

The deadline for comment in response to this item is the 20 December 2017.