• Division 815 Technical working group minutes – 3 July 2014

    Meeting details

    Venue: ATO offices via videoconference

    747 Collins St Docklands

     52 Goulburn St Sydney

     

    Date:

    3 July 2014

     

     

    Start:

    10.00am

    Finish:

    1.00pm

    Chair:

    Michael Jenkins

    Facilitator:

    Caroline Briers

    Contact and Secretariat:

    Caroline Briers

    Contact phone:

    (03) 9285 1502

    Attendees

    ATO members

     

    Michael Jenkins

    Assistant Commissioner, Public Groups and International

    Caroline Briers

    Secretariat

    Helen Kelly

    Senior Tax Counsel

    Paul Korganow

    Assistant Commissioner, Public Groups and International

    Kevin O'Shaughnessy

    Senior Director, Technical Leadership Group

    Gus Falkenhagen

    Senior Director, Profit Shifting Practice (Project Manager)

    Catherine Armstrong

    Director, Technical Leadership, PG&H

    Shahzeb Panhwar

    Director, Internationals

    External representatives

    Liz Tromans (for Reynah Tang)

    LCA

    Soulla McFall

    CPAA

    Vanda Davis

    FCAI

    Damian Preshaw

    TIA

    Anthony Seve

    ICAA

    Michelle DeNiese

    CTA

    Sharon Jansen

    MCA

    Wayne Sutherland

    ABA

    Denise Honey

    ATO appointee

    Chris Bowman

    ATO appointee

    Apologies

    Stuart Edwards

    ATO appointee

    Reynah Tang

    LCA

    Michael McCormack

    ATO

    Agenda items

    Disclaimer

    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

    The Chair welcomed the group and introduced members. The Chair advised that the purpose of the meeting was to discuss the draft paper on simplification options for transfer pricing documentation.

    2. Minutes of 9 May meeting and action items

    Minutes were accepted.

    2.1 Publication of minutes

    The secretariat advised that the March minutes have been published. The project manager advised that the Consultation hub has requested that draft minutes be published as soon as available rather than waiting for working group approval.

    2.2 Circulation of timetable of consultation sessions

    The secretariat circulated to members 9 May.

    2.3 Update on progress of review of International PSLAs

    Listed as Agenda item 3

    3. Update on progress of review of International PSLAs

    The Chair advised that this item is out of scope for this working group, however it will be dealt with on this occasion.

    Paul Korganow, Assistant Commissioner, Profit Shifting Practice addressed this item.

    The ATO advised that there is an internal review of the APA program currently being undertaken and, once the review is finalised, it is likely that PSLA 2011/1 will be rewritten. The new document will be principle based. This review will also consider what information the ATO will publish regarding the APA program. Once the internal review is completed and recommendations are made, the ATO will consider options for external consultation, in the interim, any issues can be sent to the consultation hub consult@ato.gov.au for response.

    The three PSLAs that have been withdrawn will not be replaced. Risk reviews going forward will not be transfer pricing specific, they will be conducted under the International Structures and Profit Shifting (ISAPS) program and will cover transfer pricing in conjunction with other international risks.

    4. Timetable for future meetings

    The ATO advised:

    The Rulings panel for the finalised rulings is scheduled for 22 August 2014 and the documents need to be sent to them by 7 August 2014, therefore the next meeting will be scheduled for 31 July 2014 if members wish to provide further input.

    It was agreed that the ATO will circulate draft compendiums so that members are aware of all the issues raised, common themes and how the ATO plans to address the issues.

    The next meeting will give members another option to look and see if there is anything else that needs to be addressed.

    The ATO considers there is a balance between the need to complete the products to provide certainty in a timely manner and the need for the products to evolve with changes in the OECD and from the IGoT review.

    The ATO will consider an appropriate timetable for review of these products and will publish the timetable in the rulings program.

    Review could be triggered by different variables therefore the timetable will need to be flexible.

    Additionally the products will undergo a formal post-implementation review.

    Action item number

    03072014.01

    Action item name

    Circulate draft compendiums

    Responsibility

    Secretariat

    Status

    Open

    Expected delivery date

    17 July 2014

    5. Discussion – options to simplify documentation

    The ATO presented the document and advised:

    The paper is designed to provide options to minimise the record keeping requirements for transfer pricing using a risk-proportionate approach.

    It includes a series of specific options that, if they apply to an entity, means that the ATO won't be committing resources to review compliance.

    The options are designed to be simple to allow entities to self-assess their risk.

    High level monitoring will be undertaken across the market over three years to assess the impact of the measures.

    The product will include a sunset clause of three years to ensure that it is reviewed to consider whether it should continue, expand or cease.

    The document was discussed in detail and members suggested some changes. The document will be updated and sent to members to discuss widely within their membership.

    Action item number

    03072014.02

    Action item name

    Distribution of updated simplification document for wider discussion

    Responsibility

    Secretariat

    Status

    Open

    Expected delivery date

    10 July 2014

    6. Other business

    None noted.

    Next meeting

    The next meeting is scheduled for 31 July 2014 in Melbourne.

      Last modified: 25 Aug 2014QC 42187