• 2014 Completed matters

    The following 2014 consultation matters have either been completed or actioned through other processes.

    Matters that were outside the scope of our consultation processes as determined by our consultation principles were actioned through other processes including discussions with relevant staff and highlighting our existing information and guidance processes.

    We also directly provided information, and referred to the public or private ruling programs and the TIES (Tax Issues Entry System).

    If you have any queries about these matters contact the ATO Consultation Hub at consult@ato.gov.au

    [2014103] Rental guarantees income tax treatment

    [2014102] Improving myTax take up and keeping track of super with myGov

    [2014101] Interest benefits and First Home Saver Account

    [2014100] Legislating EFTPOS or PayPal availability for all businesses

    [201499] Availability of section 25-90 deductions for amounts incurred in earning income that is exempt under both section 23AH and section 23AJ

    [201497] Single Touch Payroll

    [201496] Application of TOFA to repurchase agreements (repos)

    [201495] Branch Attribution: s820-300(3) Authorised Deposit-taking Institutions (ADI) Equity Capital and Controlled Foreign Entity Equity [NEW]

    [201494] ATO’s compliance approach to Taxation of Financial Arrangements

    [201493] Applying hedging method in Subdivision 230-E to net investment in a foreign operation

    [201492] Application of Subdivision 820-D to Authorised Deposit-taking Institutions using Australian Prudential Regulation Authority conglomerate rules

    [201491] Interpretation of section 215-10 in relation to when certain non-share dividends paid by Authorised Deposit-taking Institutions are un-frankable [NEW]

    [201490] Clarification of ATO treatment of 'draft' tax invoices

    [201489] Tax deductible travel – travelling allowance or living-away-from-home allowance – ‘21 days’ guideline

    [201488] Involuntary superannuation account transfer protocol

    [201487] Closure of e-tax and myTax

    [201486] Communicating with people with a disability

    [201485] Luxury car tax

    [201484] ATO guidance on the tax treatment of website development expenditure

    [201483] Tax agent lodgment program

    [201482] Examining the feasibility of ‘safe harbours’ in the tax system to reduce compliance costs

    [201481] Trustee nil assessments

    [201480] Improving communications around Director Penalty Regime

    [201479] Review of public ATO advice and guidance

    [201478] Improving ato.gov search functionality

    [201477] FBT minor benefits

    [201476] GST refund verification process

    [201475] Audit insurance

    [201474] Pre-issue compliance program correspondence

    [201473] ATO guidelines when contacting clients of tax practitioners

    [201472] Intermediaries correspondence report

    [201471] Collection and use of sex/gender information by the superannuation industry

    [201470] Effective life review of assets used in the professional photographic services industry

    [201469] Effective life review of assets in Table B of the Commissioner’s schedule

    [201468] Effective life review of assets used in the other machinery and equipment repair and maintenance industry

    [201467] Effective life review of assets used in the surveying and mapping services industry

    [201466] Effective life review of assets used in the waste services industry

    [201465] Effective life review of assets used in the rigid and semi rigid polymer manufacturing industry

    [201464] Effective life review of assets used in the coal seam gas extraction industry

    [201463] Tax status of certain grape alcohol beverages

    [201462] Excise (Blending Exemptions) Determination 2014 (No. 1)

    [201461] Publishing risk factors for small-to-medium enterprises and wealthy individuals

    [201460] Reporting of taxable government grants and other specified payments

    [201459] ELS to SBR video and animation communication products

    [201458] Compliance in focus replacement product

    [201457] Superannuation contributions gainfully employed part time

    [201456] Improving the private groups and wealthy individuals client experience

    [201455] Insolvency workshops

    [201454] Review of the ATO pre-lodgment compliance review product

    [201453] TOFA and interest withholding tax

    [201452] Limited recourse borrowing arrangements and non-arm’s length Income

    [201451] Guidance for the Foreign Account Tax Compliance Act (FATCA)

    [201450] Guidance on administration of penalty for failure to provide a document as required

    [201449] Effective life review of assets used in the postal services industry

    [201448] ABN entities not registered for GST who charge GST on invoices

    [201447] Guidance on deductibility of accrued expenses

    [201446] Ancillary fund return online consultation

    [201445] Superannuation excess contributions tax – contributions reserving

    [201444] Superannuation Guarantee payments for defined benefits after 30 years' service

    [201443] Permanent establishment - secondment arrangements

    [201442] Small business newsroom

    [201441] Establishment of appropriate minimum residual values for finance leases of cars

    [201440] Obtaining TFN's for people with intellectual disabilities

    [201439] GST treatment of motor vehicle incentive payments

    [201438] Standard Distribution Statement and AIIR

    [201437] Improving the income tax objection process

    [201436] Deductibility of costs incurred to set up a Limited Recourse Borrowing Arrangement (LBRA)

    [201435] Variation of PAYG instalments

    [201434] Business viability assessment tool

    [201433] Application of Division 230 (TOFA provisions) to securitisation transactions

    [201432] Administrative approach to income tax transfer pricing and customs duty

    [201431] Settlement code

    [201430] Definition of commercial residential premises for GST purposes

    [201429] Share capital tainting - accounting for employee share schemes

    [201428] Financial supplies guidance products

    [201427] Australian tax treatment of Bitcoin and other crypto currencies

    [201426] Guidance on the administrative treatment of taxpayers affected by discontinued announced legislative measures

    [201425] Application of section 47A of the Income Tax Assessment Act 1936

    [201424] ATO compliance action on dividend washing

    [201423] Identifying potential continuing professional development (CPD) topics for legal practitioners

    [201422] Deductibility of commercial website expenditure

    [201421] Reducing regulation and red tape

    [201420] Clarification of the requirements of a valid notice issued by the Commissioner of Taxation

    [201419] Potential double taxation - CGT Event E4 and ATO ID 2012/63

    [201418] ABN POI (proof of identity) requirements for non-individual entities non-resident associate issues

    [201417] Subsection 12-H withholding and custodians

    [201416] Proposed statement of approach to electronic service delivery

    [201415] Tailored Business Returns project – consultation with software developers and tax practitioners

    [201414] Australian custodians’ tax return obligations in respect of trustee liabilities under section 98 of the ITAA 1936

    [201413] Taxation exemptions for foreign governments (Sovereign Immunity)

    [201412] Wine equalisation tax (WET) earlier producer rebate

    [201411] Accounting data-based case selection

    [201410] Streamlined tax return systems

    [201409] Review of the effective life of assets used in the scientific, medical and pharmaceutical research industry

    [201408] Review of the effective life of assets used in the ready-mix concrete manufacturing industry

    [201407] Offshore voluntary disclosure initiative

    [201406] GST law relating to tax invoices and the use of estimations to calculate claims for GST input tax credits

    [201405] Apportionment of PRRT payments for procured services

    [201404] Feasibility and potential operation of statutory remedial powers for the Commissioner of Taxation

    [201403] In what circumstance is an asset of a complying superannuation fund a segregated current pension asset?

    [201402] Small business CGT concessions and unpaid present entitlements

    [201401] Tax Laws Amendment (2012 Measures No. 2) Act 2012 - Dual application of pre and interim rules to single asset

    [2014103] Rental guarantees income tax treatment

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [2014102] Improving myTax take up and keeping track of super with myGov

    Purpose

    To co-design a joint approach to expand the take up of myTax by individual taxpayers during Tax Time 2015 and beyond.

    Description

    Discuss how practitioners can support clients with a myGov registration and help them to find and consolidate their superannuation accounts.

    Who we consulted

    Members of the ATO Tax Practitioner Advisory Group, other professional associations and interested tax practitioners

    Outcomes

    Files containing client super information were issued to pilot agencies using the ATO’s Bulk Data Exchange facility in late May, in time to be able to circulate the information to relevant agents and provide any required training to staff prior to the influx of clients at tax time.

    In addition, pilot agencies were provided with support material including:

    • instructional videos about signing up and logging onto MyGov and ATO Online, and about how to view and consolidate super accounts using this tool
    • presentation material giving an overview of what the pilot is about
    • suggested content for electronic communication with clients for those agencies who operate online.

    Ongoing support will be provided through direct communication between the ATO and these agencies and will continue until the bulk of tax time 2015 business has been completed. The ATO will then work with the pilot agencies to measure the impact of the pilot on account consolidation and consider whether a long term solution to provide super information to tax agents is worthwhile.

