Taxes are as complex as life itself. While tax authorities face the challenge of collecting the proper amount of taxes, taxpayers would always measure the incentives and costs of complying with tax laws. In most cases, tax conflicts arise from different interpretations of tax statutes by different parties. The problem is aggravated by frequent changes in tax laws. One cannot neglect the problem of tax uncertainty given the magnitude and impacts of tax disputes.
Mature tax systems around the world have enshrined in their tax laws the advanced tax ruling system as a measure to reduce tax disputes that may arise from the interpretation of tax statutes. Tax rulings are formal legal opinions that a taxpayer or a class of taxpayers can obtain from the relevant Revenue Authority regarding a particular set of transactions or facts.
