• NTLG Minutes - 18 June 2015 meeting

    Meeting details

    Venue:

    Australian Taxation Office, Sydney
    L12.719 Function Room, 52 Goulburn Street,
    Sydney CBD

    Date:

    18 June 2015

    Start:

    9:30am

    Finish:

    3:40pm

    Acting Chair:

    Andrew Mills, Second Commissioner, Law Design and Practice Group

    Attendees

    Organisation

    Name

    ATO

    • Neil Olesen, Second Commissioner, Compliance
    • Andrew England, First Assistant Commissioner, Integrated Tax Design
    • Jeremy Hirschhorn, Deputy Commissioner, Public Groups
    • Peter Coakley, Assistant Commissioner, ATO Corporate
    • Jorge del Busto, Senior Executive Advisor, Office of the Chief Tax Counsel
    • Annalissa Alexander, Director, Corporate Committee Services (Secretariat
     

    Treasury

    • Paul Horrocks, Principal Adviser, Corporate and International Tax Division, Revenue Group
     

    CPA Australia

    • Mark Morris
    • Andrew O'Bryan
    • Alexis Kokkinos
     

    Corporate Tax Association

    • Michelle de Niese
     

    Chartered Accountants Australia and New Zealand

    • Michael Croker
    • Tony Stolarek
    • Andrew White
     

    Institute of Public Accountants

    • Tony Greco
    • Lance Cunningham
     

    Law Council of Australia

    • Mark Friezer
    • Adrian Varasso
     

    National Tax and Accountants Association

    • Rod Wilson
     

    Taxpayers Australia

    • Peter Adams
     

    The Tax Institute

    • Stephen Healey
    • Tim Neilson
    • Thilini Wickramasuriya
    • Stephanie Caredes (Professional Association Bodies Agenda submissions coordinator)
     

    Independent member

    • Keith Clissold
     

    Apologies

    Organisation

    Name

    Australian Taxation Office

    • Chris Jordan, Commissioner of Taxation
     

    Treasury

    • Rob Heferen, Executive Director, Revenue Group
    • Luise McCulloch, General Manager, Corporate International Tax Division
     

    Chartered Accountants Australia and New Zealand

    • Grant Wardell-Johnson
     

    Additional guest attendees

    Organisation

    Name

    ATO

    • Erin Holland, Deputy Commissioner, Tax Practitioner, Lodgment Strategy and Compliance Support (Agenda item 1.1)
    • Mark Konza, Deputy Commissioner, Public Groups International
      (Agenda items 1.3 and 1.4)
    • Janine Clark, Acting Assistant Commissioner, Digital Delivery, ATO Corporate (Agenda item 2.1)
    • Daniel Bamford, Assistant Commissioner, Digital Program, Customer Services and Solutions (Agenda item 2.1)
    • Debbie Hastings, First Assistant Commissioner, Review and Dispute Resolution
      (Agenda item 2.2)
    • Damien Browne, Assistant Commissioner, Review and Dispute Resolution
      (Agenda item 2.2)
    • Kirsten Fish, Chief Tax Counsel, Tax Counsel Network (Agenda item 2.3)
     

    Treasury

    • Brendan McKenna, Manager, International Engagements Unit via phone (Agenda item 1.3)
     

    Minutes

    Meeting open - attendance and apologies

    End of example

    Chair’s opening remarks including confirmation of agenda, attendance and apologies

    The Chair opened the meeting and welcomed Paul Horrocks from Treasury, Andrew White representing CAANZ and Peter Adams from Taxpayers Australia.

    Apologies were noted for the Commissioner (Chris Jordan), Rob Heferen and Luise McCulloch from Treasury and for Grant Wardell-Johnson from Chartered Accountants Australia and New Zealand.

    The Chair noted that Brendan McKenna from Treasury will be joining by phone for the discussion at agenda item 1.3 on the multinational tax avoidance measure, and that the discussion of the ‘safe harbours’ project will be brought forward to immediately after agenda item 1.1.

    Open NTLG action items

    Members agreed that the following action item will remain as ongoing.

    NTLG 0312/4

    Rethinking Compliance

    Members noted that this action will be discussed at a subsequent NTLG meeting in 2015.

    Members agreed that the following action item was completed.

    NTLG 1503/1

    Clean up the existing suite of rulings and other products

    Members noted that this action item had been completed last March and that an update on this project will be provided at agenda item 2.3 Review of ATO Guidance and Advice.

