The ATO on Mon 13.1.2014, released a Decision Impact Statement on the Full Federal Court’s decision in Macquarie Bank Limited & Anor v FCT  FCAFC 119. In that case, the Full Federal Court refused Macquarie Bank Ltd leave to appeal against the decision of Edmonds J in Macquarie Bank Limited & Anor v FCT  FCA 887. Edmonds J had refused to review a decision of the Commissioner and his delegate to refuse to apply his view of the law on the allocation of Offshore Banking Unit (OBU) expenses solely on a prospective basis.
The ATO said the Full Court’s decision confirms its understanding that when the Commissioner has formed the view that the tax law imposes a liability on a particular taxpayer, the Commissioner has a duty to assess the taxpayer in accordance with that view (eg on completion of an audit). In light of the Full Court’s comments, the ATO said it will review the wording of the PS LA 2011/27. However, it said in the mean time, the PS LA continues to apply as an instruction to ATO staff about resource allocation decisions, with the intended practical effect of not disturbing assessments for years where the factors outlined in the PS LA are present.
[LTN 7, 13/1/14]