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  • GST Stewardship Group minutes 22 August 2018

    Welcome

    Presented by Jeremy Geale

    Jeremy Geale opened the meeting. He welcomed Denis McCarthy who was representing Chartered Accountants Australia and New Zealand on behalf of Kevin O’Rourke.

    Jeremy reminded members that the purpose of the GST Stewardship Group was to work together to improve the sustainability and effectiveness of the GST system. The Stewardship Group was not intended to be purely a technical forum and the agenda items will reflect this.

    There were no outstanding items from the 25 May 2018 meeting.

    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. He also informed members that Australia will host the next OECD Global Forum on VAT.

    GST on low value imported goods:

    • Is going well. All major international suppliers including platforms have registered through the simplified or the normal GST process with a number of smaller businesses continuing to register. The changes also apply to Australian retailers that drop-ship through third party contracts from overseas.
    • The ATO will enforce the measure and will undertake compliance activities, and has been following up with businesses that have not yet registered.
    • The ATO is monitoring how overseas registered suppliers have implemented this change and the impact on Australian GST-registered businesses, and will support them as appropriate.
    • The first meaningful revenue results regarding this measure should be known around November 2018.

    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. The change is designed to address “phoenixing” activity in the property sector and improve the integrity of the GST base.
    • Purchasers are now withholding and paying amounts representing GST directly to the ATO instead of to the supplier. Transitional rules now apply. Contracts entered into before 1 July 2018 are excluded from this measure providing certain conditions are met.
    • The ATO is continuing to work with industry in the early stages of implementation. In addition, the ATO is undertaking a review of the administrative process with key industry stakeholders and feedback will form the basis for a future roadmap

    Action item

    A

    Due date

    ASAP

    Responsibility

    Secretariat

    The ATO will contact Bastian Gasser from The Tax Institute in relation to completing the forms for GST at Settlement and complications with the label for the supplier where transactions are grouped

    GST emerging risks and strategy 2018-19

    Presented by Andrew Ditchfield

    Andrew Ditchfield provided an overview of the overarching GST risk strategy for 2018-19 and facilitated a discussion around emerging GST risks. He said that the Indirect Tax business line is planning to enhance its intelligence networks and processes in 2018-19, and this will include improving data capture and understanding to help identify threats to the GST system.

    Questions were asked by the members about what risks are known from the tax gap and what risks are causing the gap.

    Jeremy Geale said that the risks are different depending on the various populations (e.g. small business, public multi-national business). Jeremy suggested a Smarter Data representative could attend the next meeting to deliver an abbreviated version of the presentation provided to the States and Territories on the effective use of data.

    Build to rent

    Presented by Andrew Ditchfield

    Bastian Gasser wanted to find out more about what the ATO is doing to address risks associated with “build to rent”.

    Action item

    B

    Due date

    TBA

    Responsibility

    Andrew Ditchfield

    Communication is required in relation to build to rent, to address the perceived gap in education. The ATO will undertake further research and analysis to better understand the issues and potential risks

    Treasury update

    Presented by Susan Bultitude

    Treasury advised that the Low Value Imported Goods scheme is being implemented well.

    There will also be public consultation soon on the draft legislation for the recently announced measure relating to offshore travel companies.

    The Government are also seeking to exempt GST on feminine hygiene products.

    Andrew Howe expressed concern that the legislation for GST at Settlement was rushed and this could cause some problems in the future. Treasury recognised there was a balance to be struck but they will take this feedback into account for the future.

    Draft addendum to GSTR 2006/6

    Presented by Adam Johnson

    Adam Johnson sought additional feedback from members on the draft addendum to GSTR 2006/6 – GST: improvements on the land for the purposes of Subdivision 38-N and Division 75.

    The Tax Institute felt key stakeholders have not been sufficiently kept in the loop and Adam will be following this up directly.

    Practical Compliance Guides

    Presented by Chris Plakias

    Chris Plakias led a discussion about Practical Compliance Guides (PCGs) with a key question focusing on “Where are we headed with public and private guidance?”. The general feeling from members was that the ATO is issuing less binding products.

    It was made clear by the ATO that the number of private rulings being issued had remained steady.

    The Deputy Chief Tax Counsel for Public Advice and Guidance will be invited to the next meeting to discuss public guidance, specifically the thinking around the future of Public Advice and Guidance.

    Self objections

    Presented by Jeremy Geale

    Jeremy Geale led a discussion and sought feedback about the use of self objections and GST refunds.

    Most of the members thought it was important that entitlement rights could be exercised but noted the administrative costs. Jeremy noted that the ATO will soon be issuing guidance on division 93 of the GST Act and division 47 of the Fuel Tax Credit Act.

    Other business, summary and close

    An agenda item for the next meeting was nominated by CPA Australia relating to service standards. All agreed that it is important to measure the service standards for private ruling requests, audit cycle times and objection finalisation times. The ATO will discuss this item further in the November meeting.

    The meeting concluded at 1.30pm.

    The next meeting will be held on 14 November 2018 in Sydney

    Meeting details

    Venue: Australian Taxation Office, Melbourne Docklands, Canavan Conference Room, 747 Collins Street Melbourne

    Date: 22 August 2018

    Start: 9.30am

    Finish: 1.30pm

    Chair: Jeremy Geale

    Secretariat: Rod Walker

    Contact: (02) 6216 6513

    Attendees

    Members

    Jeremy Geale, Deputy Chief Tax Counsel, ATO (Chair)

    Gordon Brysland, Senior Tax Counsel, ATO

    Giles Wilmer, Queensland Treasury

    Susan Bultitude, Indirect Tax and Not for Profit Unit, Treasury

    Chris Plakias, Australian Bankers’ Association

    Ken Fehily, CPA Australia

    Bastian Gasser, The Tax Institute

    Andrew Sommer, Law Council of Australia

    Andrew Howe, Property Council of Australia

    Paul Suppree, Corporate Tax Association

    Prof. Michael Walpole, School of Tax & Business Law (ATAX) University of NSW

    Guest Attendees:

    Denis McCarthy, Chartered Accountants, Australia and New Zealand

    Raj Srikhanta, Assistant Commissioner, Indirect Tax, ATO

    Adam Johnson, Acting Assistant Commissioner, Indirect Tax, ATO

    Ian Ayrton, Director, Indirect Tax, ATO

    Andrew Ditchfield, Director, Indirect Tax, ATO

    Apologies

    Kevin O’Rourke, Chartered Accountants Australia and New Zealand (co-chair)

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

    George Nikolaou, Coles Finance

    Kelly Canavan, Assistant Commissioner, Indirect Tax, ATO

      Last modified: 08 Nov 2018QC 57318