    The Chair noted that the NTLG minutes from the 4 March 2015 meeting have been published and are available on the ATO website. It was agreed that facilitating access to previous NTLG minutes will be discussed further as part of the scheduled discussion of the ATO website under agenda item 2.1.

    Segment 1: Issues of significance in the tax law interpretation, policy and law design space

    Agenda item 1.1: Changes in environmental factors "On and Over the Horizon"

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    Michael Croker presented on how the relationship between clients, the ATO and tax practitioners is evolving, with the ATO facilitating the client experience with the tax and superannuation system, using technology based solutions, and tax practitioners increasingly focussing on the provision of premium tailored services, acting as trusted intermediaries between their clients and the ATO.

    There is a diversity of views on how tax practitioners are reacting to change. Some may see the ATO as a potential disrupter of their direct relationship with their clients. Others see the potential for tax practitioners to add value, drawing on their knowledge of their clients’ needs and circumstances in providing them with tailored advice.

    Members also noted the scope for a more collaborative assurance model with the ATO particularly where more complex tax calculations are involved and where tax practitioners can assist in sorting out potential problems.

    Members noted the emerging trends in digital interactions in other jurisdictions like the UK, Sweden and New Zealand and also those being promoted by the Digital Transformation Office, including the use of cognitive technology in tax, data analytics, smarter data, online reporting and new identity authentication procedures for the digital use of government services. There is also scope for more shared services across government agencies.

    More competition for tax practitioners is envisaged from other sources, including offshore advisers and there might be a need for tax practitioners to diversify more broadly their services as business service providers, with the scope for focussing on particular specialised skills.

    Another area of community concern is related to big data access and privacy rights, although it was acknowledged that there is a generational mindset shift, with younger people being more open to the sharing of their information. The ATO noted that it is very open to outline how it addresses privacy rights and the parameters it has around it.

    Members thanked Michael Croker for a thorough and thoughtful conversation. It was suggested that for a future NTLG meeting a discussion could be held on the use of big data.

    Members noted that Government support and law changes will be needed for some of the initiatives being envisaged under the ATO’s Reinvention program, such as single touch payroll and the mandatory adoption of technology platforms. The support of an overarching strategy by Government will avoid the program to be perceived as only of interest to the ATO.

    In concluding, members noted that it was not possible to have complete certainty on how the ATO and the tax practitioners’ role will develop in the future, but that the ATO’s Blueprint provides a useful guidance on the ATO’s strategy and priorities going forward. Members noted that it was very useful to have an advance indication of potential changes affecting tax practitioners and their clients.

    Agenda item 1.2: Update on key events July to September 2015

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    Members noted the update provided.

    Agenda item 1.3: The Tax White Paper process / other updates from Treasury and the ATO

    End of example

    The Tax White paper process

    Paul Horrocks advised the Treasurer has announced an extension to the submission period for the Tax White Paper Discussion Paper until 24 July 2015, to provide more time for interested parties to put their views into the Tax White Paper process in relation to key interactions between the age pension, superannuation, taxation and employment.

    Over 700 submissions have been received so far. Non-confidential submissions can be found on the Tax White Paper website.

    Initial themes emerging from the limited sample of submissions that have been considered include:

    • there is broad agreement the system is too complex and that dividend imputation should be retained;
    • views are divided on a number of different issues such as GST reform, corporate tax reform and small business reforms; and
    • for some issues (such as superannuation concessions, negative gearing and personal income tax), there is agreement that reform is needed, but no agreement on what the reform should be.

    Treasury is continuing to work towards the Green Paper, which will be released later this year. This will be followed by another round of consultation prior to the release of a White Paper before the election.

    Engagement with the states has been taking place at officials’ level. The interactions between tax and federation reform will be the focus of a leaders meeting, hosted by the Prime Minister, and expected to take place in July. This will be followed by a meeting between the Treasurer and state and territory counterparts to discuss tax reform, which is expected to take place in August.

    The Tax White Paper website has been used as a communication tool to make tax more accessible and easier to understand for interested members of the public. Responding to a comment by members, it was clarified that no wider use of TV information was planned.

    Board of Taxation update

    The Board of Taxation has played a key role in facilitating consultation through its working groups on large business, international tax and small business issues. The ATO is represented by Anthony Marvello on the large business working group, Paul Korganow on the international tax working group and Mike Ingersoll on the small business working group.

