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  • RTP schedule expansion to large private companies

    This information will assist you in meeting your obligations to lodge a Reportable tax position (RTP) schedule, including your disclosure obligations.

    For income years starting on or after 1 July 2020, all companies that meet certain criteria are required to lodge an RTP schedule.

    For the first year, large private companies will only need to lodge the RTP schedule if we have notified them of the requirement to do so. The notification letters were issued in July and September 2020.

    Public and foreign owned companies (including foreign owned private companies) will still need to self-assess against the lodgment criteria in the RTP schedule instructions to determine if they are required to lodge.

    Private companies will be required to self-assess their requirement to lodge the RTP schedule for years beginning on or after 1 July 2021.

    If you have questions or require further information, email us at ReportableTaxPosition@ato.gov.au.

    Find out about:

    Lodgment requirements

    Private companies are required to lodge the RTP schedule for their:

    • 2020–21 income year if we have sent them a notification
    • 2021–22 and later income years if they meet the RTP lodgment criteria

    2020–21 income year

    You need to lodge an RTP schedule for the 2020–21 income year if we have sent you a notification of the requirement to lodge. If you have an early balancing substituted accounting period, your first RTP schedule will be for the 2021–22 year. We sent notifications to private companies that have total business income of either:

    • $250 million or more
    • $25 million or more, and are a part of a private economic group with total business income of $250 million or more.

    Total business income is calculated with reference to your 2019 company tax return and 2019 tax returns of other entities in your economic group. If your private company was sent a notification you will be required to lodge an RTP schedule for the 2020–21 income year even if your company's income (or its group income) declined in the 2019–20 income year.

    If your private company was not sent a notification, it is not required to lodge a 2021 RTP schedule.

    2021–22 and later income years

    You need to lodge an RTP schedule for the 2021–22 income years if you meet the RTP schedule lodgment criteria. This is the same for all types of companies, whether private, public or multinational.

    Lodge the RTP schedule if you are:

    • lodging a company tax return for the entire year (12 months or more), and
    • have total business income of either:
      • $250 million or more, or
      • $25 million or more, and is a part of an economic group with total business income of $250 million or more.

    During the year, we will send a letter to selected private companies, encouraging them to consider RTP schedule requirements for the 2021–22 year. This letter is for education and transparency purposes only. A company that receives a prompt letter is not required to lodge an RTP schedule in 2021–22 if they do not meet the RTP schedule lodgement criteria. Similarly, a company that doesn’t receive a prompt letter will still need to self-assess their requirement to lodge a 2021–22 RTP schedule and will be required to lodge an RTP schedule for 2021–22 if they meet the lodgement criteria.

    Substituted accounting period

    Large private companies with an early balancing substituted accounting period (SAP) starting before 1 July, will:

    • not be required to lodge an RTP schedule for 2020–21
    • be required to lodge an RTP schedule for 2021–22 if they are notified
    • be required to lodge an RTP schedule for 2022–23 and subsequent years if they meet the lodgment criteria.

    Large private companies with a late balancing SAP starting after 1 July, will be required to lodge an RTP schedule for:

    • 2020–21 if they are notified
    • 2021–22 and subsequent years if they meet the lodgment criteria.

    Penalties

    The RTP schedule is part of the company tax return and is required to be lodged by the due date of your company's tax return.

    Administrative penalties may apply if you:

    • make a false or misleading statement; this includes omitting information such as not disclosing a reportable tax position
    • fail to lodge on time.

    Non-company entities

    Entities that are not companies, but who are required to lodge company tax returns, don't need to lodge an RTP schedule. For example, a corporate limited partnership is not required to lodge an RTP schedule.

    Who needs to complete the RTP schedule

    This information will help you understand how to apply the RTP schedule lodgment criteria, and how we determined who was notified for the 2020–21 year. It explains how to apply the definitions of total business income and economic group.

    The RTP schedule instructions 2021 cover the lodgment criteria definitions and provide examples. .

    Find out about:

    Total business income

    Total business income is the amount reported at the Total income label of the company tax return. For example, in the 2020 company tax return, total income is reported at label 6S.

    The total business income of an economic group is the sum of all income labels in the tax returns of every group member, including trusts and partnerships but excluding individuals.

    There is no total income label on the trust and partnership tax returns, so this needs to be added up manually for all income labels.

    All Australian income of group members (other than individuals) is included in the calculation. Foreign income of group members is only included where the entity generating the income is an Australian resident entity.

    Where an individual holds the ownership interest that connects entities into one economic group, the income on their individual tax return is excluded from group total business income calculations, for the purposes of determining the RTP schedule lodgment obligation of the economic group.

    Economic group

    An economic group includes all entities (companies, trusts and partnerships, etc) that lodge a tax return under a direct or indirect Australian or foreign ultimate holding company or other majority controlling interest.

    This includes all entities under a single ultimate holding company or under the ownership of a single individual, trust or partnership.

    Companies with equal ownership

    Where a company is owned by a partnership with two equal partners, other entities owned by the partners do not form part of that company's economic group. In this case, the partnership is the head entity in the economic group.

    Other entities owned by the partnership (jointly owned by the partners) form part of your company's group, but entities owned by the partners outside the partnership do not.

    Trusts

    Group members need to hold a majority controlling interest in a trust for a trust to be included in your economic group. Generally, this would require your company or a group member to own over 50% of units in a trust.

    Companies that are owned by a trust are included in that trust's group.

    Superannuation funds

    A super fund is only included in an economic group where one individual is entitled to over 50% of the assets in the fund.

    The trustee of a super fund provides services to the super fund; it does not own the fund. Control and group membership of the trustee of a super fund is based on the shareholding in the trustee entity.

    RTP disclosures

    Information about positions to be disclosed in the RTP schedule.

    Category A and B reportable tax positions

    To work out what positions must be disclosed as Category A and B reportable tax positions, see section B of the 2021 RTP schedule instructions.

    Category B – Uncertainty in your entity's financial statements

    Private companies prepare less comprehensive financial statements than public and foreign owned companies and may not consider or report tax uncertainty in their financial statements.

    If your financial statements meet the requirements for private companies, you only need to consider what is in the financial statements to determine whether it has a Category B reportable tax position. A position not covered in the financial statements may be a Category A reportable tax position and need to be disclosed.

    Category C reportable tax positions

    Category C is a list of questions asking your company whether it had a particular arrangement or transaction in place at any time during the income year. For 2020–21, Category C questions are found in the section C of the 2021 RTP schedule instructions.

    Last modified: 28 Jun 2021QC 63131