ATO ID 2005/64: Commissioner's Discretion: deferring due date for issuing distribution statements
Date of decision: 17 February 2005
Year of income: Year ended 30 June 2004
Business line: Private Groups and High Wealth Individuals

Issue
Will the Commissioner exercise his discretion under subsection 388-55(1) of the Taxation Administration Act 1953 (TAA) to defer the time by which a corporate tax entity must issue a distribution statement?

Decision
No. The Commissioner will not exercise his discretion under subsection 388-55(1) of the TAA to defer the time by which a corporate tax entity must issue a distribution statement.

Facts
The corporate tax entity is a public trading trust and an Australian resident for income tax purposes. Its first distribution was paid to its unit-holders on 19 March 2004. No distribution statement was issued to unit holders on or before 19 March 2004 because the trustee mistakenly thought the public trading trust was treated as a private company for income tax purposes.

Reasons for decision
Summary: Under subsection 202-75(1) of the Income Tax Assessment Act 1997 (ITAA 1997), an entity that makes a frankable distribution must give the recipient a distribution statement. A public company is required to do this on or before the day on which the distribution is made. The public trading trust, which is considered to be a public company for the purposes of the simplified imputation system, has to date not complied with this obligation. Under subsection 388-55(1) of the TAA, the Commissioner 'may defer the time within which an approved form is required to be given to the Commissioner or to another entity'. Under subsection 202-80(2) of the ITAA 1997 the distribution statement is required to be in an approved form, as defined in section 388-50 of the TAA. Subsection 388-55(1) of the TAA refers to an approved form that 'is required to be given' rather than one that was required to have been given. Although the distribution statement has not yet been given, a mistake as to the status of the corporate tax entity is not a sufficient reason and the Commissioner does not consider it appropriate in this instance to exercise his discretion under subsection 388-55(1) of the TAA to retrospectively defer the time within which the distribution statement is required to be given. However, should the entity at a later time provide the relevant distribution statements in the approved form, it will be taken to have complied with its obligations under section 202-75 of the ITAA 1997, albeit at a later time than required.

Legislative references: Income Tax Assessment Act 1997 section 202-75 section 202-80
Subject references: Commissioner's discretion Distributions