    The large business tax working group is chaired by Craig Yaxley and is focussed on business tax issues relating to economic activity in Australia (imputation, corporate tax rate and base, depreciation and losses).

    The international tax working group is chaired by Ann-Maree Wolf and is focussed on taxation of inbound and outbound investment.

    The small business tax working group is chaired by Mark Pizzacalla and is focussed on choice of structure, the efficacy of small business tax concessions, the interaction between the personal and business tax systems, and compliance and administration issues.

    The establishment of these working groups and the issues being examined by them has been determined by the Board, not by the Government, to assist in the development of the Green Paper. It is not envisaged a separate paper will be published by the Board.

    The Board made a submission in response to the discussion paper. In its submission the Board recommended that Board reports be released within three months of being provided to Government and also recommended against the establishment of an additional tax reform body.

    On 4 June 2015, five Board of Tax reports were released, to form part of the national conversation on tax reform.

    On 12 May 2015 the Government asked the Board to undertake two new projects:

    • to undertake consultation on implementing G20/ OECD rules to neutralise hybrid mismatch arrangements, reporting by March 2016; and
    • work with businesses, Treasury and the ATO to develop a voluntary code on increased public disclosure of tax information by companies, particularly by large multinationals, reporting by May 2016.

    Members supported the early release of Board reports and also noted that for some issues, like those addressed in the Board’s report on Division 7A, there might be a need for an earlier Government response than the timeline envisaged in the Tax White Paper process. Members from the professional bodies agreed to make representations to Government on any urgent issues that may require attention, copying the ATO on any related correspondence.

    The legislative program

    Regarding the legislative program, Treasury noted that 13 Bill packages containing a total of 28 measures have been prepared for introduction to Parliament for the 2015 Winter Sittings and parliamentary amendments are currently being progressed.

    A number of announced but unimplemented measures (ABUM) are to be introduced for the 2015 Spring sittings, including the taxation of financial arrangements hedging rules, and taxation of financial arrangements provisions on foreign currency.

    Of the original 37 ABUMs the Government committed to proceed, 20 have received Royal Assent, five were introduced as part of the 2015 Winter Bill packages and 12 are still to be introduced.

    The legislation on the Investment Manager Regime (IMR) amendments was passed last Wednesday and applies from 2015-16. Closing the loopholes on the Offshore Banking Unit (OBU) regime was also passed last Wednesday. Taxpayers can elect to apply the IMR amendments to previous income years. The small company income tax cut was also passed, effective from 1 July 2015.

    Members noted that in relation to previously announced measures on amendments to the consolidation regime and earn out arrangements, care needed to be taken in providing appropriate protection mechanisms for taxpayers that had relied on previous announcements. It was noted that transitional rules may be provided with a similar effect to a protection measure.

    Budget and other legislative developments

    Consultation on the exposure draft of the multinational tax avoidance measure closed on 9 June, with 18 submissions received. Treasury is working with the ATO in developing guidance on the measure and looking at options to facilitate compliance if no arrangements are in place by 1 January 2016. Submissions have raised the need to clarify the meaning of terms such as the “low or no tax’ condition.

    ATO is working with Treasury in an integrated form on the multinational tax avoidance measure. The aim is to have more purposive legislation. Consultation on ATO guidance is planned around September 2015. Key is distinguishing the activities of a representative office versus active assistance on sales.

    Members noted that there was limited information and lack of awareness on the scope of the country by country reporting measure. Treasury noted that draft legislation on the measure will be released for consultation next month. ATO is supporting Treasury’s work on this measure.

    With respect to the Foreign Investment Review Board (FIRB) measure it was noted there is a voluntary disclosure period ending 30 November 2015 and that reminders will be provided, similar to those that applied under project DO IT. Intermediaries that may have assisted in the misleading or avoidance of FIRB scrutiny are being looked at.

    With respect to the tax transparency measure, the aim is to ensure the disclosure of information is accurate and well understood by the community. A process of confirmation of information to be published is built in. There will be three lists of companies ordered alphabetically and with searchable formats. Supporting material will assist in explaining the information being disclosed. Publishing is anticipated by the end of 2015.

    Consultations on whether privately owned companies will be carved out from the tax transparency measure close on 3 July 2015, with the possibility of draft legislation being introduced in the Spring sittings.

    Members noted that the proposed voluntary disclosure code, on which the Board of Tax is consulting, may supersede the need for the tax transparency measure.

