e-invoicing
The ATO provided an update on the latest developments in e-invoicing and the Digital Service Providers Australia New Zealand (DSPANZ) member provided a practical demonstration of the system.
Members discussed the following focus questions:
- What are the challenges/barriers in communicating to businesses, and increasing awareness and adoption?
- How can the Government support you to raise e-invoicing awareness and drive adoption among the groups that you represent?
The Government is driving e-invoicing to deliver efficiency and productivity benefits to Australian businesses and the economy by:
- reducing costs and inefficiencies with manual invoice processing
- reducing payment times
- supporting and encouraging all businesses (especially small and medium enterprises) to grow digital capability.
The ATO does not and cannot get a copy of an invoice in the process. The ATO’s role is limited to managing e-invoicing’s framework and governance – tax compliance is not the driver of this initiative.
In the Federal Budget, the government announced further investment to increase business awareness and adoption of e-invoicing as part of its digital economy strategy, reflecting its ongoing commitment to e-invoicing including a communications campaign.
The Australian Peppol Authority (ATO) and Treasury will deliver activities, including:
- pilots to gain further insights into the use of e-invoicing
- continuing to work with states and territories to increase adoption
- educational activities to raise awareness
- further consultation on potential regulatory and non-regulatory ways to adopt e-invoicing.
Members noted concerns and suspicion and misconceptions in the community about the ATO’s role in e-invoicing, particularly having regard to how it is used overseas, and flagged the need to provide the community with comfort that it is not being used for tax compliance purposes. The DSPANZ member explained that the design of the system meant that it was not possible for the ATO to access this information. Members suggested that digital service providers and trusted advisors may be best placed to address community misconceptions and help drive the case for adoption focused on ease, efficiency, better records and faster payment.
Members noted that demonstrations, including YouTube videos, is one of the better ways of educating people.
Members supported sharing information to encourage clients to support e-invoicing adoption.
Self-service channels update – including modernisation and optimisation
The ATO provided an update on the Optimise interactions through our self-service channels strategic initiative. The initiative is designed to create better experiences, making self-service channels the preferred option for the majority of clients and their agents. The ATO is seeking improvements to its self-service offerings.
As part of this initiative, the ATO is making three directional shifts and establishing a whole of enterprise service strategy:
- Content guides traffic and builds confidence to self-serve – To achieve this, the ATO will be making improvements to ensure content is easy to find, understand, and use, reducing the need to call for clarification.
- Fill in the gaps in the ATO’s digital self-service ecosystem
- Addressing gaps and pain points
- Enabling clients and agents to stay digital
- Effectively promoting the services that are available.
- Drive transition and adoption of self-service by uplifting education for both staff and clients.
Members provided input and advice on how the ATO can effectively interact with specific demographic groups, seek further feedback and communicate with the wider community.
Members watched a demonstration of Online services for business, a key piece in modernising self-service channels for clients which went live in April 2021. This platform provides better access on devices and aligns with other online services such as Online services for agents and replaces the Business Portal.
Online services for business will provide GST registrants that do not use tax agents with a secure and modern channel to manage their tax and super obligations.
Co-design has been a major factor of success so far; working with stakeholders to make improvements in the Beta phase and using feedback from consultation with clients.
The ATO intends to retire the Business Portal from the end of July 2021 and is working on communications to businesses that have not yet transitioned to Online services for business.
Online services for business delivers new functionality to allow approved SMSF auditors to complete auditor contravention reports and audit complete advices. At this stage, full access to the legacy electronic superannuation audit tool will remain available for these users. A decision on when to remove this access is pending.
The ATO encourages the use of Online services for business and seeks feedback. A video demonstration and further information is available on ato.gov.au (links have been provided to members). Members noted that live demonstrations are a great way to promote the products and increase adoption.
More generally, members suggested focus sessions with micro businesses that attend the university tax clinics, to get feedback and ideas about our interactions and to get messaging out.
Members observed that for certain interactions, the ATO still asks clients to use paper and noted this was inconsistent with the ATO’s digital directions. For example, a member shared experiences with an FBT matter that required mailing information to the ATO.
Members shared improvements that have been noticed since the Beta phase of Online services for business.
The ATO confirmed the Reach Out indigenous support program is in use to continue engagement and education with the Indigenous community.
Members noted agent fears that facilitating self-service may impact agents’ businesses and this may be a reason for clients not onboarding. Members agreed to support and help encourage the take-up of clients as they see this as a great initiative.
Members noted the importance of retail offerings like Online services for business as digital service providers (DSPs) are not in a position to offer the full suite of ATO online services available via APIs due to cost and capacity constraints.
International developments in GST administration
The ATO provided updates on international developments in GST/VAT and explored opportunities to improve the administration of GST.
In light of the OECD’s monitoring of tax administration’s COVID-19 responses, it appears Australia compares favourably (and largely ‘in-step’) with other jurisdictions through the adoption of practical approaches such as allowing temporary deferrals of payment and easing of audit actions.
