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  • GST Stewardship Group minutes 14 November 2018

    Welcome

    Presented by Tim Dyce

    Tim welcomed Jeremy Hirschhorn, newly appointed Acting Second Commissioner to the Client Engagement Group to the meeting. Jeremy led a discussion on the broad strategic trends for GST systems

    The future of Public Advice and Guidance

    Presented by Andrew Orme

    Andrew discussed the direction of public advice. He set the scene by stating that providing good public advice is critical for fostering willing participation in the tax system.

    We need to ensure we give taxpayers and advisors the right tools to self-assess and ensure we provide advice at the right time.

    Issuing Law companion rulings is a shift towards addressing emerging issues and providing advice on new laws. They are generally not used when responding to issues that have been around for some time.

    When assessing if there is a need for new advice, we analyse the data from requests for private rulings, looking for trends on GST to identify any potential gaps in our advice products.

    We are moving towards a more evidence based approach when issuing rulings.

    Some questions included how the ATO measures which rulings are used? This is based on hits to the ATO webpages.

    A discussion held on the use of practical compliance guides. Non-binding advice is concerning for some.

    Treasury Update

    Presented by Susan Bultitude

    Treasury provided an update on the following matters:

    • Removing GST from feminine hygiene products.
      • From 1 January 2019, feminine hygiene products are exempt from GST.
    • ‘Levelling the playing field’ for online hotel bookings.
      • The Bill has been introduced into Parliament.
    • MYEFO report due in December.
      • This will include updates to the GST voluntary compliance program. The current program is due to finish 30 June 2019.
    • The digital economy and Australia’s corporate tax system.
      • Treasury have released a discussion paper for consultation. The discussion paper explores options to move towards a fairer and more sustainable tax system for the digitalised economy.
      • Consultation closes 30 November 2018.
      • A discussion was held on where a digital services tax would sit within the ATO.
    • OECD Working Party 9 – Consumption Tax
      • Update on sharing economy platforms and the role of them in collecting GST. Presentations were given from NZ, UK, Canada and insights into what they are focussing on. There are a wide range of approaches.
      • The implication on tax for the sharing economy and how the thresholds for GST registration are different across jurisdictions.
    • Low value imported goods
      • Australia has led the way in introducing GST on consumer purchases of low value goods from overseas using a world-first approach that is being closely watched by our overseas counterparts.
    • Potential implications from the decision in the United States matter of South Dakota v Wayfair Inc. and the long standing restrictions on collection taxes across borders.

    Update on new measures

    Presented by Ian Ayrton

    Ian Ayrton provided an update on the recently implemented GST on low value imported goods and GST at Settlement measures.

    GST on low value imported goods:

    • As of 1 July 2018, Australian goods and services tax (GST) now applies to most sales of low value goods from overseas businesses to consumers into Australia.
    • All major international suppliers have registered.
    • Most overseas entities are quarterly remitters and are now lodging returns and paying GST.
    • We are taking action to enforce the measure and have been following up with businesses that are not complying with their obligations.
    • We are monitoring how overseas registered suppliers have implemented this change and the impact on Australian GST-registered business. We will act to support both groups as appropriate.
    • Revenue estimates of $70 million are on track to be achieved.

    GST at Settlement:

    • As of 1 July 2018, GST withholding at time of settlement now applies to most new residential premises and sales of potential residential land.
    • As at 30 October 2018:
    • The ATO had been notified of approximately 8,100 property transactions to which a withholding obligation would apply on settlement, and
    • Had received approximately 7,100 payments in respect of transactions that had settled.
    • The volume of property transactions impacted by this measure continues to grow.
    • We have had a few issues with allocating credits. We are working through resolving these and our IT areas have deployed IT fixes to correct some of these. We have also issued further business bulletins and worked with industry to explain the importance of including up to date correct information throughout the process
    • The ‘GST property credits’ withholding account is now viewable via ATO online services for individuals and sole traders and the Business Portal. The account will be viewable via online services for agents by quarter 1 2019.
    • There were some concerns from Industry around the measure including disclosing corporate structures. Some issues relate to policy issues that are dealt with by Treasury. Administratively, to enable credits to be allocated corrected, suppliers are required to disclose certain particulars in the vendor notification.