    With respect to the development of future legislation, members commented on the desirability of early engagement by Treasury and ATO, with the proposal for the Commissioner’s statutory remedial power being a good example of this early engagement and similarly with the current development of the Taxation of Financial Arrangement (TOFA) rules.

    Members suggested the possibility of a tripartite review of the integrated law design process, now that several examples of collaborative interactions have emerged. Andrew England noted that the ATO is currently planning to undertake joint work with Treasury, with potential support from the Board of Tax, on the drivers of complexity in law, which may feed into the White Paper process. A consultant will be engaged to undertake research with stakeholders and users about what drives complexity, followed by engagement with stakeholders to try and build a consensus as to what improvements can be made to address the issue. It was acknowledged that taxpayers search for certainty is one of the drivers of complexity.

    Agenda item 1.4: Update on international related initiatives

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    Mark Konza noted that the Joint International Tax Shelter Information and Collaboration group had now expanded to 31 countries, with the Commissioner being asked to lead this group. An analysis of tax planning in the pharmaceutical industry is being considered by the group.

    With respect to the International Structuring and Profit Shifting (ISaPS) project, 41 audits are under way, 12 on technology companies and three on pharmaceuticals.

    Project DO IT closed in 2014, estimated to have raised $231 million in tax, with $4.5 billion of uncovered assets. Analysis of disclosures is now proceeding.

    Division 815 Working Group assisted in 2014 with the discussion of administrative issues related to the implementation of the transfer pricing rules and is currently working on consequential adjustments, further work on simplification measures, the operation of the Advanced Price Agreement program and penalties in respect of transfer pricing benefits. The Working Group will finish its activities at the end of 2015.

    The Large Business Liaison Group has agreed to devote some place in its agenda to international issues. In case there is a need for a Working Group to undertake further activities in 2016, guidance will be sought from the NTLG.

    Guidance and risk assessments are being considered to ensure revaluation of internally generated intangible assets are done in accordance with accounting standards, as they are relevant for the operation of the thin capitalisation rules. Work is also progressing on guidance for lease in lease out arrangements and for marketing hubs. A report on Advance Price Agreements to 30 June 2015 will be tabled at the September 2015 NTLG meeting.

    Jeremy Hirschhorn noted that the effective tax borne analysis submitted by the ATO at the Senate Inquiry on Corporate Tax Avoidance was aimed at providing a standardised approach that the Senate Committee could request taxpayers provide to the Committee, given that the disparate measures provided in submissions had the risk of misleading the inquiry.

    The tool, based on accounting data, allows a consistent examination of tax paid on profits linked to Australia from a global supply chain. It is part of the risk metrics used by the ATO to assess global supply chains and it is not a recommendation for a change in the basis of taxation. It could assist the separate work that the Board of Tax is conducting on a voluntary corporate disclosure code.

    Segment 2: Strategic initiatives to improve the tax system and its administration

    Agenda item 2.1: The Reinventing the ATO program

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    Update on the Reinventing the ATO program

    Neil Olesen tabled handouts which noted the key achievements of the Reinventing the ATO program to date. Similar tools are also used to outline upcoming deliverables. The Blueprint, published earlier in the year, provides guidance on the body of work coming up over the next years, of which detail is being prepared.

    The digital agenda, to be presented by Daniel Bamford, sets out a key strategic direction of where the ATO is heading. Janine Clark will subsequently present recent work on the redevelopment of the ATO website, including its easier search-ability function.

    Update on the Contemporary Digital Services Program - including focus on the redesign on the ATO website and what we’re doing to improve our web presence

    Daniel Bamford noted that under the Government’s digital transformation agenda, digital services provided by the ATO will be integrated with the rest of government. The Digital Transformation Office has developed a digital standard that defines how all services with greater than 50,000 interactions per year must be designed to operate digital from end to end. New or re-designed services must align to the standard by December 2017.

    On 1 July 2015 new ATO online services will be deployed to support the needs of Tax Time. For Individuals and Individuals in Business (Sole Traders), this will include (1) a personalised home page with messaging to clients; (2) management of PAYG instalments and activity statements across multiple roles; (3) enhanced payment functions across multiple roles; (4) upfront payment commitments and improved eligibility rules for income tax account payment plans; and (5) the ability to update details, such as contact details and financial institution details, across multiple accounts. Contextual and warning messages will be a part of the offering.

