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  • Not-for-profit Stewardship Group minutes 15 March 2018

    Welcome and introduction

    The Community co-chair opened the meeting with an acknowledgment of the traditional owners and custodians of the land.

    Membership changes

    Membership changes were noted as follows:

    • Alison Zeitlhofer is now the ATO’s Director NFP Client Experience and Partner Relationships, in place of Rod Walker who has taken up another position in the ATO.
    • David Thompson has resigned as CEO of Jobs Australia and has also ceased membership of this group.
    • The Tax Institute advised of a change in their representation, Michelle Hartman is being replaced by Simon Bowden.

    Rod Walker was thanked for his tremendous contribution to this group and the Community co-chair presented him with a certificate of recognition. The group congratulated Rod on his hard work towards developing this group.

    The ATO noted that the two yearly membership refresh process will commence following the July 2018 meeting of this group with a view to being finalised in time for new members to attend the November 2018 meeting which will be a face to face meeting. The Community co-chair role will also be part of this process with the current Community co-chair having confirmed that he will not be renominating for the co-chair role but will remain a member.

    Confirmation of 8 November 2017 meeting notes

    The record of the NFP Stewardship Group 8 November 2017 meeting was confirmed and is now published.

    ATO 2024 vision

    2024 vision for client experience and what this means for the NFP sector

    The ATO co-chair provided an overview of the planning process that the ATO is undertaking to set priorities in terms of the client experience, including the NFP client experience. This work follows on from the Reinventing the ATO program blueprint and the ATO is putting together aspirational vision statements for the future client experience, working towards 2024. In summary, the ATO:

    • Recognises the need to keep working towards a whole of government experience for NFPs however, some deliverables are dependent on law and technology changes and will not be delivered in the near future.
    • Recognises the benefits that may be gained from streamlining laws that apply to NFP and will continue to consult on and help advocate for change.
    • Will focus on helping NFPs get things right from the start.
    • Is working towards transitioning from paper forms to digital, online experience.
    • Is looking to invest more in communication, marketing and engagement with NFPs.
    • Will focus on improving the process for refunding franking credits.
    • Will continue to ensure those NFPs doing the wrong thing are stopped.
    • Is exploring ways of helping prefill donations information into income tax returns for individual taxpayers, without cost to NFPs.
    • Will focus on helping promote philanthropy and making it easier for donors to give and to claim deductions where they are eligible.

    Discussion

    Members were asked for their thoughts. In summary:

    • There is a measure of negativity around whether any significant changes can be delivered, given past experience.
    • It is still complex trying to work through all the different concessions, even for experienced intermediaries.
    • The Not-for-profit sector tax concession working groupExternal Link was considered a valuable group and the question was asked whether the recommendations of the working group could be reviewed.
    • The ATO should consider if there are any non-controversial changes that can be made to the laws that impact NFPs and charities that can be implemented as part of other measures.
    • Technology probably has the most potential to deliver efficiencies; the ATO and government need to show willingness to use technology to clean up the system.
    • ATO and government need to show willingness to amend rules to allow NFPs to flourish.
    • Joining up government would help, including ACNC and ASIC working together.

    ACNC update

    The ACNC member provided an update, key messages were:

    50-50 Special conditions workshop

    The group discussed progress of advocacy for change to the special conditions in Division 50-50. In summary:

    • The ATO clarified its understanding of the current state and confirmed that it would include consideration of this issue in an informal submission to the ACNC ReviewExternal Link.
    • The group discussed the desired changes to confirm a clear, agreed position.
    • Treasury provided a summary of steps they have taken in relation to this issue.
    • The external members decided to prepare a joint submission to the ACNC Review on this issue.

    Law update

    Treasury provided an update on a number of issues including:

    The ATO provided an update on a number of issues including:

    Risk and assurance update

    GST

    The ATO GST Client Experience and Business Transformation Team representative addressed the meeting, in summary:

    • The ATO is continuing to implement initiatives to help NFPs understand and meet their GST obligations, including updated, tailored GST advice and GST webinarsExternal Link for NFPs.
    • The ATO is putting together some tailored advice to help NFPs access the Small Business Assistance program, a program available to small businesses that have recently registered for an Australian business number (ABN) and that are registered for GST or likely to register for GST in the near future.

    Discussion

    The group expressed concern that the title Small Business Assistance Program is confusing for NFPs because it is not immediately clear that they are able to access the program. The suggestion was made that the ATO explore tailoring the program for NFPs and perhaps market testing this.

    The group also offered to socialise any messages about the availability of the service through their networks.

    NFP risk and strategy

    The ATO’s NFP Risk Manager provided an update as follows:

    • Work is underway to determine compliance priorities for the 2018–19 financial year.
    • The Public Ancillary Funds Intermediaries engagement program pilot is complete. As part of this strategy the ATO visited a number of organisations that manage public ancillary funds to discuss their experience with the tax system and any issues they may have.
    • The ATO continues to work with the ACNC on compliance audits, including looking at issues around ‘private benefits’ and an instance of money laundering that was identified through AUSTRAC and ACNC data.
    • Work continues on understanding the demographics of NFPs that self-assess their income tax exemption.
    • The ATO will be looking at conduit arrangement, where donors are giving money with conditions attached and will be considering what educational material can be developed to ensure donors and DGRs understand the rules.

