Appendix A Selected Features of the Revenue Ruling System

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Australia: Where the taxpayer’s request raises particularly complex matters that will take more than 28 days to resolve after receiving all the required information, an extended reply date is negotiated. Austria: From 2011 only private rulings on group taxation, business restructuring or transfer pricing are binding on the revenue body and fees will be charged. Canada: Income Tax – within 90 business days of receipt of all essential information from the client; GST/HST – within 45 working days of receipt in the CRA. This excludes highly technical and precedent and/or policy-setting GST/HST rulings and interpretations. Estonia: With provision to extend by 30 days. Greece: Private rulings only apply as regards to Advance Pricing Agreements (APAs). India: Central Board of Direct Taxes issues Circulars, which are in the nature of public guidance. Israel: Fees are required only for rulings on mergers and acquisitions. Latvia: 1 month is norm but may be extended for objective reasons up to 4 months, subject to notification of this to applicant. Italy: Rulings are binding only on the Revenue Agency. Lithuania: 60 days is norm but further 60 days may be added where additional examination required. Luxembourg: Direct taxes only. Malaysia: Fees are charged only for Advanced Private Rulings. Portugal: 150 days is norm but can be 90 days if a request to justify its urgency is made by the taxpayer and accepted by the tax administration. Singapore: 8 weeks for income tax and 4 weeks for GST; expedited rulings can be made for an additional fee. Slovak Republic: There is no general period within which the revenue body (SFA) is obliged to issue a private ruling following a taxpayer’s request. The SFA will issue (on the basis of the written request of the taxpayer) the binding statements (defined by the Tax Procedure Code) to the tax regulations application from 1 September 2014. In such cases, the issuing period is to be defined 60 days from the day of the written request delivery (max. 6 calendar months – after consultation with the taxpayer). Required fee is 1% (at minimum EUR 4 000), 2% (at minimum EUR 5 000) or 3% (at minimum EUR 6 000) of the assumed business case value. These binding statements are binding for the revenue body and the second-instance (appellate) authority. South Africa: Depends on complexity of ruling.

Canada: Only private rulings on income tax matters are subject to a fee. India: Tax administration does not give private rulings. There is the institution of the Authority of Advance Rulings which the taxpayers may approach for a ruling on specific facts applicable to their case.

Source: OECD (2015), Tax Administration 2015: Comparative Information on OECD and Other Advanced and Emerging Economies, OECD Publishing, Paris.

Appendix B Sample Legislative Provisions for an Advance Ruling Regime

Set out below is a sample set of provisions establishing an advance tax rulings regime. The provisions are general in nature and in the form of simplified sample provisions. Importantly, they do not take into account the individual circumstances of any particular tax system. The ultimate legal framework for the introduction or codification of an advance ruling regime in any given country would need to take into account the specific legal tradition and system, as well as the political and administrative structure and fiscal policies, of the country concerned. Further, the more detailed procedural rules need not be reflected in the overarching law but could form part of any underlying regulations or interpretative or guidance notes. The overarching legal framework may merely operate to support the power of the tax authority to issue the rulings and codify the key features of the advance ruling regime being established.

Chapter I—Private Rulings

Article 1. Binding Private Rulings

Article 2. Refusing an Application for a Private Ruling

Article 3. Making a Private Ruling

Article 4. Withdrawal of a Private Ruling

Article 5. Publication of Private Rulings

Binding Private Rulings

Article 1.

  1. A taxpayer may apply to the tax authority for a private ruling setting out that tax authority’s position regarding the application of a tax law to a transaction which is proposed to be entered into by the taxpayer.

  2. An application under this Article must be in writing and:

    1. include full details of the transaction to which the application relates together with all documents relevant to the transaction;

    2. specify precisely the question on which the ruling is required; and

    3. give a full statement setting out the opinion of the applicant as to the application of the relevant tax law to the transaction.

  3. Subject to Article 2, the tax authority shall, within 60 days of receipt of the application under this Article, issue a private ruling on the question to the applicant.

  4. If the taxpayer has made a full and true disclosure of all aspects of the transaction relevant to the making of a private ruling and the transaction has proceeded in all material respects as described in the taxpayer’s application for the private ruling, the private ruling is binding on the tax authority as against the taxpayer identified but is not binding on the tax authority as against any other taxpayer.

  5. A private ruling is not binding on a taxpayer.

Refusing an Application for a Private Ruling

Article 2.

