Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
Michael D'Ascenzo, Second Commissioner of Taxation
May 2004
Making choices is necessary under any risk management approach. Choices have to be made for example:
- In connection with the new Consolidation regime:
- For corporate governance purposes; and
- In the Commissioner's approach to the administration of the tax laws (and proposed legislative amendments).
These choices require the exercise of judgment and the balancing of a variety of technical, practical and risk factors. As there is often a tension between the factors, the task is not necessarily an easy one.
In the initial stages of what will be an on-going process of providing guidance on this legislative initiative the ATO used the Consolidations Reference Manual as the primary source. This has proven to be an efficient and effective tool and we will continue to add material to it. So far we have also published a Taxation Ruling and three Taxation Determinations as well as a number of ATO IDs on Consolidation issues.
There are also administrative guidelines in other ATO informational products, for example, in relation to receivables management matters.
Of course we need to continue to provide clear guidance on how we see this very important area of the law operating in practice and we intend to publish a number of significant Taxation Rulings and Taxation Determinations in the coming months.
The topics have been identified in consultation with the business and adviser community through the Consolidation Sub-committee of the NTLG and scoping meetings with Sub-committee members on the contents of the proposed Rulings were conducted in Melbourne last week.
Our purpose is to provide the Commissioner's position on some fundamental components of the Consolidation legislation, within the Taxation Rulings and Determinations framework and in some cases expand on material already published in the Consolidations Reference Manual.
Each Taxation Ruling will set out the primary underlying concepts and principles of the matters under consideration. They will also contain examples to illustrate the practical application of the concepts and principles.1
As an adjunct, the Taxation Determinations will deal with the application of the principles set out in the Rulings to specific factual situations.
The subject areas to be covered by the proposed Rulings are:
- the Single entity rule;
- what is an asset and how is it treated for Consolidation purposes;
- what is a liability and how is it treated for Consolidation purposes;
- CGT event L-7; and
- capital injections and their treatment under the Consolidation regime.
You can expect draft rulings to be published in June/July after they have been through our normal Public Rulings Panel processes and final Rulings to issue thereafter once the full consultation process has been undertaken.
Prior to that, there will be some draft Taxation Determinations issued in respect of some accrued profit matters including, for example, whether s.705-90(6)(b) (i.e., owned profits recouping owned losses) encompasses losses transferred to a joining entity before the joining time.
We propose that the Ruling will be built around four main blocks:
- What is the rule?
- When does it apply?
- How does it apply?
- Specific interactions and examples to illustrate the application of the rule will be included and a series of Determinations will be issued dealing with other specific situations.
Issues covered may include:
- what is the scope and extent of application of the single entity rule?;
- what is the "Divisional model" approach for making sense of the single entity rule?;
- what might a "Divisional model" mean in practice?;
- what does the single entity rule and other core rules mean for the characterisation of specific transactions as well as the business of the group?;
- where and how does the single entity rule connect to other elements of the income tax code (for example, where do we see the nexus with the CGT demerger and debt/equity provisions)?; and
- are joining and leaving events seamless, or does the law imply some specific points on either side that are used in applying the law in practice?
Areas to be covered include:
- what is an asset? (i.e., a conceptual definition);
- how does recognition of something as an asset by the tax code or by statements of accounting concepts influence what is an asset for consolidation purposes?;
- what is the significance of something capable of having a commercial value to its recognition as an asset?;
- what impact does the ability to move assets around a consolidated group have?;
- the significance and consequences of changes in statements of accounting concepts and accounting standards to treatment of assets for consolidation purposes; and
- to what extent is a consideration of the treatment on disposal (e.g., for CGT purposes) relevant to deciding whether something is an asset?
Areas to be covered include:
- the conceptual idea of a liability;
- the significance of recognition under the tax code and/or accounting concepts;
- the significance of the statutory linkage to Corporations Law; and
- the significance and application of pronouncements of accounting standards and urgent issues as determinant of the definition and treatment of liabilities under the Consolidation regime.
