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  • Tax Practitioner Stewardship Group minutes 8 June 2018


    A number of key areas were discussed including Modernising Business RegistersExternal Link, Director Identification Number, reform to the Australian Business Number regulatory framework and planned improvements to the administration of the Australian Business Register.

    The topics discussed are outlined below, along with a number of questions tax practitioners are encouraged to consider. As part of the consultation process, feedback will continue to be sought through professional associations.

    Modernising Business Registers

    The government has provided funding to develop a detailed business case to modernise business registers which will be hosted at the Australian Business Register.

    An overview of the program and a set of frequently asked questions are available on the Treasury Consultation HubExternal Link. The program is a comprehensive multi-year transformation of the way business registry services are delivered and will involve law, technology, business process, organisation and user experience changes.

    There are five agencies participating in the program. They are the ATO, Australian Securities and Investments Commission, Department of Industry, Innovation and Science, Treasury and the Digital Transformation Agency.

    Director Identification Number

    In September 2017, the government announced a package of reforms to address illegal phoenix activity. One of the measures included introducing a Director Identification Number.

    Key components of the measure include:

    • a unique number for life as a company director
    • verifying the identity of each person who is a company director or office holder
    • ensuring each director or office holder consents to their role
    • providing traceability of director’s relationships across companies
    • providing a foundation that will allow regulators to map relationships between entities and individuals over time.

    Due to the linkage to the companies register, implementing a Director Identification Number may be aligned with modernising business registers scope and timeframes.

    Consultation on Modernising Business Registers and Director Identification Number initiatives will be undertaken in the second half of 2018.

    Focus questions

    1. What level of interaction do tax practitioners have with the Australian Business Register, Australian Companies, Australian Business names, Reserved Company Names, Registrable Australian Bodies and Foreign Companies?
    2. Would moving from submission in paper / digital image to a machine-readable form (using common standards) for company financial reports through MBR provide benefits? What are the main challenges for tax practitioners?
    3. How much Director Identification Number related data should be made publicly and privately available?
    4. From a tax practitioner perspective what are the advantages to having a Director Identification Number?
    5. Should authorised agents be able to apply for a Director Identification Number on behalf of their clients? If so, how would this work within a consent framework?
    6. How should Director Identification Numbers be issued to existing company directors?
    7. What are the key considerations in implementing Modernising Business Registers and Director Identification Number initiatives?

    Australian Business Number Reform

    The Black Economy Taskforce’s final reportExternal Link to the government made a number of recommendations relating to the Australian Business Number (ABN) system. In response, the government announced in the 2018 Federal Budget that it will consult on and develop a new ABN regulatory framework.

    The Treasury is expected to release a consultation paper soon, that will seek stakeholder views on selected Taskforce recommendations, in order to gain a more comprehensive understanding of the issues and consequences of changing the ABN regulatory framework.

    The consultation paper will include a list of questions to prompt stakeholder views. Tax practitioners are encouraged to participate in the consultation process and to provide feedback through professional associations.

    The Black Economy Taskforce final reportExternal Link made a number of recommendations that are outlined below along with the Government responseExternal Link. Please consider the recommendations that came out of the taskforce as they will be relevant to the Treasury consultation paper once it is released.

    Recommendation 4.2: ABN reforms

    Strengthen the integrity of the ABN system to provide confidence in the identity and legitimacy of Australian businesses. Suggested actions include:

    • requiring ABN applicants to quote their tax file number
    • removing ABN entitlement from apprentices, tourist visa-holders and workers in certain industries
    • requiring ABN holders to periodically renew their ABN, conditional on having met key tax obligations and not having been identified with a phoenix operation
    • consider the introduction of an ABN renewal fee.

    Government response

    The government agrees that the ABN system needs to be as robust as possible in order to ensure the integrity of the tax system. The government will consult with stakeholders on the Taskforce’s recommendation to inform the scope of reforms to the ABN system. This will include issues such as regular renewals of an ABN, when an ABN should be revoked and the potential for a registration and renewal fee.

    Supplemental Recommendation (Chapter 7) – Trade discounts

    To access trade discounts on purchases, businesses should have to provide their ABN to the seller who must verify and keep a record of the transaction. They should also record whether the transaction was in cash or card, and the amount.

    Government response

    The government notes this recommendation. This will be considered as part of the consultation process for ABN reforms.

    Australian Business Register review

    In March 2018, the Australian Business Registrar endorsed recommendations to improve the ATO’s administration of the Australian Business Register (ABR). These recommendations focused on:

    • ensuring the integrity of the register
    • improving the quality of ABR data usage
    • better co-ordination across government in identifying and treating risks to ABNs
    • reviewing communication and education approaches so applicants are aware why they have not been given an ABN and so those who do get an ABN are aware of their obligations
    • creating a risk based, tailored ABN application process that supports eligible applicants.

    An implementation plan has been developed that describes what will change over the next twelve months, including how we will continue to improve the client experience while managing the risks to the integrity of the ABR and tax and superannuation systems.

    The new approach impacts the community and government agencies through two focus areas:

    • ABN entitlement – understanding the end to end experience and ensuring there is a holistic treatment to help people get it right at the point they are interacting with the ABR or broader tax and superannuation systems.
    • Data sharing – working across the ATO and relevant agencies to share information and intelligence on risk to inform strategies and treatments that will flow through to the ABN entitlement experience.

    Consultation on this initiative will be undertaken in the second half of 2018.

    Focus questions

    1. Is the information published on and helpful for tax practitioners to understand who should have an ABN and their obligations once they get one (particularly for sole traders and individuals)?
    2. How do tax practitioners use the ABR on behalf of clients? For example, do tax practitioners use their contact details or client details on the ABR?
    3. How much importance is placed on updating details for businesses on the ABR? Is the process easy to do?
    4. What are your thoughts on moving the ABN registration process to an authenticated environment to provide pre-fill and more tailored advice to applicants?

    More information and links

    Tax practitioners can obtain more information on these topics from the links below and from the professional association representatives. Tax practitioners should contact their representative to contribute items for future discussions.

    See also:

      Last modified: 27 Nov 2020QC 64224