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  • Stakeholder relationships

    Consultation

    Our consultation arrangements with stakeholder and industry groups provide flexible and responsive mechanisms for consulting to improve outcomes more broadly.

    During 2015–16, we received four GST consultation requests from industry representatives, government bodies and various professional associations:

    • GST waiver of tax invoice (Corporate Card Statements)
    • treatment of ‘home care’ and ‘residential care’ services
    • GST and prepared meals
    • remaking sun-setting GST Legislative Determinations.

    The GST Safe Harbours Working Group, established to identify and implement red tape reductions in GST, met several times throughout the year. Topics discussed during 2015–16 included barter transactions, credit unions and apportionment of GST credits, and international transport and freight forwarders.

    We also met with the Big 4 Accounting firms and discussed a range of topics throughout the year, including:

    • collaborative consumption
    • cross borders new measures
    • digital currencies
    • digital opportunities for tax administration.

    Complaints

    We use feedback from the community to target areas for improvement, remove irritants for taxpayers wherever possible, and refine our internal processes and external communication products.

    In 2015–16, we received 1,804 complaints where either GST or business activity statement (BAS) was the primary issue. This is a significant increase from what we reported last year as we are now including all complaints, and not just those relating to GST-related compliance activities (audits and appeals).

    The inclusion of the BAS product category instead of the higher level ‘GST’ recognises the importance of this information to the administration of the GST.

    By way of comparison, we received only 244 complaints in 2015–16 where GST was the primary issue, an 8% decrease on the previous year. The number of complaints with a GST component also decreased from the previous year (123 to 91). However, in 2015–16 we received 1,560 complaints where business activity statements were the main issue.

    Of complaints where GST was the primary issue, around 37% were about delays in the release of BAS refunds, and 33% were about dissatisfaction with an audit or objection. Of complaints where business activity statements were the main issue, 35% were about delays in the release of BAS refunds.

    Of complaints with a GST component, around 49% were about ATO system registration issues that resulted in some ABN and GST registrations not being reflected in the Australian Business Register, the Tax Agent Portal and the Business Portal. To assist clients impacted by this issue and allow them to operate their business, we provided a letter confirming that they are registered for GST and should be charging and remitting GST.

    Services to Government

    We manage external and internal stakeholder relationships with Government, Ministers, other Members of Parliament, and other agencies and stakeholders. We continue to work with our stakeholders to strengthen relationships and encourage continuous improvement in sharing of information and providing services to the community.

    Table 20: Services to Government activities

    Activity

    2014–15

    2015–16

    Parliamentary briefings

    3

    3

    Questions on notice

    0

    5

    Ministerials

    19

    19

    Member of Parliament phone queries

    21

    18

    Minutes to Minister

    10

    4

    Minutes to Treasury

    0

    0

    Costings to Treasury

    7

    5

    All services to government other than Questions on Notice have reduced during 2015–16. Our alternative approach to raising issues with Treasury throughout the year meant that no minutes to Treasury needed to be issued.

    International relationships and engagement

    In November 2015, Australia was one of over 100 jurisdictions and international organisations that endorsed the OECD International VAT/GST Guidelines as a global standard. This outcome allows all jurisdictions to act with consistency in the tax treatment of cross-border supplies between businesses, and of digital products and other services to final consumers. The law changes are in two parts, with the first lawExternal Link change taking effect from 1 October 2016. Full implementation will reduce incidences of double taxation and unintended double non-taxation in taxing cross-border supplies of services and intangibles.

    We are working closely with foreign businesses and experienced Government organisations in implementing the changes. We have received positive feedback about our willingness to engage with businesses in implementing the practical impacts of the GST law change affecting foreign based suppliers. “Australia is a leading example of how to effectively engage with businesses from the design through to implementation of new law” (Karl-Heinz Haydl, BIAC VAT/GST Chair).

    Throughout the year, we also continued to support the OECD task team to identify options to reform VAT/GST treatment of imports of low value goods and we have worked closely with Treasury in developing draft law to implement change. We continue to give strong representation at the OECD through engagement in task teams commenced in early 2016 to influence the design of international frameworks that seek to facilitate international cooperation, particularly in seeking compliance by foreign suppliers.

    In addition, the ATO has acted to engage other key jurisdictions through an international virtual community of practice (CoP) for indirect tax. The establishment of the CoP provides an avenue to share and exchange information, ideas and best practice in relation to the administration of indirect taxes. To build and foster international relationships, we are hosting an inaugural conference on consumption tax for the Study Group on Asian Tax Administration and Research (SGATAR) in October 2016. The conference aim will be to enhance co-operation, improve administration and discuss consumption tax related matters.

    New policy developments

    Our connection with clients, professionals and industry provides us with insights into the overall health of the GST system. Through these relationships, we build an understanding of the issues and complexities affecting the integrity and perceptions of fairness in the system. As a trusted and respected administrator, we are able to influence policy and law design to shape better outcomes.

    GST treatment of cross-border transactions between businesses

    • This measure aims to ensure that Australia does not draw non-residents into the GST system unnecessarily by relieving non-resident suppliers of the obligation to account for GST on certain supplies.
    • Legislation received Royal Assent on 5 May 2016 and will commence on 1 October 2016.

    Extending GST to digital products and other services imported by Australian consumers

    • As discussed in the international relationships and engagement section, this measure extends GST to imports of digital products and other services by Australian consumers. This includes digital products such as streaming or downloading of movies, music, apps, games, e-books as well as services such as architectural or legal services.
    • This measure was announced in the 2015 Budget. Legislation received Royal Assent on 5 May 2016 and will commence on 1 July 2017.
    • We have developed a communication strategy and published website information for those non-resident businesses (and their tax advisers) likely to be affected.
    • A simplified GST registration, report and pay system for non-residents is being developed.

    Low value imported goods

    • The Government has announced that offshore businesses will be required to charge GST on taxable goods under $1,000 imported to Australian consumers from 1 July 2017.

    Federal Budget

    In addition to the low value imported goods measure, the Government announced a number of other GST related measures in the 2016–17 Budget.

    • Simpler BAS
      • As discussed, we will be piloting a simpler BAS for small businesses from 1 July 2016 with implementation for all small businesses from 1 July 2017. This will simplify reporting requirements, leading to simplified bookkeeping and reduced compliance costs. We are working with software developers and other stakeholders to confirm and implement the changes needed to business systems.
       
    • Small Business Threshold
      • The Government will increase the small business entity turnover threshold from $2 million to $10 million from 1 July 2016. This will extend access to a number of GST concessions for eligible small businesses.
       
    • Digital Currency
      • To progress the Government’s commitment to remove double taxation on digital currencies, on 3 May 2016 the Government released a discussion paper on GST treatment of digital currency. Of the 18 submissions received by Treasury, most were supportive of a principle-based and future-proofed definition of ‘digital currency’.
       
      Last modified: 20 Apr 2017QC 51810