The questions that define the scope of the ruling on liabilities deal with 705-70(1):
- What does "…adding up the amounts of each thing (an accounting liability)…" mean?
- What does "adding up each thing …at the joining time" mean?
- Does "… in accordance with *accounting standards or statements of accounting concepts…" operate to provide choice to the joining entity?
- Does "… in accordance with *accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board,…" act to excluded other parts of the accounting construct such as UIG Abstracts?
- What does "…is a liability at the joining time …" mean?
- What does "...is a liability… that can or must be recognised…" mean?
- What does "…that can or must be recognized in the entity's statement of financial position" mean?
Areas to be covered (although some matters might be dealt with in separate Taxation Determinations) include:
- Does the application of CGT event L7 require a full reconstruction of the allocable cost amount at the joining time?
- At what point in time is a liability 'discharged' for the purposes of CGT event L7?
- What constitutes a 'discharge' for the purposes of CGT event L7?
- CGT event L7 and the implications of liabilities subject to reductions/adjustments under sections 705-75 and 705-80 of the ITAA 1997 at the joining time.
- Does CGT Event L7 apply to amounts that accrue post the joining time?
- Does CGT Event L7 apply to the discharge of policy liabilities relating to the investment business of life insurers?
- Does CGT Event L7 apply to the discharge of a life insurance policy liability that is the subject of a reinsurance contract?
The following issues may be dealt with:
- Does the term "injection" require a physical inflow of funds?
- What is meant by the term "capital" - does it take its ordinary meaning?
- An 'injection of capital' event is one of two events that need to be considered for the purposes of the integrity rule - should non-arm's length transactions also be considered - paragraph 707-325(4(1)(b)? Is this paragraph an integrity rule or an anti-avoidance provision subject to a purpose test?
- Initial or 'start-up' capitalisations of shelf companies to be subject to the integrity rule?
- Pre-loss capitalisations to be subject to the rule?
- Compulsory capital injections due to other legislative requirements e.g., minimum capital requirements as per APRA rules;
- Do debt:equity swaps fall within the meaning of injection of capital?
- The impact of capital injections that are greater than the market value of the loss entity at the consolidation date.
This is an ambitious project, and the continued assistance and support of the NTLG sub-committee would be appreciated. It may be that as we delve into the detail of the legislation and the technical and practical issues that there will be an on-going need to monitor priorities and to adjust project deliverables. I trust that we will benefit from constructive input and feedback on the technical merit of the ATO's interpretation of Parliament's Consolidation rules.
The Commissioner's administration of the tax laws includes not only assessment of liabilities in accordance with the law, but also more generally the good management of the tax system. In implementing the law, the approach taken by the ATO is a purposive approach as required under section 15AA of the Acts Interpretation Act 1901. This allows the Commissioner to have regard to the full context of a measure so as to construe the words used by Parliament in a way that produces the legislative intent. The mischief aimed at by the legislation, the existing industry practice including changes that the new measure is intended to change or continue, and approaches that facilitate practical compliance are taken into account in determining which construction of a provision is to be preferred. Naturally these issues are also taken into account in the ATO's input to the law design process. This approach will be adopted in circumstances where the Commissioner is required to interpret the Consolidation regime.
Recently the National Tax Liaison Group asked whether the ATO could do more than interpret legislation in this purposive way. They suggested an administration approach akin to the notion of extra-statutory concessions which operates in the UK tax environment. The ATO's response has been to consider whether the practice which operates in the UK adds anything or is different to the purposive approach we adopt in Australia. In doing so we also looked to the approach of our colleagues in the Inland Revenue in New Zealand where we found that legislative guidance is given to the Commissioner there about what may be taken into account in delivering practical compliance outcomes in tax administration. While in the UK, the "power" to offer practical compliance solutions is not embodied in any specific provisions in the Acts the Commissioners administer, it has a long history of support in the case law. In the Australian context we also need to be mindful of responsibilities under the Taxation Administration Act and the Financial Management and Accountability Act which require that the Commissioner apply ATO resources in an efficient, effective and ethical way.
