Final ruling on charter boats provides industry certainty

by ATO & CBISC Joint Press Release on 22 May 2003 Charter boat operators now have certainty on how the tax law applies to their businesses following today’s release of a final tax ruling for the industry.

Tax Commissioner Michael Carmody said industry has welcomed the ruling which means boat owners legitimately attempting to run a profitable business now have clarity on tax deductions.

“Extensive consultation during the ruling process has led to an outcome that allows for a sustainable charter boat industry while maintaining the integrity of the tax law,” Mr Carmody said.

Chair of the Charter Boat Industry Survival Campaign (CBISC), Sherry Donaldson, said she was satisfied the final ruling would have the support of the vast majority of stakeholders in the charter boat industry.

“It’s a fair and reasonable result. Provided it is implemented in good faith by the industry and the Tax Office, it will enable charter boat businesses to continue as significant employers and contributors to regional tourism and boat manufacturing around the country,” Ms Donaldson said.

“This ruling demonstrates an understanding by the Tax Office of how the industry operates. It also provides taxpayers in the charter boat industry with the certainty they’ve sought on the Tax Office’s view of the law’s operation in relation to these activities.”

“Examples in the ruling provide valuable guidance to boat owners and will help to distinguish between the vast majority of legitimate stakeholders and those few who may have operated on the fringe of the industry with less than businesslike motives.”

Ms Donaldson paid tribute to all involved in the discussions leading to the final ruling.

“There has been good faith on both sides, and this has been underpinned on the industry side by a committed, united, and most of all, patient group of stakeholders,” Ms Donaldson said.

As well as agreement on the ruling the charter boat industry has agreed to –

- undertake a restructure that will assist boat owners to meet tax obligations and be allowed deductions;
- work with the Tax Office to create an industry ‘code of conduct’; and
- an audit program starting in 2003/04 to test the arrangements that have been put in place.

The ruling is on the Tax Office website www.ato.gov.au. Click on Legal Database, then ‘Updates’.