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  • National Tax Liaison Group key messages 9 December 2016

    Insights from other tax jurisdictions

    Chartered Accountants Australia and New Zealand representative Michael Croker led a discussion on ‘Insights from other tax jurisdictions’, highlighting features, programs and potential lessons to be learned from tax administration in South Africa, New Zealand, Canada and the United States.

    Treasury reports

    Maryanne Mrakovcic, Deputy Secretary, Revenue Group and Rob Raether, Division Head, Corporate International Tax Division, Treasury

    Key points included:

    • Legislation on the Diverted Profits Tax is expected to be introduced early next year
    • Multi-lateral instrument to be finalised in mid-2017
    • Legislation recently passed by Parliament includes the Superannuation reforms package; Working Holiday Maker Reform Bill 2016 and the Budget Savings (Omnibus) Bill 2016
    • Submissions for the consultation on the Collective Investment Vehicle Non-resident Withholding Taxes (CIVs) closed on Friday 2 December 2016
    • Petroleum Resource Rent Tax (PRRT) – Treasurer announced a petroleum tax inquiry that will report back to Government by April 2017 with recommendations
    • Whistleblower legislation – discussion paper which will cover tax and corporations law elements to be released soon
    • Pre-budget submissions due 19 January 2017.

    Tax transparency

    Bruce Collins, A/g Deputy Commissioner, Public Groups, ATO

    The corporate tax transparency report and accompanying information for 1900 companies was released on 9 December 2016. It was noted there has been increased interest in the voluntary tax transparency code since the ATO has been releasing data. External members noted their appreciation for the supporting materials that the ATO produced to better inform the public debate on the release of the tax transparency data.

    Corporate / International issues

    James Beeston, Assistant Commissioner, Public Groups, ATO

    Tax system’s developments including CIVs, MITs, staples structures and negative control impacting foreign investment in infrastructure in Australia

    Key points:

    • Return forms for early elector Attribution Managed Investment Trusts are due in early 2017
    • Traditional property stapled structures – ATO and industry have a joint working party reviewing Division 6C issues. Some of the key issues they are looking at include what is land and what is ancillary to land
    • Finance staples – Treasury has released an Exposure Draft on new section 974-70 and 974-80 integration test.
    • The ATO proposes to release a draft of the Infrastructure and Privatisation Framework early in the new year that will have four distinct chapters covering:
      • PPP’s (Private Public Partnerships) by way of a securitised licence structure (this will be an update of the chapter we released in October 2015)
      • Privatisations
      • Miscellaneous issues (including the current negative control position, gifted assets, capitalised labour)
      • Compliance high risk areas (red flags).
       
    • Negative control – first draft consultation paper was released in August 2015 that outlined a series of veto rights that may or may not have given rise to control for Division 6C purposes. Following feedback, the consultation paper has been updated and is much clearer about which veto rights will or will not give rise to control, as well as inclusion of examples covering issues such as joint control.

    Taxation of superannuation changes

    James O’Halloran, Deputy Commissioner, Superannuation, ATO and Jessica Carew, A/g Principal Advisor, Superannuation Tax Reform, Retirement Income Policy Division, Treasury

    • The ATO and Treasury have undertaken post-budget consultations with industry professionals to discuss the superannuation reform.
    • The ATO is issuing a number of Law Companion Guidelines to help explain the changes.
    • To support the community, a number of initiatives are being undertaken such as updating the ATO website, webinars, tax agent engagements etc.
    • Treasury will be releasing a large number of Regulations in three tranches at the end of 2016 and in early 2017.

    Tax and indigeneity

    Adam Pase, Assistant Commissioner, Strategic Procurement and Contracts, ATO Finance; Karen Anstis, Assistant Commissioner, Small Business, ATO; Sally Bektas, A/g Assistant Commissioner, Marketing and Communications, ATO Corporate; and John McCarthy, Director, Entry Level Programs, ATO People

    A KPMG report on indigeneity and economic empowerment titled Igniting the Indigenous Economy was recently published.

    The ATO has a number of initiatives for indigenous recruitment, procurement and engagement with the indigenous community. These include:

    • Indigenous employment program which has an employment target of 2.5% by 2018 (currently 1.7%).
      • Evergreen entry-level program: this 18-month development program is designed to build the capabilities of participants through different work placements with participants achieving a Certificate III qualification.
      • Indigenous Cadetship Program: this is a two-to-three-year development program that combines university study with practical work placements.
       
    • Procurement – under the Indigenous Procurement Policy, the Government has set a target of 2% for goods and services from Indigenous business with a target of 3% of Commonwealth contracts awarded to Indigenous businesses by 2020. The ATO has achieved 2.8% with contracts varying from consultancy and research services to stationery, labour hire and recruitment to office fit outs and facilities management.
    • Communications – The ATO produces information about how the ATO supports indigenous businesses. It also provides support material to the Department of Human Services remote services which they deliver to indigenous remote areas.
    • Services – The ATO develops education products and delivers services tailored for different parts of the indigenous community including small businesses in rural and remote locations.

    Working Holiday Maker Reform Bill 2016

    Alison Lendon, Deputy Commissioner, Individuals and Melanie Casey, A/g Assistant Commissioner, Individuals, ATO

    Legislation was passed by Parliament on 24 November 2016. Information about the new legislation has been published on the ATO website. The ATO will contact businesses who employed working holiday makers last year about the new laws. Information will be available through social media, newsletters and to industry organisations to disseminate to their members and clients.

    Fact finding procedures

    Malcolm Allen, Assistant Commissioner, Risk Management and Strategy, Public Groups and International ATO

    Australian National Audit Office has reviewed the External Compliance Assurance Process (ECAP) pilot and endorsed the ATO’s findings. A number of key lessons were identified for future Australian Taxation Office pilots and more widely for pilots in all public sector entities.

    Tax Gap

    Kent Perdrisat, Assistant Commissioner, Performance Measures and Tax Gap, Tax Practitioner, Lodgment Strategy and Engagement Support, ATO

    The ATO has published six refreshed estimates in the 2015–2016 ATO Annual Report tabled in Parliament on 27 October 2016. The estimates are for the goods and services tax; luxuy car tax; petrol and diesel excise and duty; wine equalisation tax payable gap; pay-as-you-go withholding; and fuel tax credits.

    The ATO withdrew the previously published beer excise and duty gap due to data quality issues identified and is exploring other approaches to establish a more reliable estimate.

    The release of a number of estimates has been delayed as the ATO found that methodological improvements and further data were required to ensure that the gap estimates were as robust and accurate as possible. The view of external experts and tax gap consultants were considered in making this assessment. Some estimates require another year’s data to provide greater reliability.

      Last modified: 09 Feb 2017QC 51203