FSMC, TITLE 54.  TAXATION AND CUSTOMS

CHAPTER 8
Revenue Administration
[FOR REFEREENCE ONLY]

Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.

Section 1 of PL 17-83 states:

Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:

§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.

PL 17-83 was signed into law by Vice President Alik L. Alik on April 19, 2013.

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SUBCHAPTER IX
Rulings
[FOR REFEREENCE ONLY]

SECTIONS

§ 855. Binding public rulings.
§ 856. Making a public ruling.
§ 857. Withdrawal of a public ruling.
§ 858. Binding private rulings.
§ 859. Refusing an application for a private ruling.
§ 860. Making a private ruling.
§ 861. Withdrawal of a private ruling.
§ 862. Publication of private rulings.

Editor’s note: This version of chapter 8 of this title is included here for reference only, as at the time of this codification the provisions of section 87, that set forth codified section 934 of PL 17-50, as amended by section 1 of PL 17-83, made this Act null and void.

Section 1 of PL 17-83 states:

Section 1. Section 934 of title 54 of the Code of the Federated States of Micronesia, as enacted by Public Law No. 17-50, is hereby amended to read as follows:

§ 934. If any of the four states of the Federated States of Micronesia have not passed into law value added tax legislation as of midnight July 19, 2013, this act is null and void.

Section 49 of PL 17-50 added a subchapter IX of chapter 8 entitled Rulings.

§ 855. Binding public rulings.

(1) The CEO may make a public ruling in accordance with section 856 of this title setting out the CEO’s interpretation on the application of a revenue law.

(2) A public ruling made in accordance with section 856 of this title is binding on the CEO until withdrawn.

(3) A public ruling is not binding on a taxpayer.

Source: PL 17-50 § 50.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 881 to 855 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 856. Making a public ruling.

(1) The CEO shall print and maintain a gazette or other publication of public rulings to be made available free of charge to the public. The CEO shall make a public ruling by publishing a notice of the ruling in such gazette.

(2) A public ruling must state that it is a public ruling and have a number and subject heading by which it can be identified.

(3) A public ruling applies from the date specified in the ruling and if no date is specified, from the date of publication in the gazette identified in subsection (1) of this section.

Source: PL 17-50 § 51.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 882 to 856 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 857. Withdrawal of a public ruling.

(1) The CEO may withdraw a public ruling, in whole or part, by publishing notice of the withdrawal in the gazette identified in section 856 of this title.

(2) If legislation is passed, or the CEO makes another public ruling, that is inconsistent with an existing public ruling, the existing ruling is treated as withdrawn to the extent of the inconsistency.

(3) The withdrawal of a public ruling, in whole or part, has effect:

(a) if subsection (1) of this section applies, from the date specified in the notice of withdrawal and if no date is specified, from the date notice of the withdrawal is published in the gazette; or

(b) if subsection (2) of this section applies, from the date of application of the inconsistent legislation or public ruling.

(4) A public ruling that has been withdrawn in whole or in part:

(a) continues to apply to a transaction commenced before the public ruling was withdrawn; and

(b) does not apply to a transaction commenced after the ruling was withdrawn to the extent that the ruling is withdrawn.

Source: PL 17-50 § 52.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 883 to 857 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 858. Binding private rulings.

(1) Subject to section 859 of this title, the CEO shall, upon application in writing by a taxpayer, issue to the taxpayer a private ruling setting out the CEO’s position regarding the application of a revenue law to a transaction entered into, or proposed to be entered into, by the taxpayer.

(2) 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 ruling, the ruling is binding on the CEO in relation to the taxpayer.

(3) A private ruling is not binding on the taxpayer to whom it is issued.

(4) If a private ruling is inconsistent with an existing public ruling, the private ruling has priority to the extent of the inconsistency.

Source: PL 17-50 § 53.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 884 to 858 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 859. Refusing an application for a private ruling.

(1) The CEO may refuse an application for a private ruling if:

(a) the CEO has already decided the matter that is the subject of the application in a tax assessment;

(b) the CEO is of the opinion that an existing public ruling adequately covers the matter that is the subject of the application;

(c) the application relates to a matter that is the subject of a tax audit or an objection;

(d) the application is frivolous or vexatious;

(e) the arrangement to which the application relates has not been carried out and there are reasonable grounds to believe that it will not be carried out;

(f) the applicant has not provided the CEO with sufficient information to make a private ruling; or

(g) in the opinion of the CEO, it would be unreasonable to comply with the application having regard to the resources needed to comply and any other matters the CEO considers relevant, such as disadvantage to other taxpayers.

(2) The CEO shall serve the applicant with a written notice of the refusal to make a private ruling.

Source: PL 17-50 § 54.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 885 to 859 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 860. Making a private ruling.

(1) The CEO must make a private ruling unless section 859 of this title applies.

(2) The CEO makes a private ruling by serving written notice of the ruling on the applicant.

(3) The CEO may make a private ruling on the basis of assumptions about a future event or other matter as considered appropriate.

(4) A private ruling must set out the matter ruled on identifying:

(a) the taxpayer;

(b) the revenue law relevant to the ruling;

(c) the tax period to which the ruling applies;

(d) the arrangement to which the ruling relates;
and

(e) any assumptions on which the ruling is based.

(5) A private ruling is made at the time the applicant is served with notice of the ruling and remains in force for the period specified in the ruling.

(6) The making of a private ruling is not a tax decision for the purposes of this chapter.

Source: PL 17-50 § 55.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 886 to 860 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 861. Withdrawal of a private ruling.

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

(2) If legislation is passed, or the CEO publishes a public ruling, that is inconsistent with a private ruling, the private ruling is treated as withdrawn to the extent of the inconsistency.

(3) The withdrawal of a private ruling, in whole or part, has effect:

(a) if subsection (1) of this section applies, from the date specified in the notice of withdrawal; or

(b) if subsection (2) of this section applies, from the date of application of the inconsistent legislation or public ruling.

(4) A private ruling that has been withdrawn:

(a) continues to apply to a transaction commenced before the ruling was withdrawn; and

(b) does not apply to a transaction commenced after the ruling was withdrawn to the extent that the ruling is withdrawn.

(5) A decision to withdraw a private ruling is not a tax decision for the purposes of this chapter.

Source: PL 17-50 § 56.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 887 to 861 to allow all of the sections in this chapter to have eight hundred section numbers.

§ 862. Publication of private rulings.

The CEO shall include in the gazette or other publication referred to in section 856(1) of this title an edited version of a binding private ruling issued to a taxpayer. The edited version must not disclose the identity of the taxpayer.

Source: PL 17-50 § 57.

Editor’s note: The sections of this chapter were numbered such that all of the sections were not numbered in the eight hundreds, but were also numbered in the nine hundreds. This created a problem because some of the nine hundred section numbers were already designated by chapter 9 of this title. This section was therefore renumbered from 888 to 862 to allow all of the sections in this chapter to have eight hundred section numbers.