Class Ruling CR 2015/61
Date of effect: 1 July 2015

What this ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the relevant provisions identified below apply to the defined class of entities, who take part in the scheme to which this Ruling relates. Relevant provision(s) 2. The relevant provisions dealt with in this Ruling are: Class of entities 3. The class of entities to which this Ruling applies are the Rural Fire Brigades in Queensland that are registered by the Commissioner of Queensland Fire and Emergency Services under section 79 of the Fire and Emergency Services Act 1990 (QLD) (FESA 1990). Qualifications 4. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 7 to 9 of this Ruling. 5. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then:

Class of entities or scheme: 3. The class of entities to which this Ruling applies are the Rural Fire Brigades in Queensland that are registered by the Commissioner of Queensland Fire and Emergency Services under section 79 of the Fire and Emergency Services Act 1990 (QLD) (FESA 1990). | Qualifications: 4. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 7 to 9 of this Ruling. 5. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 6. This Ruling applies from 1 July 2015 to 30 June 2025. The Ruling continues to apply after 30 June 2025 to all entities within the specified class who entered into the specified scheme during the term of the Ruling. However, this Ruling will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). 7. The following description of the scheme is based on information provided by the applicant. 8. Queensland Rural Fire Brigades are governed by the provisions of the FESA 1990. 9. The key provisions of the FESA 1990 are: 10. The relevant commissioner for the purposes of FESA 1990 is the Commissioner of Queensland Fire and Emergency Services (FES Commissioner). 11. The FES Commissioner has established Business Rules for conducting the business of registered Rural Fire Brigades, and has set up Brigade Management Rules for the governance of Rural Fire Brigades. 12. All Rural Fire Brigades are required to follow the Business Rules, and adopt the Brigade Management Rules. | Section 50-1 of the ITAA 1997: Queensland Rural Fire Brigades are exempt from income tax: 13. Queensland Rural Fire Brigades are exempt from income tax under section 50-1 of the ITAA 1997 on the basis that they are exempt entities under item 5.2 of the table in section 50-25 of the ITAA 1997; they are public authorities constituted under an Australian law. Commissioner of Taxation 12 August 2015 | Queensland Rural Fire Brigades are exempt from income tax under section 50-1 of the ITAA 1997: 14. Section 50-1 of the ITAA 1997 states that: The ordinary income and statutory income of the entities covered by the following tables is exempt from income tax. In some cases, the exemption is subject to special conditions. 15. The table in section 50-25 provides the following: 16. The tax legislation does not define the term 'public authority' or the expression 'constituted under'. The High Court has considered the meaning of 'public authority' and 'constituted under' in the context of paragraph 23(d) of the Income Tax Assessment Act 1936; the precursor to item 5.2 of the table in section 50-25. | Public Authority: 17. In The Incorporated Council of Law Reporting for the State of Queensland v. Federal Commissioner of Taxation (1924) 34 CLR 580 (Incorporated Council), Isaacs J, in the course of argument by counsel, made the following comments on the meaning of 'public authority': 18. The comments of Isaacs J were followed by Webb J in Renmark Hotel Inc v. Federal Commissioner of Taxation (1949) 79 CLR 10 (at 24) (Renmark Hotel). Also in Renmark Hotel, Latham CJ made the following comments in deciding that the hotel was not a 'public authority': 19. McTiernan J in the same case stated: 20. In Western Australia Turf Club v. Federal Commissioner of Taxation (1978) 139 CLR 288 (WA Turf), Stephen J provided the following observations on the meaning of 'public authority' (Barwick CJ and Jacobs J agreeing): 21. And at 297: | Constituted under: 22. In Renmark Hotel, Rich J, at first instance, gave the following commentary of the meaning of 'constituted': 23. In WA Turf, Barwick CJ, after accepting that an unincorporated body may be constituted as a public authority under a statute, without having derived its existence from a statutory source, stated that: 24. Also in WA Turf, Stephen J (Jacobs J agreeing) made the following comments on the meaning of 'constituted under': 25. A Rural Fire Brigade is not established by the FESA 1990. Rather, any group of persons can apply to the FES Commissioner to be registered as a Rural Fire Brigade (section 79 of FESA 1990). On registration a Rural Fire Brigade is given an area in which the brigade is in charge of fire fighting and fire prevention (subsection 82(2) of FESA 1990). A Rural Fire Brigade must elect a First Officer to be in charge of the brigade (section 81 of FESA 1990). The First Officer is given the powers of an Authorised Officer in carrying out the functions under subsection 82(2), and may direct and control any person whose services are available (subsection 83(1) of FESA 1990). The powers exercisable by the First Officer may be exercised by any person acting at the direction of the First Officer (subsection 83(2) of FESA 1990). 26. The powers of an Authorised Officer in dangerous situations (ie. fire or hazardous materials emergency), include (section 53 of FESA 1990): 27. The powers of an Authorised Officer for preventative or investigative purposes include (subsection 55(1) of FESA 1990): 28. Subsection 55(2) of the FESA 1990 provides that the powers of entry in section 55(1) cannot be exercised by an Authorised Officer wanting to access a dwelling, unless the occupier of the dwelling has given approval to enter. 29. Under FESA 1990, a Rural Fire Brigade is vested with powers and functions of a public nature not ordinarily possessed by citizens. The functions vested under FESA 1990 are the only functions of each Brigade. A Brigade can make rules relating to the conduct of its operations, but any such rules must be approved by the FES Commissioner to have effect. The structure of the FESA 1990 makes it impossible for a registered Rural Fire Brigade to undertake activities outside the scope of fire fighting and fire prevention. The Brigades are constituted as public authorities. 30. As such, a registered Rural Fire Brigade is a public authority for the purposes of section 50-25 of the ITAA 1997, and its income will be exempt from income tax pursuant to section 50-1 of the ITAA 1997. 31. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Ruling: Section 50-1 of the ITAA 1997: Queensland Rural Fire Brigades are exempt from income tax: 13. Queensland Rural Fire Brigades are exempt from income tax under section 50-1 of the ITAA 1997 on the basis that they are exempt entities under item 5.2 of the table in section 50-25 of the ITAA 1997; they are public authorities constituted under an Australian law. Commissioner of Taxation 12 August 2015


