Queensland Law Society

Commissioner of Taxation’s remedial power

The Australian Tax Office (ATO) has published information about the Commissioner of Taxation’s recently enacted remedial power. The commissioner’s remedial power (CRP) benefits the community by allowing the commissioner to modify the operation of tax and super law to resolve certain unforeseen or unintended outcomes.

The ATO expects that the CRP will reduce red tape and provide greater certainty for taxpayers by allowing modifications that reduce compliance costs or ensure the law can be administered consistently with its intended purpose.

The commissioner has limited powers to modify the operation of tax law in circumstances in which entities will benefit, or at least be no worse off, as a result of the modification. This power may be applicable when the current law is producing unintended, negative impacts for taxpayers or is creating excessive compliance costs.

There are limitations on using the power that will ensure any modifications:

  • not be inconsistent with the intended purpose or object of the law
  • have a negligible budget impact
  • only apply when the outcomes for an entity will be no less favourable than the existing law.

The commissioner will consult publicly as part of exercising the power. Modifications are subject to parliamentary oversight and do not apply until the 15-sitting-day disallowance period has concluded.

More information is available from the ATO website.