This is an interesting request for two reasons. Firstly, it was not long ago that the accepted rhetoric was that in trying to make the tax system work, the Commissioner was not paying sufficient regard to the tax law.
This is a serious claim because of "the paramount need to maintain the integrity of the tax system, both in terms of its architecture and its administration"2
A ubiquitous creation of a tax "lore" through administrative practices that ends up usurping the tax law, is likely to deliver less certainty for taxpayers in the long run. No matter how "well intentioned"3 the actions of the administrator be, innovative taxpayer approaches that seek to extend administration guidance to circumstances never intended, ultimately come unstuck.4
It is with the interests of taxpayer certainty in mind, and with a view to promoting a coherent fabric of tax law (subject to the words used by Parliament), that the ATO has, with the assistance of its various Public Rulings Panels, tried to ensure high levels of integrity for its public rulings.5
Public rulings set out the Commissioner's view of the law, but do not have the authority to make the law so as to bind taxpayers. Indeed the legislative scheme for public rulings requires "that the issue of a public ruling is to be made in accordance with the Act as interpreted by the Commissioner and not in accordance with some practice which the Commissioner may have adopted, to the extent that that is inconsistent with the Assessment Act"6.
It is also relevant to note that the extent of the Commissioner's administration power has not been authoritatively determined:
"In the United Kingdom compromises entered into by the Commissioners have been upheld on the "care and management" basis, in circumstances where the Commissioners have foregone a claim to outstanding past tax where it would be counter-productive in terms of cost to attempt to recover the tax. See the Street Casuals Case.7 If Australian courts take the same approach, it will be for the reasons given by Lord Roskill (excessive cost to the revenue), not for the reasons given by Lord Scarman (which include the duty to act fairly).
Whether the Australian courts would follow other examples of judicial review of taxation decisions in England is by no means clear. Australian courts might be less inclined to uphold extra-statutory concessions made by the revenue authorities and would, I think, be disposed to give greater weight to the statute, recalling that the very basis for judicial review is statutory ultra vires.
Present indications are that the High Court of Australia would find it difficult to accept the reasoning in ex parte Preston8 and for the reason that the High Court considers that legitimate expectation and estoppel have a limited part to play in public law. Underlying this approach again is the paramount importance of the statute and the limits it imposes on the revenue authorities' freedom to act."9
Nevertheless, the second point to be made is that there are many instances where the ATO has provided practical guidance to the community on what would be substantive or satisfactory compliance in certain situations.
Sometimes these administrative approaches are incidental to issues covered in public rulings or determinations and so are incorporated into those products. A recent example is TD 2004/2 dealing with non-script share capital contributions where the share rights are unchanged.
More usually, these administrative approaches are contained in practice guides such as Law Administration Practice Statements. Examples include:
- PSLA 2004/1: Employer's Reporting Obligations for Superannuation Contributions;
- PSLA 2004/3: Taxation of Capital Gains of a trust that has separate income and capital beneficiaries;
- PSLA 2003/12: CGT treatment of a testamentary trust for the purposes of Div 128;
- PSLA 2003/8: Treatment of Low Cost Items;
- PSLA 2003/6: Calculation of Alienated Personal Service Payments withholding amounts;
- PSLA 2001/12: Lodgment of Ultimate Beneficiary Statements;
- PSLA 2001/6 (and PSLA 1999/4): Home Office Expenses;
- PSLA 2000/2: Transparent Trusts;
- PSLA 1999/2: Calculating car expense deductions;
On 10 May 2004 there is a workshop organised by the ATO with business and advisors to further discuss the practical implementation problems faced by businesses in relation to the Consolidation regime.
When it comes to developing administrative solutions to practical problems our view is this. We are prepared to work with business and their advisers to look for sensible practical ways of overcoming them where the result approximates to the correct substantive legal outcome.