The OECD also reported that some other jurisdictions have also taken policy decisions to temporarily reduce specific sectoral VAT/GST rates.
In seeking other opportunities to improve the future administration of VAT/GST, many jurisdictions are also making plans to leverage technology to further simplify administration for taxpayers and improve compliance.
The adoption of VAT/GST to international consumer business supplies now operates in 65 jurisdictions with an additional 40 to follow. Most jurisdictions are also turning to digital platform collection through their implementation of these reforms.
Approximately 32 countries will have implemented reforms like Australia that require supplier collection of VAT/GST on low value goods, including the 27 member states of the European Union from 1 July 2021 and Singapore from 1 January 2023.
Domestically, jurisdictions are also focused on reforms that digitise and simplify VAT/GST administration and compliance.
The UK 2021 Budget details plans to implement the 10-year tax administration strategy (2020), including extending the Making Tax Digital initiative designed to make administration more effective, efficient and easier for taxpayers. This means that all VAT-registered businesses will be required to keep digital records and use software to submit their VAT returns from April 2022. Currently, over 30% of smaller VAT-registered businesses not yet required to use Making Tax Digital have chosen to do so voluntarily.
Other developments include updates on the targeted use of reverse charge in the UK, the use of split-payment approaches in Italy and Poland, and Canadian implementation of platform collection for short-term accommodation rentals in the sharing economy when properties are owned by non-residents.
Community and industry insights
A Corporate Tax Association report was shared with members covering the results of three surveys undertaken by the association. This included results and outcomes on the cost of compliance, relationships with different areas in the ATO and justified trust reviews.
The low value imported goods regime (LVIG) was raised by members, particularly the ATO’s administrative approach to bringing non-resident entities into the low value imported goods regime. Advice was sought on how to continue to bring non-resident entities into the regime and on issues surrounding retrospective liabilities. Members encouraged the ATO to consider future communications to foster willing compliance and this could be considered as part of the slated LVIG review.
Interaction of Family Law orders with GST concessions, like the margin scheme, was raised. The ATO confirmed that teams have commenced looking into the issue raised, however administrative solutions may not be viable in all cases. Further work needs to be completed and an update will be provided to the group out of session.
Agency updates
Agency representatives provided written updates which were included in the meeting papers provided to members.
In addition to a written update, the following information was provided.
Treasury
Treasury confirmed the measures passed in the Federal Budget that have commenced consultation:
- Reinsurance for cyclone or flood damage will close on 18 June
- Australian Screen Production Incentive Reforms closed 31 May.
The review into the low value imported goods measure is on the watch list for the second half of the year.
ATO
The ATO confirmed that there will be consultation on the retirement of the Residential Colleges Tool to consider what other options can be utilised, and to gauge the potential impacts of the removal of the tool.
The ATO shared feedback so far from consultation about the drivers of the GST ‘bottom up’ gap project:
- people not knowing what they are doing when they are new to business or starting up
- sub-optimal use of software and systems and incorrect ‘programming’ resulting in repeated mistakes each BAS cycle
- concessions resulting in complexity.
Membership refresh and 2021 program of work
The ATO is developing a program of work for the group in 2021, focused on driving improvements to the ATO’s GST administration. This is in line with the intent of the GST Performance Agreement and includes a focus on digital transformation. In addition to the two formal meetings each year, the program will include shorter, single purpose meetings. The ATO is seeking member suggestions for topics and feedback on the value of the meetings and consultations.
As mentioned at previous meetings, the ATO commenced a membership refresh in 2021. As part of this process two new members have joined the group since the last meeting – Amanda Gascoigne, representing small business, and Jennee Chan, indirect tax lawyer specialising in GST. We will be formally approaching members and organisations as part of the refresh asking them if they wish to renominate and, for organisations, whom. Existing members will also have an option to continue on in another capacity as general or special purpose technical advisers.
Attendees
Organisation |
Member |
|---|---|
ATO |
Deborah Jenkins (Co-chair), Small Business |
ATO |
Ben Kelly, Tax Counsel Network |
ATO |
Emma Tobias, Small Business |
ATO |
Sue Goodear, Small Business |
ATO |
Sylvia Gallagher, Individuals and Intermediaries |
Australian Banking Association |
Chris Plakias |
Chartered Accountants Australia and New Zealand |
Kevin O’Rourke |
Corporate Tax Association |
Paul Suppree |
CPA Australia |
Ken Fehily |
Digital Service Providers Australia New Zealand |
Matthew Prouse |
Independent member |
Jennee Chan |
Law Council of Australia |
Andrew Sommer |
Property Council of Australia |
Andrew Howe (Co-chair) |
Small business representative |
Amanda Gascoigne |
States and territories representative |
Giles Wilmer |
The Tax Institute |
Bastian Gasser |
Treasury |
Geoff Francis |
University of New South Wales |
Michael Walpole |
Apology
Organisation |
Member |
|---|---|
ATO |
Andrea Wood, Small Business |
Coles Finance |
George Nikolaou |