    [2014101] Interest benefits and First Home Saver Account

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [2014100] Legislating EFTPOS or PayPal availability for all businesses

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201499] Availability of section 25-90 deductions for amounts incurred in earning income that is exempt under both section 23AH and section 23AJ

    Purpose

    Take views from industry into account in developing the ATO’s view on the availability of a deduction under section 25-90 (Income Tax Assessment Act 1997) for amounts incurred in earning income that is exempt under both section 23AH and section 23AJ (Income Tax Assessment Act 1936)?

    Description

    The ATO has identified a need to clarify its view on this matter to allow taxpayers to take that view into account when managing their tax affairs.

    Who we consulted

    Subject matter experts nominated by The Tax Institute, CPA Australia, CAANZ, Law Council of Australia, Corporate Tax Association, Financial Markets Association, Australian Bankers' Association and affected taxpayers.

    Outcomes

    The ATO proposes to issue a Draft Taxation Determination in mid-2015 which will provide that a loss or outgoing is not deductible under section 25-90 of the Income Tax Assessment Act 1997 where that amount is incurred in earning income that meets the requirements for exemption in both section 23AH and section 23AJ of the Income Tax Assessment Act 1936.

    The ATO proposes a prospective application date in respect of losses or outgoings incurred in the first income year commencing after 30 June 2015.

    The ATO received comments on the proposed approach, which will be taken into account in preparing the Draft TD. Industry representatives were provided with the opportunity to make submissions on any practical issues arising from the proposed date of application or in relation to restructuring.

    Submissions in respect of the substantive legal issues can be made in response to the Draft TD when it is published.

    This consultation took place over December 2014 to March 2015.

    [201497] Single Touch Payroll

    Purpose

    The purpose of this consultation is to determine how the potential introduction of Single Touch Payroll might impact agents’ practices and clients’ business.

    Description

    Single Touch Payroll is an initiative that uses the payroll event to fulfil employer reporting obligations. The first phase will deal with Pay As You Go Withholding Tax (PAYGW) and superannuation contributions. Subsequent phases could expand scope to include the fulfilment of additional reporting obligations to other government agencies and intermediaries.

    Businesses would complete their payroll and simultaneously fulfil the following reporting obligations:

    • providing an electronic pay slip to staff
    • reporting earnings and PAYGW tax electronically
    • reporting superannuation electronically.

    Implementing the Single Touch Payroll proposal would require employers (or their payroll provider) to use Standard Business Reporting (SBR) enabled business management software.

    Single Touch Payroll will also have an impact on tax professionals – both BAS and tax agents – who deal with business clients.

    Who we consulted

    Individuals, small and medium businesses, tax and accounting professionals, BAS Agents, stakeholders in the not for profit sector, large employers, software providers, payroll providers, superannuation funds, financial institutions, Council of Small Business of Australia, Australian Council of Social Service, Institute of Certified Bookkeepers, Chartered Accountants Australia and New Zealand, Business Enterprise Centres Australia, CPA Australia, NSW Business Chamber, Institute of Public Accountants, BAS Agent Advisory Group, Small Medium Enterprise Association of Australia, Institute of Certified Bookkeepers, Superannuation Industry Relationship Network, government agencies and the SMSF Association.

    Outcomes

    Consultation in this round occurred between July 2014 and March 2015.

    This consultation has provided a better understanding of the impacts of the proposal on agents’ practices and clients’ businesses.

    The Government is committed to continuing consultation on this proposal and the ATO is working with them through the next steps.

    [201496] Application of TOFA to repurchase agreements (repos)

    Purpose

    To consult on the application of the TOFA provisions in Division 230 of the Income Tax Assessment Act 1997 to repurchase agreements (repos).

    Description

    We are consulting on whether guidance can be provided on the application of Division 230 to repos. This includes the treatment of both the in-substance financing component of the repo, and the treatment of the underlying asset.

    Who we are consulting

    Tax practitioner and legal, accounting, finance and banking industry representatives through AFMA and ABA.

    Outcomes

    The ATO has had discussions with industry on the potential to publish compliance guidance product on repurchase agreements.

    The current consultation process on REPOs/ TOFA has been discontinued due to the current broader TOFA review and the lack of priority given to this process.

    The ATO initiated discussions with industry to discuss the idea of developing a compliance guidance product for low risk transactions that were essentially repos over bonds. This was seen by the ATO as a potentially worthy compliance product.

    Draft features of repos that the ATO considered developing a compliance guidance product in relation to were sent to industry in July 2015 for their comment.

    Further consultation on repos and Division 230 will continue via the broader TOFA review.

    [201495] Branch Attribution: s820-300(3) Authorised Deposit-taking Institutions (ADI) Equity Capital and Controlled Foreign Entity Equity

    Purpose

    To understand the approach taken by ADIs when attributing equity capital and controlled foreign entity equity to permanent establishments in the context of complying with the thin capitalisation requirements.

    The aim is to reach a set of agreed principles that can be broadly and effectively applied to provide assurance for the industry.

    Description

    The issue relates to the way outward investing entities (ADI) are calculating their adjusted average equity capital for thin capitalisation purposes.

    This process will provide an opportunity for the ABA and its members to discuss how they approach attribution for thin capitalisation purposes and to discuss methods to simplify and clarify the approach to make compliance more effective.

    To also explore how TR 2005/11 complements any approach agreed to and whether revision is necessary.

    Who we consulted

    The Australian Bankers’ Association.

    Outcomes

    An updated discussion paper for both Part A - Attribution of equity capital and Part B - Attribution of controlled foreign entity equity was released to the consulting industry body in October 2016. Final industry response is due by 28th October 2016.

    Practical Compliance Guidelines are expected to be published in November 2016. A Taxation Determination on Part B will be published at a later date.

    Contact

    Dean Lynch

    Risk & Strategy – Banking and Finance

    Public Groups and International

    dean.lynch2@ato.gov.au telephone: 02 9374 8567

    [201494] ATO’s compliance approach to Taxation of Financial Arrangements (TOFA)

    Purpose

    To understand the sources of taxpayer compliance costs in relation to the ATO’s administration of the TOFA rules.

    Description

    It has been suggested to the ATO that aspects of our compliance approach to the TOFA rules have imposed unnecessary compliance costs upon taxpayers.

    We want to understand the sources of these compliance costs, and whether there is anything we can do to alleviate them by way of guidance or other material.

    One of the recurring areas of concern is whether the ATO’s compliance approach to the hedging documentation requirements for hedging financial arrangements set out in sections 230-355 and 230-360.

    We are very interested to hear about other key irritants where industry thinks we could give either law or compliance guidance.

    Who we consulted

    Major financial institutions and banks, energy and resources taxpayers, relevant industrial taxpayers, Australian Bankers’ Association, Australian Financial Markets Association, The Tax Institute, Chartered Accountants Australia and New Zealand, CPA Australia, Financial Services Council, Law Council of Australia.

    Outcomes

    The ATO has been consulting with industry bodies to seek their feedback.

    The ATO thanks industry for the feedback provided.

    The main areas where it was suggested the ATO could reduce compliance costs was in its approach to the TOFA Implementation reviews and the TOFA disclosure requirements in income tax returns.

    In relation to the reviews, most of them have been completed. However, industry’s concerns have been noted for the purposes of going forward.

    In relation to income tax returns, the ATO will review in detail existing income tax return disclosures to determine whether they could be removed or streamlined. This will involve balancing the need to reduce compliance costs as against statutory requirements the ATO has to collect certain types of information (particularly for PAYG Instalments purposes).

    Industry will be consulted as part of our review of the income tax return disclosures.

    [201493] Applying hedging method in Subdivision 230-E to net investment in a foreign operation

    Purpose

    To understand the current practices of relevant taxpayers and their advisors, and any practical concerns, in applying Subdivision 230-E of the Income Tax Assessment Act 1997 (ITAA 1997) to a hedging financial arrangement (HFA) in the context of a net investment in a foreign operation (NIFO).

    Description

    Subdivision 230-E of the ITAA 1997 attempts to minimise after-tax mismatches where there is an accounting hedge, by aligning tax treatment of a HFA to a hedged item in terms of taxation timing and characterisation. That is, Subdivision 230-E of the ITAA 1997 seeks to ensure that the taxation of the HFA does not undermine the economic effectiveness of such a hedge.