There are some difficulties with the Consolidation legislation where sensible practical ways of giving effect to the underlying policy intent have already been developed. These include:
- Market Valuation Short-cuts.
- Over-depreciated assets short-cuts.
This solution was necessary to address the practical inability of most groups to satisfy the 'letter of the law'. However, they were designed to give a reasonable approximation of what the law intended.
- Deferred tax liability short-cuts
This approach simplifies for the purposes of s705-70 (1A) amount of the deferred tax liability to be used as part of the allocable cost amount calculation, but still materially and substantively achieves the legislation's policy objectives.
In 2003 and 2004 we have also looked for ways of allowing businesses to get their consolidated tax return materially correct, while minimising their compliance costs. For example, we have allowed some businesses to return some aggregated (not consolidated) data in their first year's consolidation return.
In the interests of greater transparency and accountability the Commissioner has recently announced the development of a new series of practice statements (to be developed in partnership with the NTLG) which will guide practical compliance in a range of circumstances.10
In providing practical guidance in these areas, a number of criteria are emerging from our experience thus far, which expose the balancing of factors that need to be taken into account in achieving sensible administration. They include -
- Intent of legislation needs to be maintained - in other words, the Commissioner will not seek to provide a practical compliance outcome that ignores the intent of the Parliament.
- Application of practice statements must be concessional in nature - there is no power to increase tax liabilities beyond that prescribed by the law. Practice statements in this series would only address at a practical level difficulties in compliance, or gaps that exist in the legislative framework.
- Outcomes need to reflect, as far as practicable, an existing industry practice - as is our approach in our Easier, Cheaper and More Personalised Program, practical compliance solutions should reflect, to the extent that they achieve the intention of the law, the practices which exist within the community so as to minimise compliance costs.
- Risks to the Revenue need to be managed - in determining whether a practice statement can be used to achieve practical compliance, revenue implications need to be considered. Generally the practical solutions would need to reflect the policy intent so as to produce revenue neutral outcomes.
- Adverse impacts on Third Parties need to be avoided - clearly we need to consider whether the easing of the compliance burden on one group affects the rights of third parties, say in the relationship between employers and employees. This is particularly important in the context of GST.
- There should be choice for taxpayers -Taxpayers should not be adversely affected for choosing the practical compliance approach over the (often more complex) alternatives - for example, it may be that taxpayers have invested in special systems applications which meet all the requirements "to the letter of the law". Of course the law is paramount and taxpayers are able to continue to use them, if that is their choice.
- Practical administration approaches will not apply where there is evidence of tax avoidance.
We will be working with the NTLG to develop a forward agenda of matters which might be considered for treatment in the new General Administration Practice Statement series. PSLA 2004/1 (GA) dealing with Family Trust Elections represents the first fruit of this partnership. Administrative arrangements around the application of the GST grouping rules to representatives of incapacitated entities are also imminent.
The next meeting of the NTLG subcommittee is scheduled for 9 June. At that meeting we hope to formalise processes, develop a register of matters that may be amenable to administrative approaches, and prioritise the various issues.
The Corporate Tax Association which is a member of the NTLG subcommittee has already raised with me the following topics for consideration:11
- Aggregate Uplift in Depreciating Assets on Consolidation
- PAYG Instalments and Forex Gains and Losses
- Foreign Investment Funds and the Balanced Portfolio Threshold
- Functional Currency Rules and Thin Capitalisation
- Choice for non-qualifying forex accounts
Corporate groups are naturally interested in minimising their costs, including tax costs, while still managing all tax risks and achieving material compliance with the law.
One way of achieving greater tax certainty is through forward compliance approaches such as relevant public rulings, Advance Pricing Arrangements, GST Co-operative compliance advance agreements12 or private binding rulings.
We are also co-designing with industry (and advisors) a revised tax risk assessment matrix which should facilitate a shared understanding around the concept of tax risk the likelihood of those risks occurring, their materiality and how those tax risks might be mitigated.