Appendix: Queensland Rural Fire Brigades are exempt from income tax under section 50-1 of the ITAA 1997: 14. Section 50-1 of the ITAA 1997 states that: The ordinary income and statutory income of the entities covered by the following tables is exempt from income tax. In some cases, the exemption is subject to special conditions. 15. The table in section 50-25 provides the following: 16. The tax legislation does not define the term 'public authority' or the expression 'constituted under'. The High Court has considered the meaning of 'public authority' and 'constituted under' in the context of paragraph 23(d) of the Income Tax Assessment Act 1936; the precursor to item 5.2 of the table in section 50-25. | Public Authority: 17. In The Incorporated Council of Law Reporting for the State of Queensland v. Federal Commissioner of Taxation (1924) 34 CLR 580 (Incorporated Council), Isaacs J, in the course of argument by counsel, made the following comments on the meaning of 'public authority': 18. The comments of Isaacs J were followed by Webb J in Renmark Hotel Inc v. Federal Commissioner of Taxation (1949) 79 CLR 10 (at 24) (Renmark Hotel). Also in Renmark Hotel, Latham CJ made the following comments in deciding that the hotel was not a 'public authority': 19. McTiernan J in the same case stated: 20. In Western Australia Turf Club v. Federal Commissioner of Taxation (1978) 139 CLR 288 (WA Turf), Stephen J provided the following observations on the meaning of 'public authority' (Barwick CJ and Jacobs J agreeing): 21. And at 297: | Constituted under: 22. In Renmark Hotel, Rich J, at first instance, gave the following commentary of the meaning of 'constituted': 23. In WA Turf, Barwick CJ, after accepting that an unincorporated body may be constituted as a public authority under a statute, without having derived its existence from a statutory source, stated that: 24. Also in WA Turf, Stephen J (Jacobs J agreeing) made the following comments on the meaning of 'constituted under': 25. A Rural Fire Brigade is not established by the FESA 1990. Rather, any group of persons can apply to the FES Commissioner to be registered as a Rural Fire Brigade (section 79 of FESA 1990). On registration a Rural Fire Brigade is given an area in which the brigade is in charge of fire fighting and fire prevention (subsection 82(2) of FESA 1990). A Rural Fire Brigade must elect a First Officer to be in charge of the brigade (section 81 of FESA 1990). The First Officer is given the powers of an Authorised Officer in carrying out the functions under subsection 82(2), and may direct and control any person whose services are available (subsection 83(1) of FESA 1990). The powers exercisable by the First Officer may be exercised by any person acting at the direction of the First Officer (subsection 83(2) of FESA 1990). 26. The powers of an Authorised Officer in dangerous situations (ie. fire or hazardous materials emergency), include (section 53 of FESA 1990): 27. The powers of an Authorised Officer for preventative or investigative purposes include (subsection 55(1) of FESA 1990): 28. Subsection 55(2) of the FESA 1990 provides that the powers of entry in section 55(1) cannot be exercised by an Authorised Officer wanting to access a dwelling, unless the occupier of the dwelling has given approval to enter. 29. Under FESA 1990, a Rural Fire Brigade is vested with powers and functions of a public nature not ordinarily possessed by citizens. The functions vested under FESA 1990 are the only functions of each Brigade. A Brigade can make rules relating to the conduct of its operations, but any such rules must be approved by the FES Commissioner to have effect. The structure of the FESA 1990 makes it impossible for a registered Rural Fire Brigade to undertake activities outside the scope of fire fighting and fire prevention. The Brigades are constituted as public authorities. 30. As such, a registered Rural Fire Brigade is a public authority for the purposes of section 50-25 of the ITAA 1997, and its income will be exempt from income tax pursuant to section 50-1 of the ITAA 1997.