    Paragraph 230-335(10) (e) includes a NIFO in the list of ‘hedged items’ which are relevant for Subdivision 230-E. A NIFO is an accounting concept, which essentially refers to the net assets of a foreign operation on the consolidated statement of financial position of an Australian-headquartered accounting group. These assets have little to no direct recognition by the Australian taxation system. The reference to an accounting concept with limited direct recognition by the Australian tax law creates a tension between the stated objectives of Subdivision 230-E of the ITAA 1997 in aligning the tax timing and characterisation of the HFA and hedged item and the practical application of the Subdivision to a hedge of a NIFO.

    We invite feedback on the following topics to increase our understanding of the following matters:

    • how different taxpayers define a NIFO, including the legal structures through which a NIFO can be held/operated
    • the accounting treatment in relation to NIFOs and the hedging of NIFOs, including the circumstances where a NIFO will be taken to have been ‘disposed of’ for accounting purposes
    • tax timing matching under section 230-360 of the ITAA 1997 in terms of recognition events and allocation – in particular with respect to practical considerations of accuracy and compliance costs
    • tax character matching under section 230-310 of the ITAA 1997.

     

    Who we consulted

    Major financial institutions and banks, energy and resources taxpayers, relevant large industrial taxpayers and their advisors.

    Outcomes

    The ATO is currently analysing the submissions and considering the most appropriate way forward. In so doing, we will continue discussions with taxpayers.

    If the ATO decides to issue guidance, it will do so in consultation with those involved in this process.

    We continue to welcome any taxpayers that may wish to engage with us on this issue to contact us.

    [201492] Application of Subdivision 820-D to Authorised Deposit-taking Institutions (ADIs) using Australian Prudential Regulation Authority (APRA) conglomerate rules

    Purpose

    Scope the impact of APRA’s proposed conglomerate rules on the thin capitalisation calculations of outward investing ADIs.

    To examine approaches to dealing with the impact of APRA’s proposed conglomerate rules on the thin capitalisation calculations of outward investing ADIs.

    Description

    APRA reforms in relation to the extension of its capital framework to Level 3 conglomerate groups are due to be implemented in 2015. Industry has raised the proposed change to the prudential framework in the context of the thin capitalisation calculations for outward investing ADIs.

    This consultation process aims to scope the impact of the change, and to examine options for dealing with the application of Subdivision 820-D of the ITAA 1997 using APRA’s proposed conglomerate rules.

    Who we are consulting

    Australian Bankers’ Association and the Australian Prudential Regulation Authority

    Outcomes

    In consultation with the ABA, the ATO has assessed the feasibility of an alternative approach to the thin capitalisation calculations for outward investing ADIs, incorporating the proposed APRA prudential standards for Level 3 conglomerate groups. The ATO prepared and circulated a discussion paper, detailing a possible administrative solution, and received feedback from the banking industry in this regard.

    On 29 March 2016, APRA announced the decision to defer finalisation of the capital components of the Level 3 framework. We note from the announcement that APRA intends to undertake further consultation and that this consultation is not anticipated to commence earlier than mid-2017, and that implementation of any new requirements will be no earlier than 2019.

    Given APRA’s proposed further consultation on the capital component of the Level 3 framework, the lengthy deferral, and the integral role this component plays in a possible administrative solution and in this consultation process, this consultation item is closed. Pending the final form of the capital component of the Level 3 framework, the ATO may revisit the possible administrative solution and open consultation accordingly.

    This outcome has been communicated to members of the thin capitalisation working group, through the ABA.

    [201491] Interpretation of section 215-10 in relation to when certain non-share dividends paid by Authorised Deposit-taking Institutions are un-frankable

    Purpose

    To inform the design of replacement guidance in relation to the interpretation of paragraph 215-10(1)(c) of the ITAA 1997 following the withdrawal of Tax Determination TD 2012/19 on 8 October 2014.

    Description

    The view outlined in Tax Determination TD 2012/19 created unintended practical difficulties for banks in legitimately gaining access to the concession provided by the section 215-10 of the ITAA 1997. As a result, TD 2012/19 was withdrawn on 8 October 2014. The ATO is now commencing the design of replacement guidance in relation to section 215-10 of the ITAA 1997, and will develop an ATO view in light of the feedback provided.

    Who we consulted

    Australian Bankers’ Association.

    Outcomes

    In consultation with the ABA, the ATO has developed a Practical Compliance Guideline (PCG) on the expectations of the Commissioner on the application of paragraphs 215-10(1)(c) and 215-10(1)(d) from a compliance perspective.

    The PCG will allow taxpayers to assess the extent to which their facts, circumstances and associated tax treatment are perceived by the Commissioner as presenting a risk of non-compliance.

    The PCG will be published shortly.

    [201490] Clarification of ATO treatment of 'draft' tax invoices

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201489] Tax deductible travel – travelling allowance or living-away-from-home allowance – ‘21 days’ guideline

    Purpose

    To clarify whether the general practical guidance provided in MT 2030 relating to the distinction between ‘travelling’ or ‘living-away-from-home’, particularly the '21 day rule' is, today, still appropriate.

    Description

    Whether a person is ‘travelling’ or ‘living away from home’ can result in different tax consequences from both the employer and employee perspectives. This distinction has become important following the legislative changes to the living-away-from-home provisions in the FBTAA which came into effect in October 2012. In reviewing this matter, including the '21 day’ rule and the impact that has on deductibility issues, it has been decided to address concerns that have been raised by way of a taxation ruling.

    Who we consulted

    National Tax and Accountants’ Association (NTAA), The Tax Institute and the Institute of Public Accountants.

    Outcomes

    The need to provide certainty to the community on the taxation implications in relation to the deductibility of travel expenses for current day work practices was recognised during the consultation phase. We consulted with industry to understand the main issues confronting employers and employees in this regard and to assist us to appreciate contemporary working arrangements and ultimately to reach agreement that updated guidance is this area of the law is required.

    Consequently, the ATO has agreed to develop a Taxation Ruling on this topic.

    [201488] Involuntary superannuation account transfer protocol

    Purpose

    To clarify superannuation fund member data issues that arise during or following involuntary superannuation account transfers (ISATs).

    Description

    Large scale transfer of superannuation fund member accounts without members’ consent can occur when funds or administrators merge or transfers occur to MySuper products and eligible rollover funds.

    The superannuation industry is seeking clarity on their responsibilities in relation to member data transfer and there are a number of technical issues needing a clear ATO view.

    The ATO is developing an ‘ISAT Protocol’ to provide such clarity and guidance. It will supplement and complement the prudential guidance provided by APRA, focusing on taxation-related issues.

    The ATO is also working closely with the Australian Prudential Regulation Authority (APRA).

    Who we consulted

    APRA, large superannuation fund trustees, administrators and software developers.

    Outcomes

    The Superannuation Administration Stakeholders Group (SASG) met on 26 November 2014.

    The National Superannuation Industry Advisory Group (NSIAG) was provided an update on the ISAT Protocol project at the 15 December 2014 meeting.

    A draft protocol was provided to SASG members on 23 February 2015 as pre-reading for the meeting held on 4 March 2015.

    Some written feedback was received from members.

    A further teleconference with interested members was held in late March and feedback from that consultation is being incorporated in a version to commence the technical clearance process 14 April 2015.

    The protocol has been released.

    [201487] Closure of e-tax and myTax

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201486] Communicating with people with a disability

    Outcome

    This matter was actioned through other processes.

    A meeting was held with relevant key intermediaries representing people with disabilities.

    [201485] Luxury car tax (LCT)

    Purpose

    Replace the Working out the LCT on a sale section on our website with Calculating-your-LCT, Working-out-the-LCT-on-a-sale.

    Changes to this section have been made to include additional examples covering likely scenarios and a view was sought from industry.

    Provide updated/revised information to the web audience for luxury car tax. This audience includes a range of groups – dealers, tax professionals, software developers and the individuals who purchase luxury cars.

    Description

    Following the issue of GSTR 2014/1 on motor vehicle incentive payments, it is necessary to update other ATO guidance products to reflect the changes to LCT calculations as a result of treating certain types of motor vehicle incentive payments as ‘third party consideration’.

    Who we consulted

    Motor vehicle industry stakeholders, including the FCAI, AMIF and the VACC.