    FSI Credit Card Guidance

    Presented by Amy James-Velagic

    Amy James-Velagic provided an update on the progress of the FSI credit card guidance.

    The ATO is working towards issuing a draft GST Determination (GSTD) by the end of 2018, outlining the ATO view on how acquisitions relate to supplies in a credit card issuing business. Please Note – The GSTD was issued on 19 December 2018 as GSTD 2018/D1 and comments close on 15 March 2019.

    We are also progressing the development of a Legislative Instrument (LI), which will provide an apportionment method that must be used for acquisitions in a credit card issuing business. The reason for the combined approach is to ensure we are providing consistency, greater certainty and a level playing field across the industry.

    The ATO has consulted with industry and the consultation on these issues will be on-going whilst we develop these products.

    There were some concerns from industry about the application of a mandatory formula which were noted by the ATO.

    Build to rent

    Presented by Andrew Ditchfield

    The ATO has established a multi discipline focus team to look into the risks associated with the build to rent issues. This team is examining the internal and external issues; Risk models are also being developed.

    There has been an increase of media reporting on this issue.

    Some of the concerns from members included

    • properties constructed for a dual purpose and
    • the different structures that are used for these developments.

    A further update on the findings from the newly established focus teams will be presented at the next meeting.

    Effective use of data

    Presented by Tyson Fawcett

    ATO’s Data management Director, Tyson Fawcett delivered a presentation on the high level future state of data and analytics in the ATO including

    • Demonstrated the importance of high quality data
    • Spoke of the importance of the right data;
    • Spoke of data being, discoverable, accessible and useable;
    • Spoke of high quality data flows to analytics, for  modelling, risk management and compliance
    • Spoke of technology and its ability to replace future functions including speaking on Artificial Intelligence.

    Objections

    Bruce McLaren led a discussion on objections and how we manage the end to end process.

    Feedback included that it appears that there are some instances where some cases are not being allocated as per the intended process. A further discussion on objections will be included at the next meeting including how we manage those cases that are not within service standard.

    Other business, Summary and Close

    The meeting concluded at 1.45pm.

    The next meeting will be held in March in Melbourne to coincide with the OECD Global Forum.

    Attendees

    Organisation

    Members

    Deputy Commissioner, Indirect Tax, ATO (co-chair)

    Tim Dyce

    Senior Tax Counsel

    Gordon Brysland

    Assistant Commissioner, Indirect Tax, ATO

    Kelly Canavan

    Queensland Treasury

    Giles Wilmer

    Indirect Tax and Not for Profit Unit, The Treasury

    Susan Bultitude

    Australian Bankers’ Association

    Chris Plakias

    CPA Australia

    Ken Fehily

    The Tax Institute

    Bastian Gasser

    Law Council of Australia

    Andrew Sommer

    Property Council of Australia

    Andrew Howe

    Corporate Tax Association

    Paul Suppree

    Chartered Accountants Australia and New Zealand (co-chair)

    Kevin O’Rourke

    Deputy Commissioner, Public Groups And International, ATO

    Jeremy Hirschhorn

    Second Commissioner, Law, Design and Practice, ATO

    Andrew Mills

    Deputy Chief Tax Counsel, Public Advice & Guidance, ATO

    Andrew Orme

    Acting Deputy Chief Tax Counsel, ATO

    Hoa Wood

    Assistant Commissioner, Indirect Tax, ATO 

    Amy James-Velagic

    National Director, Review & Dispute Resolution, ATO

    Bruce McLaren

    Director, Smarter Data Program, ATO

    Tyson Fawcett

    Director, Indirect Tax, ATO

    Andrew Ditchfield

    Director, Indirect Tax, ATO

    Ian Ayrton

    Apologies

    Organisation

    Members

    Coles Finance

    George Nikolaou

    School of Tax & Business Law (ATAX) University of NSW

    Professor Michael Walpole

    Director, Indirect Tax, ATO

    Gabrielle Jackson

      Last modified: 07 Mar 2019QC 58167