    Responding to queries by members, it was noted that there have been three rounds of external testing with the public and that the ability to schedule payments will be included.

    The new ATO app functionality will be delivered across three releases during the tax time period:

    • the first release, on 1 July 2015, will include updates to rates and other Tax Time related content
    • the second release, on 24 July 2015, will include a ‘myDeductions’ tool (which will allow users to record and upload deduction data into their myTax16 return).
      • It was clarified that the need to substantiate records remains and that an option to assist with this would be to take photos of receipts and save them as PDF records sent to a personalised e-mail address or exported to a CSV file format.
      • The ATO is looking at integrating tax agents’ access to their clients’ data before 30 June 2016.
      • The ATO application for mobile devices will also include from 24 July 2015 a ‘business performance check’ tool, providing SMEs with benchmarking for comparisons. Responding to a query by members, it was noted that the currency of the benchmarking will be determined by the availability of statistical data.
       
    • the third release in August 2015; voice authentication, will enable individuals to enrol and use their voiceprint to verify their identity and access online services via the app.

    Other near term deliverables for ATO Online Services will be developed in consultation with software developers.

    Redevelopment of the ATO website

    Janine Clark noted that the redevelopment of the ATO website is just the start of an evolving journey.

    Enhancements, planned for July 2015, will be made to the visual design, navigation and content and will transform ato.gov.au into a simplified, easy to use, contemporary site. These enhancements will include:

    • content rationalisation and simplification
    • improved navigation, including a drop down ‘mega menu’ and simplified interactions
    • improved search functionality
    • targeted promotional messages, supported by real time social media message feeds
    • optimisation for mobile and different screen sizes
    • strategically placed content, aligned to user needs, not ATO business requirements.

    The search function has undergone significant improvement to optimise search results for web content. An enhanced search results page provides users with increased functionality and improved pathways to quickly find the information for which they are searching. These changes include results filtering, search term glossary, quick links and dynamic results clustering.

    Importantly, current features and tools will remain available and broken links will be further reduced.

    We are also introducing a beta site. The beta site is a new way to drive and shape change on ato.gov.au. This website is a testing ground for new ideas and features we are considering introducing on our main website, ato.gov.au.

    It was noted that more information is available at ato.gov.au/transformation

    Responding to a request by members, ATO undertook to look at how to provide website access to previous NTLG minutes. Alexis Kokkinos and Lance Cunningham will be consulted on this. A representative from CCH and /or Thomson Reuters will also be invited.

    Action item: NTLG 1506/1
    Due date: Out of session
    Responsibility: Acting Assistant Commissioner, Digital Delivery, ATO Corporate

    Providing website access to previous NTLG minutes
    To consult with nominated NTLG members and stakeholders on how to provide website access to previous NTLG minutes.

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    Agenda item 2.2: Improving dispute resolution

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    Debbie Hastings and Damien Browne presented on this topic. The Committee from the House of Representatives reporting on its Inquiry into Tax Disputes had made 20 recommendations, a number of which were already being implemented by the ATO.

    Key themes coming up from the hearings were the setting up of a separate unit within the Office to handle disputes resolution and the need to ensure fairness and transparency in dealing with taxpayers. From 1 July 2015 all objections work will be handled by the separate Review and Dispute Resolution (RDR) business line.

    The communications protocols between RDR and compliance staff are being strengthened, following consultations with the Dispute Resolution Working group. They emphasise the principles of openness and transparency, with no black boxes in communications and are also accompanied by a service commitment statement. Members will be invited shortly to provide feedback on these draft documents, which will be circulated after the meeting, at an out of session discussion to be organised for next week.

    Action item: NTLG 1506/2
    Due date: ASAP out of session
    Responsibility: Assistant Commissioner, Review and Dispute Resolution

    Inviting feedback from NTLG members on communication protocols between RDR and compliance staff
    NTLG members will be invited to provide feedback on the draft communications protocols between RDR and compliance staff at an out of session discussion to be organised for next week.

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    It was noted that the outcome of some settlements may feed into public guidance, where there is scope for lessons on dispute resolution approaches to be disseminated more widely and assist in building capacity.

    Regarding the recommendations on fraud or evasion from the House of Representatives Committee, the ATO noted that the current practice statement may need to be revised to provide appropriate guidance.

    Agenda item 2.3: Review of ATO Guidance and Advice

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    Update on potential recommendations / output from the review of public advice and guidance

    Kirsten Fish provided an update on progress on the review. Key findings of the review are the need to improve oversight, facilitate early engagement, increase certainty, tailor guidance and maintain the body of guidance.