    Outcomes

    The ATO met with the Federal Chamber of Automotive Industries (FCAI) on 19 May 2014 and the Australian Motor Industry Federation (AMIF) and Victorian Automobile Chamber of Commerce (VACC) on 21 May 2014 to discuss the draft ruling. It was agreed that we would consult with the FCAI and AMIF on any changes to guidance products in relation to motor vehicle incentives.

    Industry feedback has been received and we are reviewing the feedback with a view to updating the LCT Guide in due course.

    [201484] ATO guidance on the tax treatment of website development expenditure

    Purpose

    Consult with stakeholders to understand the required scope of any guidance to be published on this issue and to assist in determining its most appropriate form.

    Description

    Identify issues particular to the operations of the industry and the appropriate treatment of certain types of expenditure as revenue outgoings, capital expenditure or under the uniform capital allowances (UCA) regime.

    TR 2001/6 Income tax: deductibility of commercial website expenditure was withdrawn on 5 August 2009 due to changes in the law and industry practice.

    Who we consulted

    Chartered Accountants Australia and New Zealand (CAANZ), National Tax and Accountants' Association (NTAA), Taxpayers Australia, The Tax Institute, Institute of Public Accountants (IPA), Corporate Tax Association, CPA Australia and large accountancy firms.

    Outcomes

    An internal working draft of a public ruling is being finalised. The draft ruling will be reviewed by senior ATO staff in preparation for its referral to the Public Rulings Panel in late January 2016.

    Tax practitioners and industry experts will have a further opportunity to provide input when the draft ruling is released for public comment around mid-March 2016.

    The ATO Small Business newsroom article on Claiming website development costs has been updated to reflect changes in the laws relating to in-house software and the $20,000 small business write-off.

    [201483] Tax agent lodgment program

    Purpose

    To consult on potential improvements to the annual tax agent lodgment program and the Lodgment Program framework. In addition, the scope of the forum has been broadened to include the reliability and stability of the portals and the timely engagement and connection with the practitioner community.

    Description

    Following the first full year of operation the Lodgment Program Framework, the Lodgment Working Group met to review the current program and agreed to consider refining the design to cater for the impact of past year returns, clarify what and when treatments will be applied to under-performers and to enhance communication.

    Who we consulted

    Tax practitioners and Chartered Accountants Australia and New Zealand (CAANZ), CPA Australia, National Tax and Accountants’ Association, The Tax Institute, Institute of Public Accountants and the Office of the Inspector-General of Taxation.

    Outcomes

    • New deferral request forms have been published. An article informing agents of the new forms was published in the Tax Professionals Newsletter on 10 February 2016.
    • Enhanced the deferrals process to enable practitioners to request a deferral for new or returning clients with multiple overdue returns.
    • Suspension of action on overdue lodgments – the initiative enables agents to nominate prior year returns where it may be reasonable to ‘suspend’ further lodgment compliance activity.
    • Provided business specifications for functionality enabling tax practitioners to self-monitor their lodgment program on-time lodgment performance to software developers to build into practice management software.
    • Provided business specifications for functionality enabling agents to request lodgment deferrals through their practice management software and receive real time confirmation of their request to software developers. This innovation will significantly decrease resources required to process deferral requests.
    • Carried out field force visits to tax practitioners, in collaboration with Service Delivery staff, increasing awareness and visibility of ATO-developed digital products and services.

     

    Contact

    Colin Walker

    Assistant Commissioner, Tax Practitioner, Lodgment Strategy and Engagement Support

    colin.walker@ato.gov.au telephone: 02 6216 1103

    [201482] Examining the feasibility of ‘safe harbours’ in the tax system to reduce compliance costs

    Purpose

    To develop tangible ‘safe harbours’ in the tax system that reduce costs of compliance for taxpayers and the ATO while maintaining the integrity of the tax system. Consultation by the safe harbours steering group (SHSG) for the establishment of safe harbour working groups has been completed.

    Future consultation will be undertaken by the safe harbour working groups.

    Description

    The purpose of the consultation is to progress the development and application of safe harbours in the tax system via the safe harbours steering group.

    The timelines for the safe harbour working groups provide that initiatives should proceed from ideas to proposed recommendations to the SHSG in a target timeline of three to six months from their commencement of their activities and, following endorsement by the SHSG, the corresponding solutions are implementation ready within the next three months.

    The SHSG will receive progress reports from the safe harbour working groups and will provide feedback and guidance to them.

    Who we consulted

    Consultation for the establishment of the safe harbour working groups was undertaken by the Australian Taxation Office with appointed NTLG member representatives (Corporate Tax Association, Chartered Accountants Australia and New Zealand (CAANZ)) and Treasury.

    Outcomes

    The (SHSG) met on 3 March 2015 and agreed to the establishment of safe harbour working groups in the areas of transfer pricing, FBT and remuneration, SMEs, tax and accounting, GST and Excise, and approved their statements of intent or terms of reference and their membership, noting that the latter will be flexible.

    [201481] Trustee nil assessments

    Purpose

    To consider any potential refinements to the ATO’s practice in relation to trustee assessments and making the material easier to locate on the ATO web site.

    Description

    The ATO’s administrative approach of only raising an original trustee assessment within four years from the later of the due date for lodgment of the trust return or the actual lodgment date of the return (except where there has been fraud or evasion) is published on ato.gov.au but is difficult to find.

    In restating the practice more prominently, we plan to address a number of issues that have been raised about its application. We are also considering whether it is appropriate that the practice apply where deliberate steps are taken to take advantage of it with the result that some part of the net income of a trust is not assessed to a beneficiary or the trustee.

    Who we consulted

    Closely-held trust working group members

    Outcomes

    PS LA 2015/2 was published on 19 February 2015.

    [201480] Improving communications around Director Penalty Regime

    Purpose

    Consult with the tax profession and other intermediaries on the proposed improvements in communication that increase the awareness of company directors of the director penalty regime.

    It is expected that once implemented and communicated, the new products will improve the awareness of directors of the director penalty regime.

    Description

    Reduce impediments faced by small business in relation to the regime by:

    • improving the awareness and understanding of new directors
    • improving administrative processes for issuing director penalty notices
    • improving the timing and visibility of communications issued to directors, and their representatives.

    Improved messages will be delivered to newly appointed directors by:

    • taking opportunities to work more closely with the tax profession and other intermediaries
    • engaging and consulting tax professionals and other intermediaries about the changes.

    Consultation on:

    • our approach commenced in October 2014
    • improvements to our letters will commence in November 2014
    • improvements to content on our website commenced in November 2014.

     

    Who we consulted

    Tax practitioners and other intermediaries.

    Outcomes

    Consultation with professional bodies, including representatives of tax and accounting professional associations, commenced in October 2014. Met with ATPAG members on 13 November 2014. Feedback has been received and is being implemented.

    Improvements to our letters have now been made, and these new letters are currently in testing.

    This updated information is now available.

    [201479] Review of public ATO advice and guidance

    Purpose

    To consult a range of stakeholders in relation to strengths and potential points of improvement in relation to the current products, processes and delivery platforms for public ATO advice and guidance.

    The object of consultation is to identify ways to appropriately tailor products to their intended audience to meet community needs and expectations.

    Description

    A key focus in the ATO‘s vision and strategic intent is to support willing participation and compliance with the tax and super systems.

    One of the ways that the ATO has been supporting taxpayers in the self-assessment environment is to provide binding and non-binding ATO advice and guidance on how the tax laws apply.

    We are undertaking an internal review to identify strengths and opportunities for improvement to our advice and guidance products.

    We will also review our processes and delivery platforms to consider whether they are appropriately tailored to their intended audience and that they are timely and aligned with community needs and expectations.

    The scope of the review includes the following advice and guidance products:

    • rulings (including determinations)
    • product rulings
    • class rulings
    • taxpayer alerts
    • ATO interpretative decisions
    • decision impact statements
    • law administration practice statements
    • edited versions of written binding advice (available via the register of private binding rulings)
    • public guidance (general advice on the ATO website such as fact sheets)
    • private rulings and private advice (to the extent that those private rulings or advice impinge or inform upon the delivery of public advice or guidance products).

    The scope of this project does not include general correspondence to taxpayers or our phone services.

