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