    To address these findings, the ATO Executive has endorsed a number of recommendations including: (a) a centralised management, end to end, of the production of guidance and advice; (b) a new operating model in place by the end of 2015, under the leadership of Fiona Dillon;
    (c) conversion of ‘high value’ general guidance products to products with a higher level of protection; (d) the use of data analytics in a better way to enhance advice products; (e) rewrite some practice statements as instructions to staff and (f) update existing suite of products with more current, realistic examples.

    There will also be a more useful way of presenting advice and guidance on the website, including factsheets, with the ability for clients to navigate from simple explanations to the legislation and rulings that underpin the explanations.

    At the 10 September 2015 NTLG meeting there will be a further discussion of the review of private advice, of which the myRuling product is part of. Prior consultation on a discussion paper will be run during July and August. Input and comments are also being sought through the Let’s Talk facility on the website.

    Advice will be tailored to suit taxpayers’ needs, including the level of protection they are seeking to obtain.

    Responding to queries from members on the ATO’s approach to practice statements (and the requirement for staff to exercise judgment in their application), it was noted that they are being rewritten as instructions to staff, in plain English, with an associated communication strategy on how they are to be used. Further, as part of the Reinvention program more generally, we are focussed on empowering staff to take decisions and escalate as needed. Increased early engagement will also facilitate clients raising any concerns they may have early in the process.

    Also responding to a query from members, it was clarified that with respect to the issuing of private rulings, when facts are complex, a summary of facts is presented to minimise misunderstanding before issuing, but this is not the ordinary practice when facts are not controversial. This is another practice that will be considered as part of the review of private advice.

    It was reiterated that the ATO retains its concern on franked dividends being funded by capital raisings. The corresponding alert remains and the ATO is now looking at what further guidance might be issued.

    Update on the project to ‘clean up the existing suite of rulings and other products’ (related action item NTLG 1503/1)

    The ATO has reviewed the updated list of 33 tax rulings and other products compiled by The Tax Institute (TTI) with feedback from members and concluded that in the first instance a number of rulings can be fast tracked, updating the references, providing more realistic and up to date examples and other similar straightforward amendments. The remaining list is currently being reviewed within the ATO with a view at shortlisting with TTI and other NTLG members those that can be reviewed and updated by the end of the year. The list of initially identified rulings to be updated will be circulated out of session to NTLG members.

    Action item: NTLG 1506/3
    Due date: Out of session
    Responsibility: Chief Tax Counsel, Tax Counsel Network

    Providing NTLG members with the list of initially identified tax rulings to be updated.
    The list of initially identified rulings to be updated to be circulated out of session to NTLG members.

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    Agenda item 2.4: Red tape reduction

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    Update on the NTLG ‘safe harbours’ project

    Jeremy Hirschhorn and Michele de Niese reported that the safe harbours project was progressing to plan, with each of the six safe harbours working groups being on track in their exploration of initiatives to reduce red tape and building the corresponding business cases to be submitted to the Safe Harbour Steering Group (SHSG).

    The FBT and remuneration safe harbour working group has progressed work on a “tools of trade” initiative that has the potential to significantly alleviate compliance costs for businesses with large fleets of vehicles. Significant progress has also been made on an initiative that will alleviate GST compliance costs on barter transactions.

    Proposed initiatives are to be developed by September 2015 and, subject to their endorsement by the SHSG, their corresponding implementation solutions should be ready by December 2015. A status report on progress will be submitted to the NTLG at its 10 September 2015 meeting. The continuation of activities by the safe harbour working groups is contingent on their ongoing work and progress of red tape reduction initiatives.

    A comment was made that in the context of the draft legislation on the taxation of employee share schemes, the power given to the Commissioner to approve safe harbour valuation methodologies through legislative instruments was more restrictive than what members had proposed in submissions.

    Treasury supports the work being undertaken in the safe harbours project, which fits well with the Government’s deregulation agenda and ongoing work by the Board of Tax.

    It was clarified that safe harbours was a label that covers different forms of red tape reduction for taxpayers through initiatives that have limited revenue risk and these are not necessarily limited to administrative measures.

    A survey of compliance costs is being undertaken by the Corporate Tax Association, which will assist in the quantification of the red tape reduction to be achieved by the safe harbour initiatives.

