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  • Consultation Steering Group key messages 23 February 2017

    Review of Consultation Steering group

    Lesley Slevin, Assistant Commissioner, Insights and Engagement, Design and Change Management 

    The current terms of reference were noted and it was identified that the oversight role in relation to the performance of various committees and working groups has not been an intentional focus of the committee. The introduction of non ATO co-chairs to attend the Consultation Steering group (CSG) meetings has been a step towards more intentional oversight.

    Discussions with the majority of the members of the Consultation Steering Group has occurred and some themes were identified – Are the conversations at the CSG sufficiently strategic; could non ATO members be exposed to new consultations outside of the meetings to see if the right people to consult are involved; and the need to have some greater involvement with the non ATO co-chairs of the stewardship groups.

    Michael Croker agreed to connect with the non ATO members before the CSG meeting to ensure appropriate focus at the CSG for members.

    The Consultation Hub will improve the level of information available on who is being consulted on new matters.

    ATO Communications

    David Miller, Assistant Commissioner, Marketing and Communication, ATO Corporate 

    ATO communication activities are influenced by our engagement with members of the various Stewardship groups. The ATO does not use the media for consultation but will response to media questions.

    The ATO commits to providing communications to associations in advance when possible however it some situation this information will be provided simultaneously to when provided to journalists. The ATO will provide more detailed information to associations.

    Members raised some examples of where communication occurred with the Media without associations having any information. A particular concern was Taxpayer Alerts and the release of them without any forewarning for the associations. It was suggested that media releases on Taxpayer alerts could be done in conjunction with associations.

    Members suggested where opportunities permitted it would be beneficial if the ATO could provide advance copies of media releases to Professional Associations to allow them to communicate with their members about ATO strategies and activities. It was also suggested that the ATO consider providing information to Associations under embargo if warranted.

    Large Business Stewardship Group

    Michelle de Niese, Corporate Tax Association, External Co-chair – Large Business Stewardship Group (LBSG) 

    Co-chair advised that the LBSG is run very well by the ATO. Pre meetings are held to set the agenda. There are eight corporates on the forum plus a number of others. Membership is reviewed annually. There is a significant number of issues arising in this space and the chairs need to be firm to ensure the right matters are discussed. The group has introduced one page briefings and questions by exception. This has held managed the large agendas.

    Members of the Consultation Steering group raised a concern about attendance by one representative from the Big 4 firms. The concern stems from the need to improve feedback from this representative to mid-tier firms. A suggestion was made that the Big 4 representative holds a phone meeting immediately after the Stewardship meeting to share thoughts. This suggestion will be taken back to the group for consideration.

    Treasury update

    Brendan McKenna, Corporate and International Division, Revenue Group, Treasury 

    Current and proposed consultations activities:

    • Transparency of debt measure
    • Dividend re-investment schemes (early March)
    • Portfolio Hedging – not clear on the timing of this but not expected till after April
    • Consolidation measures and Div7A – this was due to occur in February however there have been insufficient resources for drafting.

    Confidential consultations – there has been some targeted confidential consultation occurring over past few months and unfortunately there has been some commentary in press about some of this consultation which attributed statements to Treasury which were incorrect. Treasury is considering how consultations should be conducted on sensitive issues going forward.

    Board of Taxation update

    Karen Payne, Chief Executive Officer, Board of Taxation 

    Karen Payne advised that the first Board meeting for 2017 was held on 16 February 2017. The Board will be writing to advisory panel members to get refresh of details and also reinforce confidentiality agreements.

    It has been noted that items on the sounding board have changed from being very technical to broader concepts. Karen was interested in how the Board can use the advisory members to tap into ideas that come onto sounding board. Currently they hold a monthly meeting on a specific topic but is keen to hear feedback on a more effective way to get stakeholder feedback to increase engagement.  

    Other forums or consultations of interest

    The new Enterprise Bill may require a conversation because of uncertainty of what is a small business entity. It does not appear to be addressed on the ATO website and there seems to be a reluctance to set clear guidelines. This has been shared with ATO - Michael Ingersoll, Assistant Commissioner, Individuals and Emma Rosenzweig, A/g Deputy Commissioner, Small Business.

    Numerous submissions and consultations over December 2016 to February 2017

    Stephanie Caredes, The Tax Institute 

    The significant volume of items out for consultations and submissions were identified (14 ATO, 8 Treasury). Non-ATO members raised concerns about the lack of available staff to be able to provide quality responses. It was noted that the required consultations are often driven by Government and the information being required for the February sittings of Parliament. Treasury are conscious of this constraint on industry and factor that into advice to Government.

