News and latest initiatives
Find out about our latest initiatives and developments:
Key taxpayer engagement
Key taxpayer engagement (KTE) is a tailored engagement approach where we base services and assurance checks on the risk profile of the client.
We are currently piloting KTE with a small number of clients. We will roll it out to approximately 130 public groups, currently described as higher consequence for income tax, GST or excise.
Good tax behaviour and greater cooperation with us will be recognised through access to premium services and streamlined assurance requirements.
Country-by-Country (CbC) reporting: Exemption Guidance
We have published guidance on exemptions from Country-by-Country (CbC) reporting obligations to explain what information and documentation is required as part of an exemption application.
It also outlines the general principles and processes we apply in relation to exempting a particular entity from some or all of its CbC reporting obligations.
CbC reporting applies to income years commencing on, or after, 1 January 2016. It requires Significant Global Entities (SGEs) to electronically lodge three statements (the local file, master file and CbC report) with us.
SGEs that have CbC reporting obligations may request an exemption from providing one or more of these statements, with reference to the guidance, by emailing CbCReporting@ato.gov.au.
Latest tax avoidance warnings
In September, we released two new taxpayer alerts as early warning of our concerns around new or emerging arrangements that may lead to tax avoidance.
The taxpayer alerts cover arrangements implemented to avoid the Multinational Anti-Avoidance Law. In these arrangements, funds are provided to an overseas entity before being returned to the Australian entity to purportedly generate Australian tax deductions, while not generating corresponding Australian assessable income.
Voluntary tax transparency code
The Tax Transparency Code (TTC) is a set of principles and minimum standards to guide medium and large businesses on public disclosure of tax information. The code is voluntary and aims to encourage greater transparency within the corporate sector.
Medium and large businesses are encouraged to adopt the TTC to enhance community understanding of their compliance with our tax laws. This includes entities treated as companies for Australian tax purposes, and foreign multinationals with operations in Australia.
Now consulting – general purpose financial statements
Significant global entities will soon be required to provide us with a general purpose financial statement if they have not already lodged one with the Australian Securities and Investments Commission (ASIC).
This will improve the transparency of multinational enterprises with Australian operations.
We are now consulting on specific aspects of the implementation of this measure, which applies to income years commencing on or after 1 July 2016.
The consultation paper is available for comment until 30 September 2016.
Seeking your feedback on our offshore hubs guideline
We are now seeking feedback on our Offshore hubs draft practical compliance guidelineExternal Link (PCG). This document outlines how we propose to treat transfer pricing issues related to centralised operating models, commonly referred to as hubs.
Consulting with you about this PCG is part of our commitment to transparent administration, and making it easier for you to comply with your self-assessment obligations under Australia’s transfer pricing provisions.
We encourage you to email your feedback to us by 30 September 2016.
We continue to focus on tax avoidance
We continue to focus on tackling tax avoidance. We recently released three taxpayer alerts as early warning of our concerns around new or emerging arrangements that may lead to tax avoidance. The taxpayer alerts cover arrangements involving offshore permanent establishments, GST implication of arrangements entered into in response to the Multinational Anti-Avoidance Law (MAAL), and thin capitalisation.
Considering your feedback, we’ve made it easier for you to find information about deceased estates. These improvements include:
- a new checklist that will help you manage the Australian tax affairs of someone who has died
- an option to discuss deceased estates (the tax and superannuation affairs of a person who has died) on our phone menu, so you can speak to the right person at the right time
- changes to our internal systems to make it easier to unofficially notify the ATO of a death.
Introducing Super Scheme Smart
Super Scheme Smart is designed to inform individuals and their advisers about aggressive tax planning and retirement planning schemes.
These schemes target individuals approaching retirement, trustees of self-managed super funds (SMSFs), self-funded retirees and their advisers. They are devised to help individuals avoid paying tax by channelling money inappropriately through a SMSF.
Don’t fall prey to these schemes, which are an increasing concern. We’re now providing guidance on what to look out for and where you can go for help.
Exploration Development Incentive for small exploration companies
The Exploration Development Incentive (EDI) encourages shareholder investment in small companies exploring for minerals in areas of Australia without a mining history - 'greenfields' exploration.
Under the scheme, companies can distribute exploration credits to shareholders by converting a portion of their tax losses into these credits. The scheme is capped at $100 million over three years.