The Corporate Consultative Committee meeting scheduled for 14 May 2004 will seek to progress the co-design of these concepts.
Pressures for improved corporate governance globally have come from a number of high profile investor crises. The agenda for improved corporate governance is aimed at empowering boards to achieve high levels of financial disclosure and protection of shareholder interests. Regulators and the stock exchange in Australia now require tighter requirements for audit practice and board composition.
The adoption of best practices by many boards includes the creation of audit, compensation and corporate governance committees to provide non-executive director review of management functions.
The Commissioner published the 'Large business and tax compliance' booklet last year acknowledging the role of business leaders in making judgments about the need for tax compliance to be part of the corporate governance processes of every company and board. More recently, the Commissioner wrote to about 1500 corporate boards sharing his views on management of tax risks and providing some practical guidance for boards.
Of course Board's don't have to become tax experts. Corporate governance involves an appreciation of how much risk companies are prepared to accept and the control and mitigation frameworks that they consider are warranted. Tax risks should be considered in this context. While nobody expects Board's to become tax experts, Board's oversee their company's risk management framework which we suggest includes the proper identification of major tax risks, which risks are acceptable and appropriate, and which are not, and the processes that are in place for the management of those risks.
The results from a survey released earlier this year13 indicated that a high proportion14 of corporates surveyed indicated that their documented framework for tax risk management was only of medium quality. A more recent survey15 indicates that a majority of respondents recognise the need to manage their tax risks along the lines suggested by the ATO and more than half of the respondents have changed their procedures as a result of ATO statements.
The ATO's focus on administration issues (without the added responsibility for the legislation design function)16 includes an appreciation of the compliance costs of policy proposals, and of the practicality for taxpayers of alternative design options.17 This enlivened role may allow the ATO to champion approaches that may result in lower compliance costs for taxpayers and produce more workable legislative solutions. However, the dynamic nature of the commercial environment makes it difficult for tax legislation to always fully contemplate business practicalities.
Since 1998 the ATO has implemented around 60 new measures per year. This is a significant chunk of the Government's legislative agenda and reflects the intermingling of the tax system with other dimensions of the community - family support, education, health, industry and environment. It also poses enormous challenges for the ATO in providing help and education to companies impacted by these new measures. Similarly, the challenge for businesses (and their advisors) is equally significant and burdensome.
Since 2001 there have been approximately 65 Tax Laws Amendment Acts passes by the Parliament. As at March 2004, over 40 legislative measures have been enacted. Since 1 June 2003, around another 40 measures were before Parliament. A further 15 measures which have been announced by Government were still to be introduced into Parliament. A large number of these measures (both announced and in the Parliament) are intended to have retrospective commencement dates.
Taxpayer compliance and the ATO's administration of measures having effect from a certain date is extremely difficult and problematic where those measures have not been enacted at the time of their commencement date.18
In actively managing measures which are still to be enacted and which will have retrospective application dates once enacted, we have developed a decision tree to guide our administration of each measure.19
As you will note from the decision tree diagram, the Commissioner cannot insist on the application of a proposed law which has the effect of increasing a taxpayer's liability. That would be ultra vires. Also, the provisions of the Financial Management and Accountability Act 1997 (and The Constitution) prohibit the Commissioner from intentionally making payments without lawful authority.
Accordingly, the Commissioner is generally required to administer the existing law, even where proposed changes to the law have been publicly announced. However, under Australia's self assessment system, the Commissioner is empowered to accept returns as lodged.20 So where, amongst other considerations, the likelihood of passage is high and imminent, the risks to revenue are low, and the provisions of the FMA Act are satisfied. The Commissioner may, in these limited situations, allow taxpayers to anticipate enactment.21 However, these are not decisions that are taken lightly.
For example, a matter recently considered by the ATO is the Assistant Treasurer's 27 March 2003 announcement advising that legislation would be enacted to allow Corporate Unit Trusts and Public Trading Trusts to be a head entity of a consolidation group. The measure is to take effect from 1 July 2002, the start of the consolidation regime.