    Discussion

    Mutuality is also a regular issue of concern. Non-ATO members referenced the 2012 Not-for-profit Sector Tax Concession Working Group Discussion PaperExternal Link as containing a good description of the issue of mutuality, an issue that is regularly reported in the media.

    GST benchmark values update

    ATO Director GST Technical Product Leadership addressed the meeting to provide an update on the ATO’s review of GST benchmark market values. In summary:

    • An updated discussion paper was provided to members before the meeting, including updated findings and recommendations taking into account feedback received at the November 2017 meeting.
    • Some members of the group indicated that the revised recommendations would still have a significant impact on NFPs.
    • The ATO agreed to consult further with non-ATO members who have particular concerns.

    Question 23 FBT return update

    Members were provided with an updated briefing paper ahead of the meeting and the ATO’s Assistant Commissioner Technical Excellence Services addressed the meeting to discuss. In summary:

    • As part of updating the briefing paper, the ATO consulted with the Revenue Analysis Branch of the ATO to better understand how information collected at question 23 of the FBT return is used.
    • Prior to this meeting, the ATO also discussed the updated briefing paper with the non-ATO member who had raised the issue to ensure all feedback had been understood and taken into consideration.
    • The ATO decision is that no change will be made to the FBT return to exclude exempt employers from the requirement to complete question 23. The main reasons for no change are:
      • that without corresponding change to requirements to substantiate claims made in the FBT return, it was anticipated that there would be little or no reduction in the compliance burden for exempt employers
      • removing the requirement to complete question 23 would result in a significant loss of data that the ATO and Treasury use for reporting, analysis and Budget transparency purposes.
       

    Non–ATO members noted that, although they understand the ATO’s position and the requirements of question 23, there are still inequities in the way that it applies to NFPs and would welcome a change in the future.

    The ATO will develop more tailored advice and educational material about question 23 of the FBT return to ensure that NFPs understand what is required and why.

    Communication and marketing update

    The ATO provided an update on communication and marketing activities, in summary:

    • A direct mail out to NFPs will happen in April/May 2018 to promote the different ways that NFPs can get help with tax issues.
    • Two new videos have been published, tailored for NFPs about Starting an NFPExternal Link and Registration and endorsement of your NFPExternal Link, these videos and can be found on ATOtv.
    • Past webinar recordings are also available on ATOtvExternal Link.
    • Welcome letters are also now issuing for newly registered NFPs, providing information about where to get help and how to find information.
    • The ATO is tracking and monitoring web activity on NFP products and information to measure effectiveness and inform future changes and continual improvement.

    Discussion

    • Non-ATO members noted that communication and marketing activities undertaken by the ATO and directed to NFPs should not be done in isolation from the sector.
    • Members are interested in a presentation about the outcomes of the ATO’s evaluation process, including the statistics on usage.
    • Can the ATO reference educational products provided by other organisations that may be of assistance to NFPs?

    Other business

    Members were reminded that they can raise issues or submit questions to the ATO anytime via the NFP Stewardship Group inbox NFPStewardshipGroup@ato.gov.au

    Attendees

    ACNC

    Murray Baird, Assistant Commissioner and General Counsel

    Arts Law Centre

    Robyn Ayres, Executive Director

    Australian Institute of Company Directors (AICD)

    Phil Butler, NFP Sector Leader

    Catholic Social Services Australia (Co-Chair)

    Joe Zabar, Director Strategic Policy and Engagement

    Giuntabell

    Nunzio Giunta CPA, Managing Director

    Herbert Smith Freehills

    John Emerson, Consultant

    Justice Connect

    Sue Woodward, Not-for-profit Law

    Law Council of Australia

    Jennifer Batrouney QC, Chair of the Law Council’s NFP Legal Practice and Charities Committee

    Philanthropy Australia

    Krystian Seibert, Manager Policy and Research

    Prolegis Lawyers

    Anne Robinson

    Salvation Army

    John McIntosh, Charities Tax Advisory Service

    Treasury

    Murray Crowe and team

    ATO, Assistant Commissioner NFP experience lead

    Kate Roff

    ATO, Outgoing Director NFP Client Experience and Partner Relationships

    Rod Walker

    ATO, Incoming Director NFP Client Experience and Partner Relationships

    Alison Zeitlhofer

    ATO, Director NFP Risk and Policy

    Albert Beric

    ATO, Manager NFP Policy and Law

    Mark Ferguson

    ATO, NFP/FBT Advice Team Leaders

    Melinda Gibbs, Azmery Awal

    ATO, Assistant Commissioner, Tax Counsel Network

    Simon Haines

    ATO, Assistant Commissioner Technical Excellence Services (FBT)

    Anna Longley

    ATO, Compliance Director, Engagement and Assurance Services

    Iris Sin

    ATO, Director, Indirect Tax (GST)

    Mark Weber

    ATO, Director, GST Technical Product Leadership

    Bronlynn Graham

    ATO, Director Marketing and Communications Government and Not-for-Profit audiences

    Suzie Holmes (for Rebecca Webb-Johnson)

    ATO, Secretariat

    Gess Sottile, ATO NFP Strategy Team, NFP Reinvention

    Apologies

    Tax Institute

    Michelle Hartman, Partner, Deloitte Touche Tohmatsu

    Jobs Australia Ltd

    David Thompson AM and member of the Board of the National Roundtable of Nonprofit Organisations

    ATO

    Tim Dyce, Deputy Commissioner and NFP Client Experience Owner

      Last modified: 09 Aug 2018QC 56444