What is the significance of "informal guidance" in the ATO Green Book?

"Informal guidance" in the ATO Green Book serves as a valuable resource for taxpayers, providing insights and clarity on the ATO's interpretation of tax laws and regulations. It is important to understand that while this guidance can help individuals and businesses understand how the ATO might view certain tax matters, it does not carry the same legal weight as binding rulings.

The significance of informal guidance lies in its role as a tool for helping taxpayers navigate the complexities of tax legislation. It can assist in informing decisions and encouraging compliance by offering interpretations and practical examples. However, since it is not legally binding, it does not guarantee a specific outcome if a taxpayer were to be audited or challenged by the ATO.

This distinction is crucial for taxpayers and their advisors, as they need to rely on formal legal advice or binding rulings for situations where definitive legal authority is required. Understanding the informal guidance can supplement knowledge, but it should not replace professional legal counsel or formal rulings when making significant tax decisions.