    Update on ATO deregulation activities – (Attachment 2.3 – for noting)

    Members noted the update provided.

    Agenda item 2.5: ATO Consultation Arrangements

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    Update on the post-implementation review of the ATO’s consultation arrangements

    Peter Coakley noted that the report by Russell Miller will be discussed by the ATO Executive next Tuesday, 23 June 2015. Once finalised, it will be circulated to the NTLG.

    Russell undertook a number of interviews and also looked at best practice in other institutions like the Australian Competition and Consumer Commission (ACCC) and the Australian Securities Investments Commission (ASIC). His main conclusion, drawn from all 82 survey respondents, was that:

    ‘the current consultation system is fit for purpose. No significant change is required. The focus should be on continuing to refine the ATO’s consultation processes to improve the efficiency of the system and the outcomes it produces.’

    The results are positive, with only a very low percentage of negative responses received.

    The suggestions made in the Russell Miller’s draft report follow five major themes:

    • improving stewardship committee engagement by reducing the number of permanent attendees from the ATO and represented associations and introducing a member appointment regime to ensure healthy rotation;
    • ensuring we seek out and publish an estimated completion date for each matter under consultation;
    • improving interactivity between stewardship committees through a regular meeting of chairs of the stewardship committees;
    • publicising the consultation material available on the ATO web site and linking that material to australia.gov.auExternal Link; and
    • periodic training for business line staff involved with consultation groups and induction training for new committee chairs.

    In the draft report, Russell noted that the NTLG is the largest Stewardship Group. This group was deliberately left untouched in June 2013 when we rationalised the consultation arrangements. It is now a different meeting with a more strategic focus, different expectations on members and different outcomes to NTLGs going back two years ago.

    Following earlier discussions on this and feedback received at the Consultation Steering Group, it was now time to move sensibly to ensure this group was tighter, leaner and more strategic for 2015-16 onwards. To move in this direction, very productive one-on-one discussions had been held in the lead up to the meeting. In doing this, we were following best practice undertaken by committees of the professional associations, where membership is regularly reviewed and that of other regulatory agencies, including the ACCC and ASIC, who actively review the membership of most of their consultative groups on either an annual or two-yearly cycle.

    The Chair further noted that the NTLG is one of two peak bodies that assist us all in having a well-designed and administered tax and superannuation system and it is also only one of eight stewardship groups requiring different inputs from different sectors on different issues.

    Other key consultation groups, such as the ATO’s Tax Practitioner Advisory Group (ATPAG), have the utmost ATO priority and will continue to play a key role, where tax practitioners can contribute to the efficient and effective operation of the tax and superannuation system. It is the ATO’s intention to have the Commissioner and/or one of the Second Commissioners attending ATPAG.

    The Chair noted that ATO will also be reducing its permanent attendees at the NTLG. He thanked everyone for the useful conversations that had been held in the lead up to the meeting and noted, for those that would be leaving the NTLG after this meeting but will remain in ATPAG that the ATO looks forward to their ongoing engagement and active participation. He noted that follow up communications will be issued confirming arrangements regarding future membership of the NTLG.

    Action item: NTLG 1506/4
    Due date: Out of session
    Responsibility: Assistant Commissioner, ATO Corporate

    Confirming arrangements regarding future membership of the NTLG
    Follow up communications will be issued confirming arrangements regarding future membership of the NTLG.

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    Responding to a comment from members, the Chair noted that the NTLG does not include representatives from all market segments but that in aggregate all stewardship committees ensure a fairly comprehensive coverage of stakeholders. He also noted that non-permanent attendees of the NTLG can be invited to attend discussions of particular topics as needed.

    Meeting close

    End of example

    Any other business

    The Chair noted that Assistant Commissioner Peter Coakley was retiring from the ATO on 30 June after 32 years with the ATO in various roles, many of which have had a strong focus on consultation and community engagement.

    Members joined the Chair in thanking Peter for his work with the ATO, the NTLG and the consultation network and wished him a happy and healthy retirement.

    Closing remarks

    There being no further business, the Chair closed the meeting at 3:40pm.

    The next NTLG meeting is scheduled for Thursday, 10 September 2015 in Melbourne.

    Disclaimer

    End of example

    NTLG agendas, minutes and related papers are not binding on the Australian Taxation Office (ATO) or any of the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change. These minutes have been formally endorsed by the members.

      Last modified: 24 Jul 2015QC 46514