Plan C - the ATO Private Ruling

2017-11-21 13:03:39


If you are like me, you'd prefer to ask a friend, classmate or collegue than go to the 'boss' for advise or guidance on something. Its not that you are week or untrusting, it just seems easier to ask someone at your own level for advice.

So it is with companies seeking ESIC status, often turning to the ATO ruling as a Plan C, after failing the points test, and failing to categorically assess on principals. Its fair to say that 'we' approach the ATO with some trepidation. 

Reconfirming this are reports showing a less than easy pathway ahead of applicants. 

Yet, you should take some comfort from this and the experiance of some of our own ESIC's, for example, we have learned that;

- the ATO are issuing prospective rulings that allow a window of investment (not as we previously indicated) a retrospective rulling that's outdated by the time its issued
- rulings are not taking as long as you would expect, in some cases less than 1 month!
- the rullings typcially cover 1/7/16 to 30/6/17
- the documentation and followup questioning isn't extra-ordinary

On the down side, the ATO rulings are as allways issued with the following limitations;
- The ruling does not represent a guarantee 
- The ruling is only about how the tax law applies based upon the facts and information that you have provided. - The ruling should not be used in promotional materials to imply that we guarantee or endorse investment in your company.
- Potential investors must form their own view about the commercial and financial viability of the company. 
- The Commissioner recommends a financial (or other) adviser be consulted for such information 

And then there is the added cost of an application, being anywhere from $1,000 to $9,000.

So what's my advice? 

I've got to say its horses for courses, if you need an ATO ruling you shouldn't hesitate, get your details together and get an application in, its only going to get busyer next year, however, if you are not sure if you qualify, then don't, get some advice and think about how you can accrue points, it may take about the same time to confirm eligibility but the points system will benefit you twice, firstly with ESIC confirmation and secondly with the credit that's ascribed to your completed criteria.

As always I hope that helps,



Published By: Tom