    Treasury and the ATO indicated that they try to maximise timeframes where possible. Members requested that where there is a short timeframe, if changes could be identified to make review of the material easier and less time consuming.

    Through the Consultation Steering Group, Treasury provides some indication of upcoming broad areas of consultation. The ATO agreed to explore options for a consultation register as well as Government announcements.

    ATO systems outage

    Ramez Katf, Chief Information officer, ATO 

    The impact to tax professionals is the additional services that were going to be provided through the Agent portal and software products have been delayed. The outage impacted the availability of internal systems and has had an impact on the internal development environment. Detailed answer on what occurred cannot be obtained until the physical product is removed and reviewed.

    It has previously been identified that clients desire for a self-service capability which requires the ATO to work with software developers and be able to provide 24/7 service window.  The program of work was geared to deliver this but the outage has delayed this.

    Members noted that there has been some learnings for the profession as well – should they consider disclaimers and stand down clauses in letters of engagement, should they have business interruption insurance and what other interruptions may impact on their business eg. Electricity failure.

    Advice products

    Will Day, Deputy Chief Counsel, Public Advice and Guidance 

    The ATO is continuing to:

    • produce a range of advice and guidance products and, through consultation, improving the quality and usefulness of our public advice and guidance which are being well received. The ATO is consulting earlier, and ensuring that prioritised public advice and guidance is produced at the time it is needed. Sometimes challenging to produce in the timeframes imposed by legislative process.
    • partner with stakeholders to develop meaningful safe harbours and practical guidance in the form of Practical Compliance Guidelines (PCGs), which continue to be generally well received by taxpayers and advisers
    • produce public rulings in the form of Law Companion Guidelines (LCG) as new law is introduced to Parliament, and while the consultation process for these products varies, they continue to be well received by taxpayers and advisers.

    The ATO has established a Public advice and guidance on-line community on the Let’s TalkExternal Link infrastructure. It is one of the ways the ATO is engaging with the community to understand the issues that matter most to taxpayers and consult on particular matters. The ATO regularly requests feedback on matters like the effectiveness of our advice products, examples stakeholders would like to see, and what form the guidance products should take.

    The ATO has identified that it needs to provide greater clarity on what is being consulted on and what is expected from participants. Members’ concerns regarding the consultation undertaken where there were no specific working groups for Draft TD2016/D4 and TD 2016/D5 and PSLA 2010/4 was discussed. Members were briefed on the consultation undertaken for TA 2017/1 and the proposed consultation for a draft LCG on the Diverted Profits Tax measure.

    TA 2017/1 was used as an example to raise concerns regarding taxpayer alerts. A concern was expressed that the broad content of the Alert sent the wrong signal about the scale and extent of the problem and created difficulties for taxpayer groups to respond to the Alert – including to identify the precise ‘scope’ of the mischief being targeted. The broader topics and associated communications are giving the impression that there is a wide scale of involvement in areas that are outside the law. Suggestions included:

    • the alert or associated media releases give a clear sense of the scale of the problem
    • the ATO close the loop and provide some information about how effective the alert has been in stopping the behaviour
    • share the alerts with the associations before they are issued using an embargo.

    It was also noted that where Taxpayer Alerts are confined to single issues – taxpayers will have a clearer sense of the precise nature of the concern.

    Report on ATO consultation activity

    Overview 

    Report provided an update on consultation activities between November 2016 to January 2017 including Stewardship group meetings, new matters raised and closed, changes to special purpose and stakeholder relationship groups.

    New matters (9)

    Matters registered November 2016 to January 2017

    201657 Trust vesting

    201658 Making it easier for legal professionals to access deceased clients’ ATO information

    201659 Non-arm’s length limited recourse borrowing arrangements (LRBAs)

    201660 Proposed amendments to GSTR 2006/9

    201661 Superannuation new measures

    201662 Improving the Division 293 experience

    201663 Improving small business benchmark useability

    201664 GST on digital products and services - Electronic distribution platforms

    201665 Foreign currency conversion legislative instrument

    201701 Scholarships

    Completed matters (12)

    Matters completed November 2016 to January 2017

    201659 Non-arm’s length limited recourse borrowing arrangements (LRBAs)

    201658 Making it easier for legal professionals to access deceased clients' ATO information

    201657 Trust vesting

    201654 Tax treatment of retail premiums received by resident and non-resident shareholders in a renounceable rights offer