  1. The tax authority may refuse an application for a private ruling if any of the following applies:

    1. the tax authority has already decided the question that is the subject of the application in any of the following:

      1. a notice of a tax assessment served on the applicant;

      2. a notice or other guidance issued by the tax authority that is in force;

      3. a ruling published under Article 5 that is in force;

    2. the application relates to a question that is the subject of a tax audit in relation to the applicant or an objection lodged by the applicant;

    3. the application is frivolous or vexatious;

    4. the transaction to which the application relates has not been carried out and there are reasonable grounds to believe that the transaction will not be carried out;

    5. the applicant has not provided the tax authority with sufficient information to make a private ruling;

    6. in the opinion of the tax authority, it would be unreasonable to comply with the application, having regard to the resources needed to comply with the application and any other matters the tax authority considers relevant;

    7. the making of the ruling involves the application of a tax avoidance provision.

  2. The relevant tax authority must serve the applicant with a written notice of a decision to refuse to make a private ruling under this Article.

Making a Private Ruling

Article 3.

  1. The tax authority makes a private ruling by serving written notice of the private ruling on the recipient of the ruling.

  2. The tax authority may make a private ruling on the basis of assumptions about a future event or other matters as considered appropriate.

  3. A private ruling must state that it is a private ruling, set out the question ruled on, and identify the following:

    1. the taxpayer;

    2. the tax law relevant to the private ruling;

    3. the tax period to which the ruling applies;

    4. the transaction to which the ruling relates;

    5. any assumptions on which the ruling is based.

  4. A private ruling is made when the applicant is served with written notice of the ruling and the ruling remains in force until withdrawn under Article 4.

  5. A private ruling sets out the tax authority’s opinion on the question raised in the ruling application and is not a decision of the tax authority that can be formally reviewed, appealed or otherwise objected to, for the purposes of this law or any other law. For the avoidance of doubt, this Article does not limit in any way a taxpayer’s rights with respect to any tax assessment served on the taxpayer to which the ruling relates.

Withdrawal of a Private Ruling

Article 4.

  1. The tax authority may, for reasonable cause, withdraw a private ruling, in whole or part, by written notice served on the applicant.

  2. When legislation is passed that is inconsistent with an existing private ruling, the private public ruling is treated as withdrawn to the extent of the inconsistency.

  3. The withdrawal of a private ruling, in whole or part, has effect from:

    1. when paragraph (1) applies, the date specified in the notice of withdrawal; or

    2. when paragraph (2) applies, from the date of application of the inconsistent legislation.

  4. A private ruling that has been withdrawn:

    1. continues to apply to a transaction of the applicant commenced before the ruling was withdrawn; and

    2. does not apply to a transaction of the applicant commenced after the ruling was withdrawn to the extent the ruling is withdrawn.

Publication of Private Rulings

Article 5.

  1. The tax authority must publish a ruling made under Article 4 in the Gazette except that the identity of the applicant to whom the ruling relates must not be indicated in the publication.

  2. When a ruling has been withdrawn in accordance with section Article 4, the tax authority must immediately publish a notice of withdrawal in the Gazette stating that the ruling ceases to be binding with effect from the date determined under Article 4(3).


See the table in Appendix A prepared by the OECD containing comparative information on selected features of various international revenue rulings systems.


The OECD’s Glossary of Tax Terms defines advance rulings broadly as “a letter ruling, which is a written statement, issued to a taxpayer by tax authorities, that interprets and applies the tax law to a specific set of facts”; see


Class or product rulings that certain countries like Australia issue are thus a subset of public rulings as they set out how the tax law applies to a particular class of taxpayers or a particular type of investment arrangement.


See, for instance, discussion in the report of the Joint Committee of Taxation of the US Congress on the proposals that led to the publication of private letter rulings in the US: Joint Committee on Internal Revenue Taxation, Private letter rulings, September 24, 1975, available online here:


See OECD, Co-operative Compliance: A Framework: From Enhanced Relationship to Co-operative Compliance, OECD 2013.


Even in systems where adverse private tax rulings cannot be appealed directly, the taxpayer will be able to appeal the assessment made in accordance with the adverse ruling if the taxpayer proceeds with the transaction despite the adverse ruling.


While formally private rulings do not have precedential value beyond the taxpayer and the arrangement concerned, in practice they do have a wider precedential effect even if they are not published; see below.