    Who we consulted

    Members of the National Taxation Liaison Group, ATO Tax Practitioners Advisory Group, Large Business Liaison Group, GST Advisory Group, Superannuation Industry Relationship Network and the Individuals Taxation Liaison Group, individuals and small businesses, tax and  accounting professionals, stakeholders in the not for profit sector, Treasury and various industry associations including the Property Council of Australia, Financial Services Council, Australian Financial Markets Association, Australian Bankers Association, Minerals Council of Australia, Infrastructure Partnerships Australia, Master Builders Association and the Australian Industry Group.  

    Outcomes

    The feedback received has been incorporated into the final recommendations to be considered by the ATO Executive.

    A separate consultation process will be established in relation to the implementation of the relevant endorsed recommendations.

    Further information about future public advice and guidance is now available.

    Announcements on any further consultation or co-design activities will be made via our website. If you would like to be involved, visit the Consultation Hub website.

    [201478] Improving ato.gov search functionality

    Purpose

    To obtain feedback about expectations, experience, and frustrations with using the search functionality from users of ato.gov.au for input into the review process to improve our online services.

    Description

    The ATO is seeking specific information to better understand customer expectations and gain greater insight to specific frustrations and failures with the existing ato.gov.au search functionality.

    Who we consulted

    Superannuation Industry Relationship Network, representatives of the Individual Taxpayer Liaison Group and Small Business Liaison Group member organisations, and/or selected small business consultation panel members.

    Outcomes

    Google Enterprise Partner, DMSBT, with support from the ATO reviewed the search functionality on ato.gov.au

    External views regarding search functionality were captured and considered in the development of the review process.  Participant feedback reinforced experience and expectations that had been received previously via existing feedback channels.

    [201477] FBT minor benefits

    Outcome

    This matter was actioned through other processes.

    The ATO provided clarification and made improvements to an existing publication.

    [201476] GST refund verification process

    Purpose

    To broaden general awareness of the management of the Refund Integrity process and to seek input into possible changes to our advice products.

    Description

    The ATO has had meetings with The Tax Institute and consulted with members of the GST Advisory Group and associated representatives.

    At the phone hook-up on 9 December 2014, with The Tax Institute the ATO agreed to provide the following in early 2015:

    • a modified overview of the verification procedures and examples for feedback to the GST Advisory Group and The Tax Institute
    • statistics on refund integrity and large market clients to The Tax Institute.

    At the ATO Practitioner Advisory Group (ATPAG) on 27 February 2015 the ATO presented an item on GST verification activities. The group were provided with the latest information regarding the Activity Statement Refund Integrity program and feedback was sought on issues or concerns. The information provided included statistics around timelines of refunds released without revision.

    Who we consulted

    The Tax Institute, the Business Enterprise Centre Australia, professional associations represented on the GST Advisory Group and the Council of Small Business of Australia.

    Outcomes

    A response was issued to The Tax Institute on 21 April 2015 providing an overview of the verification procedures and statistics on refund released without revision.

    [201475] Audit insurance

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201474] Pre-issue compliance program correspondence

    Purpose

    To consult with the tax profession on implementation of recommendation 5.5 from the Inspector-General of Taxation’s review into the ‘ATO’s compliance approach to individual taxpayers – income tax refund integrity program’

    Description

    The ATO has provided examples of the main types of correspondence that may issue to taxpayers that are reviewed under our pre-issue compliance program. This correspondence is issued to the nominated postal service address as nominated by the taxpayer or their tax agent and meets published guidelines for service address.

    These letters have been tested for usability through the ATO’s simulation centre for the past three years and have been updated to incorporate feedback from these sessions, as well as direct feedback from taxpayers, tax agents and tax officers.

    The ongoing testing of these letters forms part of recommendations arising from a recent review of our refund integrity program of work.

    Who we consulted

    ATO Tax Practitioner Advisory Group

    Outcomes

    The ATO appreciates the feedback that it has received from members of the ATO Tax Practitioner Advisory Group in relation to the pre-issue compliance program correspondence.

    This feedback has now been considered and will result in a number of changes being made to these letters, including:

    • updating the delay letter to include a reference to discussing the letter with the client’s tax agent, if they used one to prepare their return.
    • using delay letters in limited circumstances during peak lodgment periods, otherwise issuing the audit notification letter in the first instance.

    The ATO has also confirmed that it only requests details of person who assisted in the preparation of the return and any associated fees in correspondence to self-preparers where involvement from an unregistered preparer is suspected.

    [201473] ATO guidelines when contacting clients of tax practitioners

    Purpose

    To revise of the guidelines for contacting clients of tax agents as published on the ATO website – Protocols for contacting you or your clients

    Description

    The ATO has identified a need to consider whether the current guidelines are appropriate to manage the use of contact channels proposed by the ATO.

    We aim to develop new guidelines for a digital environment which will result in potential change to the practitioners’ current business model/administrative practices.

    Who we consulted

    ATO Tax Practitioner Advisory Group.

    Outcomes

    There has been a significant shift towards delivery of a digital environment since this consultation commenced. As a result, the consultation is to be closed, and will become part of a broader piece of work that the ATO has commenced on preferencing, including address preferencing. We will engage with practitioners again when we are have established what it is possible to deliver through preferencing.

    [201472] Intermediaries correspondence report

    Purpose

    The initial consultation focused on the questions asked by members, the current report design and any modifications to the design of the report that may be possible.

    Further consultation is being undertaken to gain a thorough understanding of how practices manage their inbound correspondence from the ATO. This knowledge will assist us:

    • to shape future processes to ensure they are favourable for the end user
    • to understand the support strategies and communication needs to assist all tax practitioners transition within their practices.

     

    Description

    The ‘Transforming Enterprise Systems’ presentation at the ATO Tax Practitioner Advisory Group meeting on 22 August 2014 outlined the major technology changes the ATO will deploy over the next 12 months. The changes are:

    • aligning the client register in ATO systems
    • enabling whole of Government service delivery that allows for better integration/ connectivity across agencies for the community
    • aligning the client account in ATO enterprise systems.

    Members asked specific questions in relation to the Intermediaries Report function proposed for the Tax Agent Portal. The ATO agreed to consult further on the report’s current design, analyse the practicalities of the report and look at opportunities to influence the design before deployment in the Tax Agent Portal.

    Individual clients with a link to myGov will receive correspondence electronically in their myGov inbox regardless of whether there is a tax agent linked to their account. The ATO is developing an Intermediaries Report function available in the Tax Agent Portal for tax agents to be able to see correspondence issued directly to an individual’s myGov inbox.

    Who we consulted

    Tax practitioner members of the ATO Tax Practitioner Advisory Group.

    Outcomes

    Intermediaries report has been released.

    Monitoring of functions is continuing with a couple of agents to ensure minimal adverse impacts.

    [201471] Collection and use of sex/gender information by the superannuation industry

    Purpose

    Seek industry feedback on the need to continue collecting and reporting a member’s ‘sex’ information (male/female) to the ATO and others.

    Description

    Understand the extent to which the superannuation industry uses and needs ‘sex’ information for the management of member accounts, for locating lost super, transferring super between funds, and managing unclaimed super.

    Who we consulted

    Members of the Superannuation Administration Stakeholder Group

    Outcomes

    During the consultation, 15 responses were received from SASG members to the request for information about funds’ use of ATO sex/gender data.

    The feedback was very consistent, and is summarised below.

    • Funds do not use the sex data sent to them by the ATO.
    • Funds use sex data (presumably sourced from their new member registration) for insurance and pension calculations.
    • If the ATO were to transmit gender x (and potentially u) to funds, they would generally need 12 months to prepare. Any changes would be done with other specification/system updates.
    • Funds were overwhelmingly in favour of removing sex/gender data from USM reporting.
    • Only one member responded that they had a fund with an eligibility age of over 65, but they indicated that they didn’t see the need for sex data as part of USM reporting.

    The ATO will work to removing sex/gender identifiers from superannuation reporting requirements, where appropriate, by 1 July 2016.

    [201470] Effective life review of assets used in the professional photographic services industry

    Purpose

    To determine the effective life of assets used in the professional photographic services industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Various businesses and companies that operate in the professional photographic services industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the professional photographic services industry and consulted with appropriate industry participants between August 2014 and March 2015.

    The draft effective lives determinations were referred to an independent review panel held in May 2015. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2015.

    The new determinations will appear in TR 2015/2.

    [201469] Effective life review of assets in Table B of the Commissioner’s schedule

    Purpose

    To determine the effective life of assets in Table B of the Commissioner’s schedule.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Various businesses and companies that use or manufacture the relevant assets in Table B of the Commissioner’s schedule.