More than 80 companies participated in the first year of the EDI, converting approximately $70.3 million of greenfields exploration expenditure into $21 million of exploration credits.
Year two of the EDI is open to participants, who must register by 30 September 2016. The exploration credit will be capped at $35 million for the year and will be shared between all eligible participants.
Foreign investment Land Register launched 1 July
From 1 July 2016, foreign investors approved by the Foreign Investment Review Board (FIRB) can notify us when they purchase an Australian residential property through the Agricultural Land Register (the Land Register).
All acquisitions of interests in agricultural land by foreign investors need to be recorded on the Land Register. The Land Register will continue to be used by foreign persons to record purchases, sales and transfers of agricultural land.
The Land Register is designed to capture data on agricultural land or residential properties owned by foreign investors.
New measure strengthens the foreign resident CGT regime
The government is strengthening our foreign resident capital gains tax (CGT) regime to help collect foreign residents' CGT liabilities.
From 1 July 2016, new rules apply to sales of Australian property with a market value of $2 million or above. Sellers need to pay a 10% non-final withholding tax for all contracts started on or after 1 July 2016 unless they have a clearance certificate or variation certificate.
Common Reporting Standard for foreign tax residents
The Common Reporting Standard (CRS) is the new global standard for collecting, reporting and exchanging financial account information on foreign tax residents.
The CRS takes effect on 1 July 2017 and more than 90 countries have already committed to the new reporting standard.
Tax authorities will exchange this information to help make sure everyone pays the right amount of tax on their income.
Australian banks and financial institutions will share information about accounts held by foreign tax residents. We will also receive financial account information on Australian residents from other tax authorities.
The first exchange of information will occur in 2018.
Country-by-Country reporting for multinationals
Country-by-Country reporting (CbC) is part of a broader suite of international measures aimed at combating tax avoidance through comprehensive exchanges of information between countries.
It takes effect for income years from 1 January 2016, and 39 countries have already signed up for the exchange of reports.
Multinationals with an annual global income exceeding A$1 billion will report details of their international related party dealings, revenues, profits, and taxes paid by jurisdiction.
The three statements (the Local file, Master file and CbC report) will assist in gathering a global picture of how multinationals operate, so we can better assess transfer pricing risks.
Interim guidance for unit trust distribution statements
We have released interim guidance on the application of subsection 104-71(4) table item 7 to determine the tax deferred and capital gains tax concession components of unit trust distributions. This is particularly relevant for trustees completing 2016 distribution statements for unit trusts.
The guidance sets out information concerning our proposed application of the law to distributions of gains offset by trust losses. This will help trustees to consider self-assessment principles in their approach to unit trust interests for income years ending on or after 30 June 2016.
SMSF early engagement and voluntary disclosure service
We encourage voluntary compliance by engaging with SMSF trustees and their advisers as soon as difficulties arise.
Our new streamlined SMSF early engagement and voluntary disclosure service provides a single entry point for SMSF trustees and professionals to quickly notify us of unrectified contraventions. If you act before we begin an audit, we’ll take voluntary disclosure into account when we determine enforcement action and appropriate remission of administrative penalties.
Trustees or their SMSF professionals can complete the SMSF regulatory contravention disclosure form or apply in writing with supporting documents.
The Division 7A guidance you need
We can help you better understand your clients’ Division 7A obligations with our new video series. We have produced four videos to help you get things right when you work with Division 7A.
Watch the videos to learn about:
You can also ask questions and leave your feedback on our Q&A page.
Tax governance for private groups
We have just released an online tax governance guide for privately owned groups and their tax advisers.
Good governance practices can benefit business, supporting business planning and decisions, managing commercial risks and preventing fraud. Likewise, the new tax governance guide is designed to help private groups improve their tax governance framework, including identifying and managing tax and superannuation risks as part of their broader corporate governance.
Demonstrating effective tax governance builds confidence that a business's tax affairs are under control, allowing businesses more time to focus on day-to-day operations.
In late 2015, the government announced the National Innovation and Science Agenda, which included two new tax measures.
A tax incentive for early stage investors includes a carry forward non-refundable tax offset and an exemption from capital gains tax. Changes to the venture capital arrangements include providing incentives to invest in Early Stage Venture Capital Limited Partnerships and lessening some restrictions.