The legislation to give effect to the measure has been introduced into Parliament in Taxation Laws Amendment (2004 Measures No.2) Bill 2004. If we do not allow groups to anticipate the legislation but require them to lodge their 2002-03 returns under the existing law, they will effectively be denied access to the consolidation regime for that year because of the link between notification and the lodgment of the tax return. On the other hand, if taxpayers anticipate the legislation, and the law is not passed or substantially amended, they would be exposed to considerable costs in deconsolidation the group, recalculating the liability of all members and lodging amended returns.
Prior to the introduction into Parliament of the relevant Bill, the ATO decided that the existing law should apply because, amongst other things, of the lack of detail in the public domain about the measure.
With the introduction of the Bill, the ATO has now decided that it is appropriate to accept the notification and income tax returns that are prepared on the basis of the proposed amendments. A communication strategy is being considered for this measure that will inform taxpayers that in the event that the proposed legislation is either not passed or is modified, the group will have to deconsolidate and amended returns will have to be lodged within a reasonably time. Alternatively, the taxpayer may lodge on the basis of the existing law, or seek a deferral of lodgement.
In any of these situations, there would be no exposure to culpability penalties.
Both businesses and the ATO have to deal with choices in the way they function.
Businesses manage risks, including tax risks, to further their long term corporate goals.
The ATO manages risks to achieve high levels of voluntary compliance with the tax laws in a way that builds community confidence in the tax system.
Attachment A
Here are some initial ideas on possible administrative short-cuts:
1. Aggregate Uplift in Depreciating Assets on Consolidation
This is an option that has already been discussed with Peter Coakley, and would involve using a single uplift figure, rather like depreciation pooling, rather than working out the amount of the uplift on an item by item basis. Taxpayers may choose to apply an upper limit using this approach, so that larger items of depreciating assets still have their cost base reset individually. This would then enable taxpayers to determine gains and losses on subsequent disposals.
Many larger groups still operate using non-standard fixed asset systems through different divisions (for historical reasons, because of acquisitions or whatever). Applying the uplift item by item would involve a lot of trouble and expense in such cases. To the extent the uplift number is aggregated, there would be a marginal benefit to the revenue on subsequent disposals because any unexpired depreciation would remain in the pool.
2. PAYG Instalments and Forex Gains and Losses
We understand the ATO's view is that realised Forex gains are in the nature of income, whereas Forex losses are allowable deductions. For PAYG instalment purposes, therefore, they should not be netted off. If this is correct, it probably applies equally to the post-1 July 2003 regime following the introduction of the TOFA legislation last year (although in some circumstances short-term gains and losses can be reflected in the capital cost of assets where applicable).
While there are probably some contrary technical arguments that could be applied (the International Nickel view that revenue gains and losses can be referred back to the original transactions; or the question whether statutory gains are instalment income under the Tax Administration Act), we would prefer the ATO to simply say that where taxpayers' systems normally net off gains and losses, and it would be difficult to reconstruct events on a gross gain and loss basis, the ATO would regard taxpayers as having complied with the law where they operate on a net basis.
We don't believe such a short-cut would have even a marginal impact on revenue. Taxpayers would work out their Instalment Rate on the basis of net realised Forex gains and losses in the Instalment Year, and apply that Rate on the same basis in the income year. Any unders and overs would get picked up on the final wash-up payment.
3. Foreign Investment Funds and the Balanced Portfolio Threshold
I understand from members in the funds management industry that complying with the balanced portfolio exemption involves significant compliance costs for very little revenue gain. The compliance costs arise because of the requirement to determine whether particular investments are predominantly active or passive for FIF purposes. This is not always a simple matter and will sometimes require the making of further enquiries from the entities invested in.
In a recent Treasury submission to the Senate Economics Legislation Committee in relation to the New International Tax Arrangements Bill 2003, Treasury expressed the view that "there is scope for exploring ways of reducing these costs through agreed administrative practice such as classifying holdings on the basis of a sample"
I understand from members in the funds management industry that reliable sampling techniques can be developed to deal with these issues.