Furthermore, to the extent that private rulings are published—albeit in a redacted form—the benefit of certainty and clarity they provide can be said to accrue at least to some extent to all taxpayers in the same or similar situation.


Again, this concern is mitigated by publishing rulings. Furthermore, even in the absence of a ruling practice tax authorities are constantly asked to take a position in the context of their audit and assessment activities, including in circumstances where the law is uncertain or unsettled. In fact, a ruling practice may reveal such uncertainties earlier on, allowing early intervention by the lawmaker where necessary or appropriate.


See Commission decides selective tax advantages for Fiat in Luxembourg and Starbucks in the Netherlands are illegal under EU state aid rules, IP/15/5880; State aid: Commission concludes Belgian “Excess Profit” tax scheme illegal; around €700 million to be recovered from 35 multinational companies, IP/16/42. Investigations are still ongoing in relation to Amazon and McDonald’s in Luxembourg and Apple in Ireland; see State aid: Commission investigates transfer pricing arrangements on corporate taxation of Apple (Ireland) Starbucks (Netherlands) and Fiat Finance and Trade (Luxembourg), IP/14/663; State aid: Commission investigates transfer pricing arrangements on corporate taxation of Amazon in Luxembourg, IP/14/1105; State aid: Commission opens formal investigation into Luxembourg’s tax treatment of McDonald’s, IP/15/6221.


While not all the features discussed here are necessarily regulated in a country’s formal ruling procedure, they are common. For instance, while the Belgian private ruling regime does not stipulate that the tax authority must notify the applicant of an impending positive or negative decision, this is de facto what happens through an informal ‘pre-filing’ phase; see Belgian Court of Auditors, below note 17.


In most countries private tax rulings are issued by the tax authority. A notable exception is Sweden where private rulings are issued by a body independent from the tax administration. Both models correspond to two different views of the nature of advance rulings, i.e. as ex ante tax assessments (thus by the tax authority) on the one hand or ex ante judgments (thus by an independent body) on the other hand.


Even if not all members of this office are physically stationed at central headquarters.


This is typically the case even where advance rulings do not have legal binding force in law. For instance, the CRA considers itself bound by the rulings it issues despite the Canadian ruling practice not being based on a legal framework stipulating that rulings are legally binding on CRA.


This may be more contentious in some systems. Where the applicant knew or should have known that the ruling was ‘contra legem’, however, the person would ordinarily be precluded from relying on the ruling.


See below note 20 and 21.


See, for instance. Belgian Court of Auditors (Cour des Comptes/Rekenhof) Advance Tax Rulings Service, Report to the House of Representatives, February 2013, available online at


See below note 21.


For instance, in the US, the IRS and the state revenue services do not systematically share private letter rulings. However, and to the extent relevant to determine their respective tax bases, there is a legal basis and mechanism in place that would allow for such information to be shared on request. Of course, it generally depends on a country’s particular fiscal federalism arrangements—in particular with respect to determining tax bases and administering taxes at federal and state levels—whether it is relevant that rulings be shared between different levels of government within the same country.


Within the context of the OECD/G20 BEPS Project countries have also committed to implementing a framework for compulsory spontaneous exchange of information on six categories of rulings, i.e. (i) rulings relating to preferential regimes; (ii) unilateral APAs or other cross-border unilateral rulings in respect of transfer pricing; (iii) cross-border rulings providing for a downward adjustment of taxable profits; (iv) permanent establishment (PE) rulings; (v) related party conduit rulings; and (vi) any other type of ruling agreed by the Forum on Harmful Tax Practices that in the absence of spontaneous information exchange gives rise to BEPS concerns; see OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report.


See, for example, the recently adopted Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L332, 18.12.2015, p. 1–10), which introduces a framework for automatic exchange of advance cross-border rulings and advance pricing agreements between EU member states and the European Commission from January 1, 2017 onwards.


The OECD initiative specifically focuses on rulings pertaining to preferential tax regimes and other arrangements which impact or are likely to impact the tax position in one or more other countries, and adopts an approach based on mandatory spontaneous exchange (see above note 20). The EU initiative, on the other hand, includes all intra-EU cross-border tax rulings issued by member states and adopts an approach based on automatic exchange coordinated through the EU Commission (see above note 21).


The authors acknowledge the benefit of the comments and thoughts of each of Michael Keen, Peter Barrand and Martin Grote of the IMF’s Fiscal Affairs Department.