    Outcomes

    The ATO reviewed the effective life of certain assets in Table B of the Commissioner’s schedule and consulted with appropriate industry participants between August 2014 and March 2015.

    The draft effective lives determinations were referred to an independent review panel held in May 2015. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2015.

    The new determinations will appear in TR 2015/2.

    [201468] Effective life review of assets used in the other machinery and equipment repair and maintenance industry

    Purpose

    To determine the effective life of assets used in the other machinery and equipment repair and maintenance industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Various businesses and companies that operate in the other machinery and equipment repair and maintenance industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the other machinery and equipment repair and maintenance industry and consulted with appropriate industry participants between August 2014 and March 2015.

    The draft effective lives determinations were referred to an independent review panel held in May 2015. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2015.

    The new determinations will appear in TR 2015/2.

    [201467] Effective life review of assets used in the surveying and mapping services industry

    Purpose

    To determine the effective life of assets used in the surveying and mapping services industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Various businesses and companies that operate in the surveying and mapping services industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the surveying and mapping services industry and consulted with appropriate industry participants between August 2014 and March 2015.

    The draft effective lives determinations were referred to an independent review panel held in May 2015. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2015.

    The new determinations will appear in TR 2015/2.

    [201466] Effective life review of assets used in the waste services industry

    Purpose

    To determine the effective life of assets used in the waste services industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Various businesses and companies that operate in the waste services industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the waste services industry and consulted with appropriate industry participants between August 2014 and March 2015.

    The draft effective lives determinations were referred to an independent review panel held in May 2015. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2015.

    The new determinations will appear in TR 2015/2.

    [201465] Effective life review of assets used in the rigid and semi rigid polymer manufacturing industry

    Purpose

    To determine the effective life of assets used in the rigid and semi- rigid polymer manufacturing industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2015/42.

    Who we consulted

    Various businesses and companies that operate in the rigid and semi-rigid polymer manufacturing industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the rigid and semi-rigid polymer manufacturing industry and consulted with appropriate industry participants between August 2014 and March 2016.

    The draft effective lives determinations were referred to an independent review panel held in April 2016. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2016.

    The new determinations will appear in TR 2016/1.

    [201464] Effective life review of assets used in the coal seam gas extraction industry

    Purpose

    To determine the effective life of assets used in the coal seam gas extraction industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2014/4.

    Who we consulted

    Australian Petroleum Production and Exploration Association and various participants in the industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the coal seam gas extraction industry and consulted with appropriate industry participants between August 2014 and April 2016.

    The draft effective lives determinations were referred to an independent review panel held in April 2016. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2016.

    The new determinations will appear in TR 2016/1.

    [201463] Tax status of certain grape alcohol beverages

    Purpose

    To seek industry input on products that were originally derived from grape wine, but do not have the final appearance, taste and characteristics commonly associated with wine as the term is generally understood. Feedback will be used to develop an ATO view that is intended to provide clarity for industry and consolidate a number of existing ATOIDs.

    Description

    The central issue is whether particular production processes and methods result in a product that is properly classified as ‘grape wine’ as defined in the Wine Equalisation Tax Act 1999 (WET Act).

    A number of products have been identified that are subjected to more advanced filtration and processes and may be excisable and not classified as ‘grape wine’ or ‘grape wine product’.

    Who we consulted

    Winemakers’ Federation of Australia (WFA), Wine Grape Growers Association, Distilled Spirits Industry Council of Australia, Australian Distillers Association, Alcohol Stakeholder Group members, academia and entities and advisors that may have an interest in the issue.

    Outcomes

    The issue is not widespread and, as such, the ATO does not intend to issue a public ruling, but will continue with our existing approach of considering each product on a case-by-case basis on its particular merits.

    [201462] Excise (Blending Exemptions) Determination 2014 (No. 1)

    Purpose

    To consult on the draft Determination on fuel blending exemptions with relevant entities in the petroleum industry.

    Description

    The Excise (Blending Exemptions) Determination effectively exempts certain fuel blending activities from the excise regime. A new Determination has been created to remove the reference to specific brands of fuel additives for the purposes of the bulk fuel additives exemption. This has been done to make the exemption more equitable and accessible for new entrants.

    The ATO consulted with relevant entities in the petroleum industry to ensure that the new Determination would not cause any unintended outcomes. Those entities were provided with a draft of the determination and invited to provide any comments.

    Who we consulted

    Major downstream fuel suppliers, Treasury and the Australian Institute of Petroleum.

    Outcomes

    Through this consultation, the ATO was able to gain assurance that the new determination would not have any unintended consequences. A small number of minor comments were received however this did not translate into any need to alter the draft determination.

    [201461] Publishing risk factors for small-to-medium enterprises and wealthy individuals

    Purpose

    The ATO aims to create an environment of openness with taxpayers, providing greater transparency and certainty through information sharing regarding what risk factors it is looking at across the market.

    The purpose of the exercise is to consult on the usability of proposed web versions prior to publication.

    This also supports the ATO’s response to the Inspector-General of Taxation (IGT) recommendation from his October 2013 Review into aspects of the Australian Taxation Office’s use of compliance risk assessment toolsExternal Link

    Description

    We consulted through the following channels:

    • Part one – Let's talk webinar (2 October 2014)
    • Part two – online discussion board (3 – 17 October 2014).

    Due to time and resourcing constraints, participants will be notified in December that new content has been published and ongoing feedback will be collected through established web content management processes.

    Who we consulted

    Tax agents, in-house tax advisors and business owners from the Let’s Talk subscriber list -this list includes professional bodies, industry representatives, large accountancy firms, Tax Agent Visits program, and Family Business Australia.

    Outcomes

    We are refining the risks and indicators that attract our attention for small-to-medium enterprises and wealthy individuals for publication on the ATO website.

    A webinar was held on 2 October 2014 to seek feedback on the new format and method. Subscribers to the Let’s Talk list, specifically tax agents, in-house tax advisors and business owners were invited. The webinar presented and discussed a sample of the risk indicators to 115 participants.

    The online discussion board was available to all who registered and was open during 3-17 October 2014. The discussion board sought further comment on a larger list of risk indicators.

    Using feedback provided during the webinar, on the discussion board and through direct responses we are preparing the amended risk factors for publication on the ATO's website.

    [201460] Reporting of taxable government grants and other specified payments

    Purpose

    To consult with government entities and software developers on the design and implementation of the reporting of government grants and other payments with a view to minimising compliance costs.

    Description

    This Budget announcement seeks to introduce a formal reporting system for taxable government grants and other specified payments. This will allow the ATO to support taxpayers by providing income information to them in pre-filling, so assisting them to complete accurate tax returns. The information will also be used in our data-matching activities to better manage the risks of omitted income and non-lodgment of tax returns.

    Currently, the ATO uses general acquisition powers to obtain data from all levels of government on grants and payments. However, the data quality and timeliness of the receipt of the information are impeding the effective use of the data and the ability to readily match these to the relevant taxpayer. The introduction of a formal reporting system will improve and strengthen this existing reporting system.

    Who we consulted

    Federal, state and territory, and local government entities, including identified government business enterprises, government owned corporations and software developers.

    Outcomes

    ATO consultation with representatives from government entities and software developers has been undertaken. Information gathered from consultation has been provided to Treasury.

    On 15 October 2015, the Hon Kelly O’Dwyer MP, Assistant Treasurer and Minister for Small Business, introduced the Tax and Superannuation Laws Amendment (2015 Measures No. 5) Bill 2015 to Parliament. The Bill is now availableExternal Link.

    The ATO has contacted stakeholders who were involved in consultation or made a submission in response to the discussion paper and advised them of the introduction of the Bill to Parliament.

    [201459] ELS to SBR video and animation communication products

    Purpose

    To gain feedback on the video and animation communication products that are seeking to explain SBR and why the ATO is moving towards SBR-enabled technology and how this will affect tax practitioners.

    The intent of the consultation is to understand what resonates with tax practitioners and software developers and to assist in the development of future communication products for the transition from ELS to SBR.

    Description

    The consultation is with selected tax practitioners and software developers to provide feedback on two communication products, providing an overview of what SBR is to tax practitioners, explaining why the ATO is moving towards SBR-enabled technology, and how this will affect tax practitioners.

