• Division 815 Technical working group minutes - 25 August 2015

    Meeting details


    747 Collins St Melbourne

    52 Goulburn St Sydney



    25 August 2015








    Michael Jenkins


    Caroline Briers

    Contact and Secretariat:

    Caroline Briers

    Contact phone:

    (03) 9285 1502


    ATO Members


    Michael Jenkins

    Assistant Commissioner, Public Groups and International

    Caroline Briers


    Helen Kelly

    Senior Tax Counsel

    Kevin O'Shaughnessy

    Senior Director, Technical Leadership Group

    Daryl Cornish

    Director, Profit Shifting Practice (Project Manager)

    Shahzeb Panhwar

    Director, Profit Shifting Practice

    Catherine Armstrong

    Director, Technical Leadership, Private Groups and High Wealth Individuals

    Rebecca Saint

    Strategy Director, Energy & Resources

    Ivar Kvistad

    Treasury Secondee

    Caroline Bath

    Project Manager, Country-by-Country Reporting

    Ross Mikulinsky

    Project Officer, Country-by-Country Reporting

    External representatives

    Reynah Tang


    Paul Suppree


    Vanda Davis


    Damian Preshaw


    Anthony Seve


    Wayne Sutherland


    Sharon Jansen


    Chris Bowman

    ATO appointee


    Stuart Edwards

    ATO appointee

    Denise Honey

    ATO appointee

    Denise Honey

    ATO appointee

    Agenda items


    Division 815 Technical working group agendas, minutes and related papers are not binding on the Australian Taxation Office (ATO) or any of the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

    1 Introduction and Welcome

    Michael Jenkins welcomed members to the meeting and introduced Ivar Kvistad, on secondment from Treasury for a year, Ross Mikulinsky, project officer from the Country-by-Country (CbC) Reporting project and Rebecca Saint, Strategic Director for the Energy & Resources sector who will be presenting the paper on marketing hubs.

    2 Minutes of 27 May meeting and action items

    Minutes were accepted.

    There were three action items from the May meeting.

    2.1 Update February minutes

    Minutes updated and action item closed

    2.2 815-130 (2) power to impute issue

    Action item was for external members to provide an example to highlight the issue with 815-130(2) power to impute. No response was received therefore action item has been closed.

    2.3 Provide information regarding accounting software issues

    Chris Bowman provided an update on issues to the meeting he advised:

    • He has held webinars with CFOs regarding CbC Reporting and the expectations in the master file and local file
    • They have been shocked by the expense of SAP or Oracle software for reports
    • There has been less of an understanding of the requirements in the Asia region compared to Europe
    • Information security is a big concern in Europe and Asia
    • Concerns have been raised about the interaction between CbC and IDS, feedback is that companies don't want to do both
    • Prefer concept of IDS for non-CbC reporters and a combined form for CbC reporters
    • Questions around interaction with APA and need for an ACR

    ATO advised:

    • We are sending out a document with Information Technology questions
    • Aware of some overlap between CbC and IDS
    • Aware of impact on Australian headquartered companies having to do complete suite of CbC, master file and local file reports
    • Subsidiaries of offshore multinationals only need to populate their row of CbC and prepare local file
    • Expect a uniform approach between CbC and the consolidated accounting method
    • No intention of diverting from OECD recommendations for master file or local file
    • CbC report will be obtained by Exchange of Information from overseas
    • Master file should come from local subsidiary, we need to consider how to manage if they can't get it from overseas, particularly if it hasn't been prepared
    • At this stage we are hoping to deal with it administratively
    • Local file will be lodged by local subsidiary
    • Tolerance around how information is presented
    • Local file is more at the 262A end of documentation spectrum
    • Not connected to domestic documentation requirements and penalty regime
    • Significant project from the ATO perspective, we are consulting early

    3 Updates

    3.1 Report on developments on transfer pricing issues

    Standing agenda item.

    3.1.1 Safe Harbour working group/simplification

    The ATO advised:

    • Simplification work continues to progress through project established by Safe Harbour Steering Group
    • Online guidance and PSLA will be updated once new work is approved
    • FAQ document was signed off then additional questions were forwarded so document is being updated to include these before publication

    3.1.2 Country-by-Country reporting

    This has been discussed at item 2.3.

    3.1.3 Marketing hub discussion paper

    The report was tabled and the ATO advised:

    • The paper is an additional attempt by the ATO to provide some informal guidance
    • The paper has a different consultation process
    • Consultation is on principles and approach rather than quantitative indicators
    • It provides some practical guidance on how we look at assessing
    • Designed to be a tool for taxpayers to assess risk and if concerned, come to talk to us early
    • Strategy is to address self-executing provisions
    • Emphasis is on secondary issues allows mechanism for taxpayers to test quality of CUP and their position
    • The ATO is interested in knowing if the document is useful and what is or isn't helpful

    Action Item number


    Action item name

    Circulate email address for feedback on paper





    Expected delivery date

    31 August

    3.1.4 TCN update

    The ATO advised:

    • there have been structural changes in TCN, it has now been reorganised into focus groups based on topical issues
    • Helen will forward details to the Secretariat for distribution

    Action Item number


    Action item name

    Circulate list of TCN focus groups





    Expected delivery date

    31 August

    A member raised two further 815-B issues that they were aware of elsewhere in the office, 768-A and the independent review process.

    The ATO advised:

    • 768-A - we met recently to develop a work program, we are formulating views and will table soon at both 768-A and Div. 815-B consultation groups
    • Independent review process - Michael Jenkins, Deb Hastings (RDR) and George Hitti are working together to develop this

    3.2 Progress of current work

    3.2.1 APA fact sheets

    These are expected to be published on 2 September.

    3.2.2 PSLA 3687

    This is undergoing final editing and is expected to be out shortly.

    3.2.3 Finance products

    These are intended to be a combination of TD’s and TR's. We hope to have a draft out before the end of the year and to finalise them in 2016.

    3.2.4 Other products

    The ATO advised:

    • we are still working through consequential adjustments, the main issue is 2007/1 and withholding tax issues. We will undertake consultation when we have something drafted.
    • Re-draft of the MAP ruling won't be done until 2016
    • Publication of benchmarked data has been subsumed somewhat by the safe harbour work, we are going to test this with a couple of APAs

    4 Discussion

    4.1 Future of working group

    The ATO advised there is one meeting left for the year and the expectation is that the group will wind up rather than continue in its current form or some other form. If the group is to continue then we need to consider what issues the group will focus on.

    Action Item number


    Action item name

    Provide feedback on future of working group





    Expected delivery date

    30 September

    5 Other business

    One member raised the issue that an addendum to TR99/1 was issued last week and they weren’t aware. They also asked how much they can rely on Div. 13 rulings under 815-B and C?

    The ATO advised that Div. 13 rulings still have application under old law and 815-A, therefore they can't be withdrawn. There are very different concepts in 815-B compared to Div. 13 therefore there is limited applicability except for broad concepts regarding the arm's-length principle.

    The member also advised that they consider 92/11 is an issue, as it is based on the 1979 OECD guidelines.

    6 Next meeting

    The final meeting for 2015 is scheduled for Tuesday 24 November.

      Last modified: 11 Jan 2016QC 47725