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  • GST Advisory Group minutes 12 November 2015

    Meeting details

    Venue: ATO Offices, Level 12 Conference Room, 52 Goulburn Street, Sydney

    Date: 12 November 2015

    Start: 9.30am Finish: 1.00pm

    Chair: Kevin O'Rourke

    Secretariat: Alison Zeitlhofer, Indirect Tax, contact phone: (02) 6216 1013

    Members

    Tim Dyce

    Deputy Commissioner, Indirect Tax, ATO (Co-Chair)

    Paul Southwell

    Assistant Commissioner, Indirect Tax, ATO

    Jodie Wearne

    The Treasury

    John Corlis

    States and Territories Representative

    Giles Wilmer

    Director, Commonwealth Taxes Unit, Queensland Treasury

    Kevin O'Rourke

    Chartered Accountants Australia and New Zealand (Co-Chair)

    Chris Plakias

    Head of Tax, GST and Technology Westpac, Member Australian Bankers’ Association

    Ken Fehily

    Principal, Fehily Advisory, Member CPA Australia

    Paul Nielsen

    Chairman, Board of Directors, Council of Small Business of Australia

    Andrew Howe

    Director, Greenwoods and Freehills Pty Ltd, Member Property Council of Australia

    Bastian Gasser

    The Tax Institute

    George Nikolaou

    Coles Finance

    Guest attendees

    John Gleeson

    Tax Counsel Network, ATO

    Apologies

    Andrew Sommer

    Partner, Clayton Utz, Member Law Council of Australia

    Professor Michael Walpole

    Professor and Associate Head of School (Research) School of Taxation & Business Law UNSW

    Paul Suppree

    Assistant Director, Corporate Tax Association

    Gordon Brysland

    Assistant Commissioner, Senior Tax Counsel, ATO

    Agenda summary

    • Welcome
    • Division 93 impacts on taxpayer's entitlement to claim input tax credits
    • Transitional issues and rules in the event of a change to rate or base and how such changes might be implemented in practice
    • Out of session updates
    • Next steps summary and close

    Discussion summary

    Welcome - Kevin O'Rourke

    Kevin O’Rourke opened the meeting, sharing that he considered it a privilege for him to chair his first meeting as the recently appointed co-chair.

    Minutes of 12 November 2015 endorsed with no outstanding action items

    Apologies were noted.

    Bastian Gasser representing The Tax Institute was welcomed as a new member, and outgoing member Jeremy Geale was thanked for his contributions.

    Division 93 impacts on taxpayer's entitlement to claim input tax credits - John Gleeson

    At the 19 May 2015 GST Advisory Group meeting members were given an overview of issues identified at an ATO think tank session which focused on forecasting hotspots and potential risks in relation to the indirect tax self-assessment system. The introduction of the self-assessment system resulted in the abolition of ‘stop the clock’ notices under section 105-55 of Schedule 1 to the Taxation Administration Act 1953 for tax periods from 1 July 2012 (notices for earlier tax periods can still be lodged until 1 July 2016), and the introduction of periods of review to govern time limits for amending assessments. Some important issues arise from the interaction of the new periods of review with the time limits on the claiming of input tax credits on creditable acquisitions under Division 93. The ATO anticipate these issues will have practical application from July 2016, when periods of review start to expire.

    Members confirmed their support and interest to participate in a workshop in Melbourne which would focus on resolving possible interpretative issues around Division 93 and provide advice to the ATO on appropriate communication to taxpayers and tax professionals about these issues.

    George Nikolaou, Chris Plakias, Ken Fehily and Kevin O’Rourke indicated they would be available to participate. Additional nominations may come forward for a working group.

    Transitional issues and rules in the event of a change to rate or base and how such changes might be implemented in practice - Kevin O'Rourke

    This item was raised by external members following recent media attention around a rate or base change to the GST. Members explored the following issues:

    • Notion of a statutory gross up clause (which New Zealand has) and was part of the old sales tax regime to assist transition. A statutory gross up cause would enable automatic rate increases potentially reducing compliance costs.
    • Time of supply rules in relation to goods supplied. Flexibility around attribution for time of supply and allowing error correction in a later tax period would help to remove uncertainties from the system especially if there was no grandfathering period.
    • Communication will be vital; however managing a rate change might create an opportunity to improve the GST system and have taxpayers better understand the GST system.
    • Very few overseas regimes have margin schemes; consideration should be given to revisiting the GST provisions as they can be complex and problematic.
    • Consideration needs to be given to added complexities for small business taxpayers such as vending machines operators who may need to clear out existing stock. Special rules were applied when GST was introduced.
    • Businesses may need to run parallel systems to account for returned goods, commissions, volume rebates etc. Safe harbours could be considered.

    Out of session updates - Paul Southwell

    ATO review of private advice

    The ATO recently concluded a review of our public advice and guidance, and is now considering how we might change the way we provide private advice across all our client groups.

    Outcomes

    Through consultation, this review will provide an opportunity to:

    • Develop a future vision for the provision of private advice.
    • Design an advice framework that will guide our future culture, business processes, products and services.
    • Explore ideas and solutions that will improve the whole-of-client experience.

    Our goal is to design a private advice system that has its foundation on the needs and expectations of our clients. We want to make it as easy as possible for our clients to get things right by delivering a system that provides sufficient certainty through tailored, useful and timely advice with a contemporary service.

    It was suggested there should be a multi-pronged approach to reducing compliance costs including:

    • Reviewing what information is being gathered and asking do we really need it.
    • Understanding why we ask for the information
    • Explaining why the information is needed
    • Comparing what records are kept by large unregistered (not for profit?) entities to see how much of an extra burden GST imposes

    Public consultation on the discussion paper closed on 20 November 2015, GST Advisory members will be kept up to date progress of the review.

    Next Steps Summary and Close - Kevin O'Rourke

    It was proposed that following on from the success of the Rapid Design workshop held in Melbourne on 15 October that it would be beneficial to hold similar workshops going forwards on other relevant topics. It was proposed that a workshop on financial services be held possibly coinciding with the planned face to face meeting in Melbourne on 25 February. The meeting concluded at 13.30.

      Last modified: 16 Dec 2015QC 47585