Helping large business to get it right
ATO's large business focus 2015–16 is now available. It includes information about our focus areas for large business, what we are doing and how we support businesses to get it right.
Most large businesses comply with Australian law by lodging their returns and paying the taxes required. However, there are inherent risks due to complex law, uncertainty, and opportunities for global tax planning. We’re working with large businesses to make it easier to comply, by providing regular information, support and tailored services.
New checklist for the R&D tax incentive
Research and Development (R&D) tax incentive claimants have a new checklist of important information to help you and your clients apply for the program.
Our checklist will help you:
- self-assess the eligibility of your company and the R&D activities you wish to apply for
- source valuable advice on the records you need to keep
- correct mistakes and challenge decisions
- identify red flags we watch for when dealing with promoters of aggressive R&D arrangements.
Administered by the ATO and AusIndustry, the R&D tax incentive provides targeted R&D tax offsets to encourage companies to engage in R&D.
Our fight against phoenix activity
Phoenix activity is the deliberate and methodical liquidation of a company to prevent the company’s creditors from being paid. Most phoenix activity occurs among small to medium businesses and costs the economy up to $3.2 billion per year.
We have partnered with Kochie’s Business Builders to produce five informative videos that explain what phoenix activity is, the cost to the community and how to avoid falling victim.
A number of government agencies collaborate as the Phoenix Taskforce, helping agencies to easily share data to help identify, deter and disrupt phoenix behaviour.
Overseas repayments for HELP and TSL debts
From 1 July 2017, if you are living overseas, have a Higher Education Loan Program (HELP) or Trade Support Loan (TSL), and earn over the minimum repayment threshold, you will face the same repayment obligations as Australian residents.
From 1 January 2016, if you meet these requirements and are living or intend to live overseas for more than 183 days in a 12-month period, you are required to notify us of your new contact details through myGov. This update must be made within seven days of leaving Australia.
The sharing economy and ride-sourcing drivers
Ride-sourcing drivers need to understand the tax implications of their activities.
We have consulted with industry bodies and provided information through our website, social media channels, newsletter articles, media interviews, question and answer sessions through the Uberpeople.net online driver forum, and multiple webinar presentations on our Let’s TalkExternal Link platform.
We have also collected information from financial institutions to identify and contact ride-sourcing drivers directly. After confirming the income received from ride-sourcing activities, we wrote to drivers to explain what is expected.
Working with various industries
We are working with small businesses across Australia as part of our campaign to protect honest businesses.
We visited several industries in Melbourne, Adelaide, Sydney and the Gold Coast. For example, in the restaurant, café and takeaway industry, we visited 150 businesses in the Box Hill central business district in Victoria to discuss registration, record keeping, super and other employer obligations.
When we identify businesses unwilling to work with us, or who cause us concern, we will further investigate their tax affairs.
Corporate tax avoidance
In his appearance before a Senate Estimates committee, the Commissioner of Taxation delivered a clear message to multinationals and large businesses who deliberately seek to avoid their tax obligations. The Commissioner said 'the ATO is resolutely tackling tax avoidance' and highlighted firm action would be taken.
We have released four Taxpayer Alerts as early warnings of our concerns about new or emerging arrangements that may lead to tax avoidance.
Combating multinational tax avoidance
Australia's Multinational Anti Avoidance Legislation (MAAL) strengthens existing anti-avoidance rules for artificial or contrived arrangements entered into by significant global entities with annual global income exceeding A$1 billion.
The MAAL applies to tax benefits obtained by a significant global entity from 1 January 2016, regardless of when the scheme was entered into, and allows us to cancel the tax benefit.
Corporate tax transparency data
The corporate tax transparency Report of Entity Tax Information has published tax information on Australian resident private companies reporting total income exceeding $200 million. This follows information published in December 2015 on certain foreign-owned and Australian public corporate tax entities with a total income exceeding $100 million.
This corporate transparency measure is one of a range of ongoing initiatives addressing community concerns about large corporations and the tax they pay.
Rental properties – helping you get it right
We are increasing our focus on rental property deductions, particularly for properties in popular holiday destinations around Australia.
Property owners in approximately 500 postcodes will receive a letter from us this year, reminding them to only claim deductions they are entitled to claim. Owners should check our guidelines for holiday homes.
Latest initiatives and developments to help foster tax and super compliance.