    201651 Government specific FBT web content

    201649 A fairer approach to penalties

    201643 The application of section 99B of the ITAA 1936 to trust capital gains

    201620 Reportable Tax Position Schedule

    201619 Corporate Tax Governance Review Guide (CTGRG)

    201606 Combating the threat to information security

    201567 Common Reporting Standard (CRS)

    201510 Safe harbours – Small and medium enterprise

    Matters in progress >12 months (2) 

    201498 - Interpretation issues regarding new sub-division 768-A

    Paul Korganow, Assistant Commissioner, Public Groups International 

    There have been three advice products produced TR 2016/D2 – comments were due late last year but no submissions were received. A joint professional bodies’ submission was received in relation to TD 2016/D6 and TD 2016/D7 (with most of the feedback focussed on TD 2016/D7). It is felt that no further consultation is necessary and feedback received in the submissions will be considered. It is anticipated these products will be released in March depending on comments received.


    201508 - Infrastructure privatisation

    Peter Maher, Director, Public Groups International 

    The Infrastructure Framework document was released in draft form for consultation on 31 January 2017. There were some delays due to the need to link with the release of TA 2017/1. Since the release, there has been a lot of consultation undertaken with a wide range of parties. There have been a significant number of requests for the ATOs infrastructure team to speak with stakeholders, with the ATO attending 14 presentations since the documents release, with more to come.

    The ATO engaged two external advisors to review the Infrastructure Framework document before it issued for wider consultation.

    Spot check on matters (3)

    201512 - Safe harbours – Fringe benefits tax (FBT) and remuneration

    Anna Longley, A/g Assistant Commissioner, Technical Excellence Services, Private Groups and High Wealth Individuals; and Phil Turnour, Assistant Director, FBT Risk & Intelligence, Private Groups and High Wealth Individuals 

    Current progress of the three FBT safe harbours:

    • PCG 2016/10 – Fleet Cars: A draft Q&A document containing final responses to questions from stakeholders on the application of the PCG has been reviewed and endorsed by members of the Safe Harbour Working Group. Currently liaising with the Safe Harbour Working Group and stakeholders how to best publish and communicate the Q&A document.
    • Infrequent or minor use of exempt vehicles: Draft safe harbour proposal includes stakeholder feedback. Starting to work on the draft Practical Compliance Guide.
    • Minor and Entertainment Benefits: The scope of the proposal is ambiguous as some information indicates it is to be limited to meal and entertainment benefits and other information indicates a broader application. Clarification is also needed about the treatment of benefits provided via Christmas parties. The issue will require discussion the Safe Harbour Working Group. Information suggests that minor amendments to existing interpretative products might be sufficient in easing current complexities but this will need further research and analysis.

    201657 - Trust vesting

    Richard Mold, Public Advice and Guidance Centre, Tax Counsel Network; and Gavin O’Shea, Director, Tax Counsel Network 

    Targeted consultation has been completed with stakeholders directly approached in their capacity as representatives of the organisations / bodies which they formally represented on the “Trusts Working Group 1 – Closely Held Trusts”.

    201662 - Improving the Division 293 experience

    Cathryn Hummel, Director, Employer & Individual Client Engagement, Superannuation 

    The current Division 293 experience can be overwhelming, confusing and complex. The ATO has consulted with a range of stakeholders, including members of the Super Industry Relationship Network, Private Groups Stewardship Group, Tax Practitioner Stewardship Group and a number of tax agents in Hobart with Division 293 clients.

    Consultation feedback resulted in improvements to the cover letter sent at the end of 2016. These changes included simplifying the language, the use of headings and more information on what Division 293 is and how individuals can pay their liability.

    During peak lodgement periods (November and April to June) the ATO issues SMS and emails to myGov clients to let them know their Division 293 assessment will soon arrive in myGov. Last year the ATO started sending SMS and emails to notify first time Division 293 clients. SMS and emails sent to first time clients were supported by new web content on ato.gov.au

    Stakeholder feedback was that the term 'Division 293 tax' is confusing. The ATO will soon refer to Division 293 tax as 'Addition Tax on Concessional Contributions (Division 293 Tax)' for administrative purposes. This term will help provide clarity on what the tax is.

    The ATO continues to investigate options to improve the client experience including working on a concept letter that would combine the Division 293 cover letter and Notice of Assessment into one digital myGov message or one paper notice and redesigning Division 293 web content.

    CSG action items

    It was agreed to close the following action items:

    • CSG 1611/1 Future of the tax and BAS profession consultation group as an ongoing stakeholder relationship group
    • CSG 1611/2 Timeframe for introduction of consolidation and Division 7A amendments
    • CSG 1611/3 Push notification service from the Sounding Board
    • CSG 1611/4 Review of Consultation Steering Group.
      Last modified: 24 Apr 2017QC 51873