4. Functional Currency Rules and Thin Capitalisation
The new Forex realisation rules allow certain entities to work out their taxable income (or loss) for the year in the applicable functional currency. This is a positive step, and removes yet another point of distinction between accounting and tax. However, we are advised that the thin capitalisation rules require the various calculations to be worked out on the basis of AUD accounts (e.g. the Method Statement for the Safe Harbour Rule). A useful administrative short-cut would be for the ATO to allow corporate entities that adopt the functional currency under the TOFA Forex realisation rules to also use their foreign currency accounts for Thin Cap purposes.
5. Choice for non-qualifying Forex accounts
Sub-div 775-E is restricted to qualifying Forex accounts as defined. This does not include, for example, a current account conducted with a foreign associate that is not a bank or an ADI. A number of groups conduct such accounts, and use retranslation for statutory accounting purposes. It is difficult and costly to separate out the realised and unrealised Forex gains and losses on such accounts. A useful administrative short-cut would permit those entities to use retranslation for tax purposes also.
These are just a few examples of the sorts of short-cuts that might be achievable pursuant to the approach that was raised by the Commissioner at the December 2003 NTLG meeting. I understand that Jim Killaly is currently dealing with another large taxpayer on a possible shortcut involving FBT.
I'm hopeful that CTA members will be able to generate additional ideas for administrative short-cuts in the future. Once these are identified and considered we will pass them through to Rona Mellor's Committee for further consideration.
1 Braithwaite J., "Making Tax Law More Certain: A Theory", Centre for Tax System Integrity, ANU, Working paper No 44, December 2002, argues for a simular approach for the development of tax legislation.
2 Sir Anthony Mason, Opening Address to the 6th ATAX International Conference on Tax Administration Challenges of Globalising Tax Systems, Sydney, April 2004, p2.
3 Frost T., "Foreign Currency Gains and Losses - Next Instalment", Financial Services Taxation Conference, Queensland, February 2003, p3 and Appendix A.
4 See for example, D'Ascenzo M,. "Ownership: the Bellinz Saga", The Tax Specialist, Vol 2 No2 October 1998.
5 Australian National Audit Office, Performance Audit of the Taxation Ruling System, July 2001 at p17, 20 and 70.
6 Bellinz Pty Ltd Limited & Ors v FC of T 98 ATC 4633 at 4646 per Hill, Sundburg and Goldburg JJ.
7 Inland Revenue Commissioners v National Federation of Self-Employed & Small Business Ltd [1982] AC 617.
8 R v Inland Revenue Commissioners; ex p Preston [1985] 1 AC 835.
9 Sir Anthony Mason op. cit., p4.
10 Carmody M,, "The Art of Tax Administration: Two Years on", 6th ATAX International Conference on Tax Administration Challenges of Globalising Tax Systems, Sydney April 2004.
11 Drenth, F., 26 April 2004 see Attachment A.
12 PSLA 2004/2
13 Ernst & Young - Tax Services March 2004 - Maximising Value in the Australasian Corporate Tax Function
14 62%
15 Gilbert + Robin, lawyers, Tax as a corporate governance issue - Emerging trends in Corporate Australia, April 2004
16 Treasurer's Press Release (No. 22) of 2 May 2002. A diagram of the Legislative Process is at Attachment B.
17 See ATO/Treasury Protocol for Integrated Tax Design at Attachment C.
18 See D'Ascenzo M., "An Evolving and Adapting ATO", Taxation Institute of Australia, 32nd Queensland State Convention, May 2003.
19 A copy of the Decision Tree "Risk Analysis Model: Commissioner's administrative options, if any, before law is enacted" is at Attachment D.
20 Section 169A of the Income Tax Assessment Act 1936
21 These decisions are made by the ATO's Policy Implementation Forum.
Last Modified: Thursday, 13 May 2004