Yesterday the Commissioner published Miscellaneous Taxation Ruling MT 2012/3 Administrative penalties: voluntary disclosures, which outlines the Commissioner’s interpretation of s 284-225 or Schedule 1 to the TAA.  This Ruling relates to all taxes, including GST, and provides an important resource for taxpayers and their advisers who form the view that GST may have been underpaid.  The ruling was issued in draft form as MT 2011/D3.

The Ruling outlines the circumstances where the penalties otherwise imposed under Schedule 1 to the TAA will be:

• reduced to nil – where the entity voluntarily tells the Commissioner before being told by the Commissioner that an examination of its affairs is to be conducted (or before the day the Commissioner, in a public statement, requests voluntary disclosures with respect to the matter) and where the shortfall amount is less than $1,000 or there is no shortfall amount;
• reduced by 80% – where the entity voluntarily tells the Commissioner before being told by the Commissioner that an examination of its affairs is to be conducted (or before the day the Commissioner, in a public statement, requests voluntary disclosures with respect to the matter)
• reduced by 20% – where an entity voluntarily tells the Comissioner after being told by the Commissioner that an examination of its affairs is to be conducted.

The Ruling also outlines the Commissioner’s views on the a number concepts which are important concepts in s 284-255 of Schedule 1 to the TAA, including

• what constitutes an ‘examination…of your affairs’;
• when an entity will be taken to have been told that an examination is to be conducted of its affairs;
• the words ‘voluntarily tells’;
• the principles regarding the making of a voluntary disclosure.