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  • ATO action to reduce the gap

    We work closely with large super funds to help them pay the right amount of tax. We do this through our justified trust program, providing guidance to help funds comply and by focusing on the governance of funds. Our engagement with funds, coupled with the significant prudential and regulatory supervision of large super funds, results in the relatively low tax gap estimate for this group.

    We gather intelligence through assurance reviews, industry consultation and our rulings program to identify emerging risks.

    We focus on preventative action, including treatment strategies to address legal or systemic issues. We also work with industry to resolve unsettled interpretive matters to promote willing participation.

    Our key strategies include:

    • our top 100 and top 1,000 tax performance programs to assure that these funds are paying the correct amount of income tax through initiated tax assurance reviews or next actions work.
    • working with Treasury to support law design and settling areas of interpretative uncertainty
    • identifying existing and emerging areas of uncertainty and consulting with industry to develop public advice and guidance to help large super funds comply, for example
      • PCG 2018/2 Propagation arrangements adopted by registrable superannuation entities
      • TD 2020/7 Income tax: can capital gains be included under subparagraph 770-75(4)(a)(ii) of the Income Tax Assessment Act 1997 in calculating the foreign income tax offset limit?
      • TD 2017/24 Income tax: where an amount included in a beneficiary's assessable income under subsection 99B(1) of the Income Tax Assessment Act 1936 (ITAA 1936) had its origins in a capital gain from non-taxable Australian property of a foreign trust, can the beneficiary offset capital losses or a carry-forward net capital loss ('capital loss offset') or access the CGT discount in relation to the amount?
    • engaging early with key industry participants, including custodians and administrative service providers
    • continuing our focus on fund governance, including that funds have adequate testing and controls over third-party data
    • measuring the impact of our activities and long-term investment in law design and interpretation.

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      Last modified: 19 Oct 2020QC 56335