Private rulings and oral rulings

Contributed by AnnetteMorgan and current to 27 July 2018

If you are unsure about the tax treatment of various past or future receipts or expenditures, you may apply to the ATO for a (written) private ruling or an oral ruling. You are entitled to rely upon the ruling and it binds the ATO to the opinion expressed. When faced with an unfavourable private ruling, you should not simply ignore it and treat the receipt or expenditure differently to how it is treated in the ruling. To do so will expose you to penalties. You may appeal an unfavourable private ruling to the Administrative Appeals Tribunal or the Federal Court.

Oral and private rulings are provided free but private rulings can take time for the ATO to make. Essentially, they provide a cheap alternative to advice from legal professionals. However, there are advantages and disadvantages to the binding nature of such rulings both on you and the ATO.

If you have simple tax affairs and you have a simple tax inquiry, you can apply to the Commissioner for an oral ruling, either in person at an ATO branch office or over the phone. If your inquiry is more complex, or you are dissatisfied with an oral ruling, you may apply for a (written) private ruling. An application form is available online from the ATO website.