    Who we consulted

    Selected software developers and tax practitioners.

    Outcomes

    200 tax practitioners were invited to participate and an invitation was sent out to software developers through the Software Industry Liaison Unit (SILU) and 20 software developers expressed their interest.

    The extension of the consultation was also to allow for tax agents who participated in the Reinventing the ATO co-design sessions an opportunity to provide feedback

    The consultation was supported with an article featured on the tax practitioner news and updates, an email direct to professional associations and a link to the article via the SILU webpage.

    Overall the consultation received good feedback, with one particular feedback stating “very clear, constructive and informative and a good summary.”

    The breakdown of feedback received included:

    • 12% very positive
    • 43% positive
    • 32% neutral
    • 13% negative.

    Respondents to the consultation acknowledged the two communication products and the different styles and are subjective in terms of preference as well as level of understanding and profession.    

    [201458] Compliance in focus replacement product

    Purpose

    To seek input on our draft strategy to inform various market segments of the new and emerging compliance risks we identified and seek the views of consultation participants on the preferred timing and channel of messaging throughout the year.

    Description

    This year, we will not publish Compliance in focus in its current format while we review the best way to inform various market segments of the new and emerging compliance risks we identify. This includes looking at ways to target information towards specific market segments and provide information throughout the year.

    Who we consulted

    Tax professionals who are representative of a broad range of market segments including individuals, small and large business, private groups and superannuation funds.

    Outcomes

    Members of the tax profession participated in a discussion on the proposed replacement strategy for Compliance in focus on 5 August 2014.

    The feedback and views of the participants will be considered and incorporated into our strategy as appropriate. We will work with existing consultation groups, such as the ATO Tax Practitioner Advisory Group, or from members of the group, if further consultation is required.

    [201457] Superannuation contributions gainfully employed part time

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201456] Improving the private groups and wealthy individuals client experience

    Purpose

    To co-design and consult on initiatives to improve the client experience for privately owned and wealthy groups.

    User testing for content for a web based online resource for the privately owned and wealthy groups.

    Description

    To improve the client experience for private groups and wealthy individuals.

    Co-design and user test improvement initiatives particularly in relation to engagement, transparency, certainty and intermediaries.

    Who we consulted

    Tax advisers and practitioners who represent privately owned and wealthy groups, tax associations including Chartered Accountants Australia & New Zealand, The Tax Institute and CPA Australia, representatives of the SMSF Association, Family Business Australia and the Law Council of Australia.

    Outcomes

    Providing a way for representatives of key stakeholders in this segment to present their views and creating a way to continue to connect with this segment on a regular basis through the establishment of the Private Groups Stakeholder Group.

    [201455] Insolvency workshops

    Purpose

    Work with insolvency practitioners to streamline, develop and implement new products and processes to enhance practitioner’s interactions.

    Description

    The ATO and ARITA are working closely to ensure that it is easy for insolvency practitioners to fulfil their obligations through convenient and accessible services that meet the changing expectations of government and the community.

    The ATO’s intent is to provide a contemporary and tailored service, simplifying interactions, maximising automation and reducing costs.

    A shift towards electronic interactions will provide benefits to clients and to government, while also reducing negative impacts on the environment.

    There are a range of channels that already support this shift – this includes our agent and business portals, as well as Standard Business Reporting (SBR). We aim to:

    • increase the uptake of practitioners interacting with us electronically
    • reduce practitioners using white mail in their interactions with the ATO
    • identify those processes which can be streamlined and offered via an electronic platform.

     

    Who we consulted

    Insolvency practitioners (both members of ARITA and also non-members who have expressed an interest in consultation activities).

    Outcomes

    In early November 2014 we held our first insolvency workshop in Sydney. The aim was to consult with insolvency practitioners, on the following topics:

    • increase electronic interaction between the industry and the ATO
    • day 1 notifications and requests for documents.

    Insolvency practitioners told us they:

    • would like to use electronic channels when communicating with the ATO
    • require further support in making the transition to using the Business Portal
    • look forward to being actively involved in future collaborative sessions to improve how we administer insolvent accounts.

    The following items have progressed as a result of consultation:

    • secure messaging service via the Business Portal.
    • education visits to assist practitioners in transitioning to the Business Portal.
    • exploring opportunities for integration of insolvency practitioner software and ATO systems.

     

    [201454] Review of the ATO pre-lodgment compliance review product

    Purpose

    To propose and discuss improvements to the PCR product

    Description

    The ATO is considering changes in our approach to pre-lodgment compliance reviews to better meet the needs of businesses and the ATO.

    Who we consulted

    Members of the Large Business Liaison Group and the Corporate Tax Association.

    Outcomes

    Additional consultation may occur to address additional issues. Agreed design for reinvented PCR is being implemented.

    [201453] TOFA and interest withholding tax

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201452] Limited recourse borrowing arrangements and non-arm’s length Income

    Purpose

    Discuss private ruling concerns over limited recourse borrowing arrangements (LRBA) and non arms-length income (NALI)

    Description

    The Superannuation Industry Relationship Network Meeting was held on the 29 May 2014.

    The scope of the discussion was to consult on LRBA and NALI, and any related ATO administrative matters, on the theme: with the question being ‘What are the regulatory and income tax consequences of limited recourse loan arrangements where the loan is charged at low or zero interest?’

    Members were advised that any policy matters that were raised would be noted, but were outside the scope of the meeting.

    Who we consulted

    Representatives of the SMSF industry.

    Outcomes

    The ATO agreed to review the ATO’s position on the public ruling approach.

    [201451] Guidance for the Foreign Account Tax Compliance Act (FATCA)

    Purpose

    To identify further issues that industry are seeking to be addressed via the guidance product.

    Australian financial institutions need to be aware of the impacts of FATCA and their obligations.

    Description

    To share the ATO guidance to a broad audience in a timely manner and create awareness about the new requirements financial institutions will have.

    A broad range of Australian financial institutions are affected, including banks, some building societies, some credit unions, specified life insurance companies, private equity funds, managed funds, exchange traded funds, some trusts and some brokers.

    The guidance is placed on the Let’s Talk and will later be published on our website.

    A number of industry associations have already been consulted on the draft. We are hoping by using Let’s Talk we can reach an even broader audience.

    Who we consulted

    Professional associations and industry body representatives including the Australian Bankers' Association, Financial Services Council, Australian Financial Markets Association, Stockbrokers Association of Australia, Property Council of Australia, large law and accountancy firms and interested members of the general public.

    Outcomes

    A number of issues have been raised with regard to v2.0 of the guidance documentation. We are currently working through these issues and will seek to address them in v3.0 of the guidance documentation.

    [201450] Guidance on administration of penalty for failure to provide a document as required

    Purpose

    The draft practice statement has been published on our website inviting anyone with comments to advise us, so that they are considered for the final version of the practice statement.

    Description

    The draft includes proposed guidance on the administration and remission of penalties for failing to lodge a document as required. This penalty is 75% of the tax-related liability that is raised during an audit when the document, such as a tax return or activity statement, is not lodged by the taxpayer.

    Who we consulted

    The draft practice statement has been published on ato.gov.au inviting comments.

    Outcomes

    Draft practice statement PS LA 2014/4 was published on 26 June 2014 seeking feedback on the draft.

    Consultation has occurred, and the comments were considered in drafting the practice statement.

    [201449] Effective life review of assets used in the postal services industry

    Purpose

    To determine the effective life of assets used in the postal services industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997.

    The effective lives determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2015/2.

    Who we consulted

    Various businesses and companies that operate in the postal services industry.

    Outcomes

    The ATO reviewed the effective life of assets used in the postal services industry and consulted with appropriate industry participants between August 2014 and March 2016.

    The draft effective lives determinations were referred to an independent review panel held in April 2016. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. The recommendations were approved, and the effective life determinations will apply to assets purchased on or after 1 July 2016.

    The new determinations will appear in TR 2016/1.

    [201448] ABN entities not registered for GST who charge GST on invoices

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201447] Guidance on deductibility of accrued expenses

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201446] Ancillary fund return online consultation

    Purpose

    To reduce red tape related to data collection in the annual information return from ancillary funds.

    Description

    The ancillary fund return contains a list of detailed questions to obtain information and data to confirm regulatory requirements have been met and for compliance risk identification.

    Specific issues for discussion include whether the questions, make sense and achieve the goal and are there unnecessary compliance costs incurred by the sector to answer the questions?

