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  • Large Business Stewardship Group key messages 31 May 2022

    Compliance risks and emerging issues

    The ATO provided an update on compliance risks and emerging issues.

    Reportable tax position schedule consultation

    There will be 2 consultation processes that will occur annually in May and November with the new reportable tax position instructions published in December.

    • May consultation will cover proposed questions on new public advice and guidance products to 31 March and any changes to the schedule and instructions.
    • November consultation will be on the final instructions and schedule.

    Increased demand for private rulings, class rulings and guidance

    The ATO informed members that we are seeing record numbers of requests this financial year and we are providing further resources and support to the advice and guidance teams.

    The ATO asked members to remind taxpayers that it is important to engage early with sufficient details of proposed transactions and to highlight potentially contentious issues upfront.

    Members shared their experiences with some delays with private ruling requests and noted the increased need for tax certainty given the activity in the market. The ATO agreed to share more communications, including tips to prepare.

    Base rate entities

    The ATO has identified that some corporate tax entities are claiming to be a base rate entity (BRE) and using a lower company tax rate when they are not entitled to. The ATO reminded Large Business Stewardship Group (LBSG) members that taxpayers must actively re-assess eligibility each income year.

    The risk is where incorrectly claiming the lower rate of company tax will influence the rate of tax paid in an income year and may also influence the maximum franking credit subsequently allocated to a frankable distribution. We encourage amendments or voluntary disclosures to correct mistakes if identified.

    Letters will issue over the next 3 months to taxpayers claiming BRE where their aggregated turnover exceeds the BRE threshold. Taxpayers who reported as both a significant global entity and a BRE on the same income tax return will be prioritised.

    Justified trust ratings for Top 100 taxpayers

    The ATO discussed with members how the ATO can give greater confidence through high assurance ratings. Scenarios were presented on what taxpayers can expect when they obtain high assurance in relation to a transaction or risk, and overall high assurance.

    Members reinforced the need for certainty. A smaller sub-group will work through how the ATO can provide certainty in high assurance ratings.

    Independent review – Stage 3

    The ATO has developed draft updates to ATO governance guidance to enable greater alignment of Board level control 4 testing plans with the broader enterprise testing programs of large corporates.

    Feedback from members was requested on the proposed changes to the income tax and GST governance control testing frequency for Top 100 and Top 1,000 income tax and GST assurance reviews.

    The ATO is looking to ensure the guidance is appropriate to characteristics of the organisation. Member feedback, context and experience was sought. A smaller sub-group will work through the draft updates to the governance guide to finalisation.

    Monitoring and maintenance

    Members provided feedback on the Monitoring and Maintenance Approach web guidance for Top 100 taxpayers that overall it is helpful, with members noting a need for further guidance on how the refreshed review is different from a monitoring and maintenance review. The ATO will consider developing further guidance when more refreshed reviews are conducted.

    Top 1,000 program changes to GST

    The ATO updated members on changes to the Top 1,000 combined assurance review (CAR) program and sought member feedback as the program evolves. Going forward, the CAR product will be expanded so that reviews will provide both income tax and GST assurance. Recent changes, resulting from past consultation, include new tax governance guidance, and changes to the report to better reflect client and ATO next actions.

    Members noted there could be more guidance to support using the GST analytical tool. A discussion on the wording around this was raised and the ATO reiterated the intention of the GST analytical tool.

    Next actions

    The ATO updated members on the next actions pipeline, resourcing, taxpayer spread and the issues more likely to require ATO engagement.

    Top issues progressing to audit include transfer pricing, related party financing and anti-avoidance (including multiple entry consolidated group restructure issues). We also shared factors which are more likely to expedite resolution:

    • Provision of additional evidence requested in the Top 1,000 CAR program
    • Moving to low-risk zones on areas covered by our practical compliance guides.

    Large market services

    Co-chair Michelle de Niese informed members of the Corporate Tax Association (CTA) consultation with its members on their justified trust (JT) experience and expectations in 2022 and beyond. The CTA provided detailed feedback to the ATO around:

    • the JT program and Public Groups and International resources via ‘lived’ high assurance ratings and effective monitor and maintenance experiences
    • a stronger focus on service delivery for those taxpayers that have actively engaged and complied with the ATO’s robust requirements under the JT program.

    Terminology inconsistency about key client managers (KCM), key account managers (KAM) and relationship managers (RM) was discussed and it was suggested that further clarity and guidance is required in this area. Members shared their experiences with their respective KCM, KAM or RMs and how they interacted with the ATO.

    Advance pricing arrangement program

    The ATO updated members on the advance pricing arrangement (APA) program review consultation – focus areas for the review and the framing questions have been developed based on feedback from stakeholders.

    A progress update on the APA program review was provided. As part of the review, the ATO will consider the nature of substantive issues that are best suited for the program, how to tailor the APA process to better align to risk and taxpayer behavioural indicators, and how the APA program complements other compliance programs in the ATO.

    Member feedback, especially from those who are currently not engaged in the formal consultation process, was requested.


    Treasury members provided an update on the new government, recent legislation and the OECD Pillars.

    With a new government, the Treasurer and his office are getting across the portfolio and Treasury briefing. The new government has a large agenda of commitments announced during the election and will also work through lapsed legislation and announced but unenacted measures. A budget update has been foreshadowed for October.

    For the OECD update, tax certainty is becoming an important issue and the current focus for Pillar 2 is resolving technical issues with an overall implementation delay likely.

    Board of Taxation

    The Board of Taxation updated members on the status of current reviews (review of capital gains tax roll-overs and review of the taxation of digital assets and transactions), noting that during caretaker period they were unable to undertake external consultations.

    Other business

    The ATO shared the following updates relevant to LBSG members:

    • The Legal professional privilege protocol is due to be published in June.
    • The Global Intangible Low-Taxed Income Taxation Determination (hybrid mismatch rules – foreign law interactions) could publish in July, subject to approvals.
    • The ATO is looking at refreshing Business bulletins and at ways we can provide industry updates.


    Attendees list




    Rebecca Saint (Co-chair), Public Groups and International


    Faith Harako, Public Groups and International


    Michael Ingersoll, Public Groups and International


    Rebecca Richards, Public Groups and International

    Big 4 Representative

    Cindy Perryman

    Board of Taxation

    Christina Sahyoun

    Business Council of Australia

    Pero Stojanovski

    Corporate Tax Association

    Michelle de Niese (Co-chair)

    Elders Limited

    Vanessa Trengove

    Law Council of Australia

    Adrian Varrasso


    Angela Giunta

    Property Council of Australia

    Kelly Wong


    Brian Purdy


    Maryanne Mrakovcic

    Guest attendees

    Guest attendees list




    Cecilia Zhao, Public Groups and International


    Greg Dick, Public Groups and International


    Hector Thompson, Public Groups and International


    Judy Morris, Public Groups and International


    Megan Croaker, Public Groups and International


    Melissa Gile, Public Groups and International


    Simon Hellmers, Public Groups and International


    Susan Bultitude


    Apologies list



    Adelaide Brighton Cement

    Mimi Ferguson

    Australian Banking Association

    Darren Norman

    Australian Petroleum Production and Exploration Association

    Michael Fenner

    Australian Retailers Association

    Abs Osseiran

    Australian Super

    Bevan Grace

    BHP Billiton

    Premila Roe


    Irene Filippone

    Group of 100

    Marc Lewis


    Megan Williams

    Tax Institute of Australia

    Pete Rhodes


    Marty Robinson

      Last modified: 11 Jul 2022QC 70044