What this Ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | a public authority constituted under an Australian law | I can only understand their constitution as a public authority by the exercise of some statutory power authorizing them to act on behalf of the public of the State. (at 585) | ...the appellant company is not given any power or authority by law in the form of a State statute to do any acts in relation to the public which otherwise would be beyond its power or unauthorized... In my opinion, the appellant company does not perform any statutory duties or exercise any public functions. (at 23) | It is necessary that an entity which claims to be a public authority for the purpose of this provision of the Income Tax Assessment Act should ... be given by statute powers or duties to be exercised for public objects. (at 23) | The Club has ever since been involved in this exercise of powers and functions not possessed by the ordinary citizen and which have been conferred by statute and are essentially of a public nature. Were these powers and functions vested in some State authority created for that purpose and having no other function it would, I think, clearly enough be a public authority for the purposes of section 23(d) of the Act. However, to confer a public function and powers exercisable in the public interest upon a body which has previously carried on, and will continue to carry on distinct activities not in themselves characteristic of a public authority may not suffice to confer upon its revenue the immunity which s. 23(d) affords. (at 294-295) | In the case of s. 23(d), the possession of some statutory duties or powers is not, I think, enough to attract the income of a body the exemption from income tax which the paragraph confers unless, upon examination of all characteristics, the body can be seen in general to conform to the common understanding of a public authority. In such an examination, in view of the indefinite nature of the term 'public authority', it will perhaps be profitable... to adopt an 'essentially negative method', looking for features clearly alien to the concept of what is a public authority and judging to what degree those features are pervasive and important. It will also be relevant to bear in mind the present statutory context... | The word 'constituted' is not the same as 'incorporated'. For the purposes of s.23 (d) it is conceivable that an unincorporated body might be constituted under a State Act so as to satisfy the exemption. On the other hand, mere incorporation under an Act does not constitute the body. The word 'constituted' immediately follows 'public authority'. It means constituted as a public authority. (at 19) | ... it must indeed be a rare that an unincorporated body becomes a public authority by reason of statutory powers or functions given to it. Rich J's remark that such a result was 'conceivable' rather suggests the rarity of the occasion. (at 290) | It is clear ... that an entity need not from its origin have possessed those qualities which at the relevant date make it a public authority; it may acquire the necessary attributes subsequently and if it does so as a result of legislation it will thereupon have become a public authority. (at 293) | Appendix 2 - Detailed contents list


Related rulings: IT 2632 TR 2006/10
Legislative references: ITAA 1997 ITAA 1997 50-1 ITAA 1997 50-25 Fire and Emergency Services Act 1990 (QLD) 79 TAA 1953
Case references: Renmark Hotel Inc v. Federal Commissioner of Taxation (1949) 79 CLR 10
Subject references: Income tax exemption Exempt entities Public Authority