• News and latest initiatives

    Find out about our latest initiatives and developments:

    Good guidance - determining exploration expenditure deductions

    We’re making changes to how we produce and provide public advice and guidance so we can give you advice that is timely and reflects commercial realities.

    The following will help to determine the deductibility of expenditure on mining and petroleum exploration and prospecting:

    For more information please email EnergyResources@ato.gov.au

    Re-characterisation of income from trading businesses

    Recently a taxpayer alert was issued advising taxpayers we are reviewing arrangements attempting to fragment integrated trading businesses in order to re-characterise trading income into more favourably taxed passive income, resulting in a reduction of the overall rate of tax applicable to the business. These arrangements have the potential to erode the corporate tax base.

    A particular area of concern is stapled structures.

    While stapled structures are one mechanism we see regularly being adopted in these arrangements, our concerns exist even if the entities are not stapled.

    We are engaging more closely with taxpayers who have proposed these arrangements to explore the issues of concern, and ensure any stapled structures or business fragmentation arrangements do not seek to avoid the payment of corporate tax.

    Taxpayers and advisors who implement these types of arrangements will be subject to increased scrutiny.

    Tackling tax crime for the community

    We are using the full force of the law at a local, national and international level to fight tax crime and recoup billions of unpaid tax dollars.

    Tax crime is when a person or group deliberately withholds information or provides false or misleading information to avoid paying their fair share of tax.

    We also partner with a network of local and international agencies and sit on multi-agency taskforces such as the Tax Avoidance Taskforce, Serious Financial Crime Taskforce and Phoenix Taskforce.

    Recouping lost tax dollars from tax crime means more funds for vital public services such as health and education, and enables a level playing field for the majority who do the right thing and pay their fair share of tax.

    See also:

    2014–15 Report of entity tax information

    Each year, legislation requires us to publish the tax information of certain large companies in the Report of Entity Tax Information.

    This year’s report contains the 2014–15 financial year tax details of 1,904 companies including:

    • 1,579 Australian public and foreign-owned entities with an income of $100 million or more
    • 325 Australian-owned resident private entities with an income of $200 million or more.

    This report also includes details of entities not previously listed in the 2013–14 year report.

    We're doing this to increase transparency by publicly reporting the tax information of large corporate taxpayers. Greater transparency of taxpayer affairs encourages corporate taxpayers to do the right thing. It also promotes community confidence in the tax system.

    Our tax system provides a range of incentives, deductions and offsets which legitimately minimise tax payable. Not paying tax, doesn't necessarily mean tax avoidance.

    Our data, analytics and engagement with corporates, helps us take action on non-compliance as soon as we identify it.

    See also:

    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.

    See also:

    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.

    See also:

    Updated Tax risk management and governance review guide

    In January 2017 we published an update to the Tax risk management and governance review guide.

    The guide is a best practice framework designed to reduce tax risk by guiding large organisations on how to develop or improve their tax governance and internal controls includes. It includes two new sections:

    • Director’s summary – which outlines the director's responsibilities and 'initial areas of focus' for tax-risk management and governance reviews by the ATO.
    • self-assessment procedures that are designed to help all stakeholders undertaking tax governance reviews.

    The ATO constantly strives to deliver the best possible tax and super experience, including our tailored services to help you get things right.  We are committed to preserving the integrity of the tax system and we will continue to work with taxpayers to help them get it right the first time.

    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.

    See also:

    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.

    See also:

    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.

    See also:

    Deceased estates

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    Innovation incentives

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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. This included visits to over 960 businesses in the restaurant, café and takeaway industry, and the hair and beauty industry, to talk about 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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    See also:

    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.

    Last modified: 08 Mar 2017QC 47199