    Who we consulted

    NFP Advisory Group members, ancillary fund trustees, tax practitioners who complete and lodge the form for ancillary funds.

    Outcomes

    Written feedback received from two practitioners, one of which is recognised within the not-for-profit (NFP) sector as leading legal expert in charitable law. 

    NFP Advisory Group members at their 30 July 2014 meeting also provided verbal feedback on improvements to the form. All the feedback was valuable and will be incorporated into the 2016 Tax Time business case. The return changes will require ATO IT systems to be updated.

    [201445] Superannuation excess contributions tax – contributions reserving

    Purpose

    To discuss the concerns raised by The Tax Institute about the requirement for members to have to object to assessments raised in error due to the limitations of information reported to the ATO by funds.

    Description

    TD 2013/22 and ATO ID 2012/16 indicate that, when calculating a person's concessional contributions under section 292-25 of the Income Tax Assessment Act 1997 (ITAA 1997), a concessional contribution made to a superannuation fund in one financial year but allocated to the member under reg. 292-25.01of the Income Tax Assessment Regulations 1997 (ITAR) with effect in the subsequent financial year, can be counted as a concessional contribution in the latter.

    Who we consulted

    The Tax Institute.

    Outcomes

    Feedback received from SIRN members has been incorporated in the revised form. The final version is now undergoing clearances prior to being published on our website.

    [201444] Superannuation Guarantee payments for defined benefits after 30 years' service

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201443] Permanent establishment - secondment arrangements

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201442] Small business newsroom

    Purpose

    To provide an enhanced version of the small business newsroom.

    Description

    The ATO will make improvements to the newsroom based on available technology and user requirements.

    Who we consulted

    Small business stakeholders and small business operators

    Outcomes

    Research and design resulting from post-launch collaboration with small business stakeholders has concluded for Phase 2 enhancements which will be implemented later in the calendar year.

    User consultation with industry representatives and small business will continue and future enhancements to the small business newsroom will be made based on this consultation.

    [201441] Appropriate minimum residual values for finance leases of cars

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201440] Obtaining TFN's for people with intellectual disabilities

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201439] GST treatment of motor vehicle incentive payments

    Purpose

    To consult with motor vehicle industry stakeholders on issues arising from AP Group Ltd v Commissioner of Taxation [2013] FCAFC 105.

    Description

    To provide guidance on the GST treatment of motor vehicle incentive payments and address any implementation issues.

    Who we consulted

    Motor vehicle industry stakeholders, including the FCAI, AMIF and the VACC

    Outcomes

    On 1 October 2014, the ATO published GSTR 2014/1 Goods and Service Tax: motor vehicle incentive payments. The ruling takes into account feedback and suggestions from industry stakeholders.

    A legislative instrument was published commencing 1 May 2014, waiving the requirement for the purchaser to hold a tax invoice where the motor vehicle incentive payment made by the manufacturer/distributor is part of the consideration for the sale of the car to the customer.

    [201438] Standard Distribution Statement and AIIR

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201437] Improving the income tax objection process

    Purpose

    Provide information that will make it easier for tax practitioners to lodge objections with the full information required to reduce delays and to assist better and more-timely decisions.

    Description

    ATO has identified a number of practices that are causing re-work and delays in responding to objections. Best practice is to lodge objections via the Tax Agent Portal and to provide all relevant information available to support the taxpayers’ claims at the time of lodgment.

    ATO is also seeking feedback about preferred methods of responding, either by letter, phone call, or tax agent portal; and how particular client behaviour can be influenced to either reduce the numbers of objections lodged or to reduce the time needed to resolve the matters in dispute.

    Who we consulted

    Tax practitioners, including representatives of tax and accounting professional associations and members of the ATO Tax Practitioner Advisory Group.

    Outcomes

    ATO practices to move to more personal contact with agents in discussing either further requirements or the outcomes of objections. Tax agents provided with more easily accessed web information that will identify the necessary supporting substantiation.

    [201436] Deductibility of costs incurred to set up a Limited Recourse Borrowing Arrangement

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201435] Variation of PAYG instalments

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201434] Business viability assessment tool (BVAT)

    Purpose

    To explore the concept of BVAT Integrated Software and gather different perspectives on co-design options.

    Description

    The ATO vision is to extract (using a web service activated by the taxpayer) financial information directly from the user's software, so enabling the fully automated generation of a business viability assessment report.

    Enabling the automatic generation of BVAT reports in this way will eliminate the need for users with integrated BVAT software to re-produce and transmit to the ATO their (often voluminous) hard copy financial statements when seeking to negotiate repayment of a debt with the ATO.

    The BVAT would also be available to software users who don’t have a tax debt to self-assess their financial position and support making better informed financial decisions.

    Consultation will focus on:

    • feasibility of proposed approach
    • design options
    • understanding benefits to software users, accounting software providers and the ATO.

     

    Who we consulted

    Accounting software providers.

    Outcomes

    There are a number of complementary ATO initiatives being progressed that will influence the BVAT Integrated Software design and build. In light of this, consideration is being given to when and how this project should move forward. This will be reviewed in the 2015–16 financial year.

    [201433] Application of Division 230 (TOFA provisions) to securitisation transactions

    Purpose

    To consult on the application of TOFA provisions in Division 230 of the Income Tax Assessment Act 1997 to securitisation transactions.

    Description

    A securitisation example was included in Case Study 4 in the Explanatory Memorandum (EM) to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009). Industry members have sought further clarification.

    Industry members have asked the ATO to prepare guidance to address the application of the TOFA provisions to securitisation transactions in more detail than Case Study 4 in the EM.

    Who we consulted

    Tax practitioners and legal, accounting and banking industry representatives.

    Outcomes

    The ATO will issue guidance on this matter.

    [201432] Administrative approach to income tax transfer pricing and customs duty

    Purpose

    To assist the ATO and Australian Customs and Border Protection Service to identify issues at the intersection of income tax transfer pricing and customs duty administration that require a coordinated, ‘whole of government’ approach to improve taxpayer outcomes.

    Description

    The report of the Senate Economics Legislation Committee of May 2013 from their enquiry into the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 recommended this consultation be undertaken. That Bill introduced new transfer pricing rules in Division 815.

    There are a number of potential administrative mismatches in customs duty and income tax (though the Senate Committee also noted that this is not a new issue caused by the new laws). The task of this consultative group is to identify areas of concern common to both agencies and ways in which these may be reduced or eliminated.

    Who we consulted

    Representatives of the Federal Chamber of Automotive Industries, the Customs Brokers and Forwarders Council of Australia, and additional members of the professions with relevant tax and customs experience.

    Outcomes

    A draft PSLA was provided to the members at the 21 August 2015 meeting for comment by 4 September 2015. The minutes of the 21 August meeting will be published on the ATO website.

    The work of this group is now complete and the PSLA will be finalised through the Division 815 Working Group.

    PSLA to be published outlining how a transfer pricing audit adjustment can be attributed to the various P&L components, especially dutiable imports. This will assist the Australian Border Force in correcting customs valuations to arm’s length amounts and enable taxpayers to receive duty refunds where appropriate.

    [201431] Settlement code

    Purpose

    Seek feedback from externals on the proposed new Code of Settlement

    Description

    Consistent with the reinvention of the ATO and an objective to reduce red tape, the ATO’s Code of Settlement (‘the code’) is being rewritten.

    The new code is significantly shorter – two pages, reduced from 45 pages. We have condensed the current two paragraphs that outline the circumstances where it would be generally inappropriate to settle, and appropriate to settle, into a single section on ‘What to consider’, which assists when deciding whether or not to settle.

    It includes our approach to litigation, factors that should be considered in deciding whether or not to settle, the responsibilities of the parties, and the requirements of a settlement deed.

    Who we consulted

    The Legal practitioners Round Table and the Dispute Resolution Working Group

    Outcomes

    Feedback has been received from stakeholders during July and August 2014. The new Code of settlement was released in October 2014.

    [201430] Definition of commercial residential premises for GST purposes

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201429] Share capital tainting - accounting for employee share schemes

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201428] Financial supplies guidance products

    Purpose

    To increase the ATO’s understanding of the ability of financial services industry members to practically apply and administer proposed ‘tests’ contained within a Draft Goods and Services Tax Ruling and a Draft Goods and Services Tax Determination, which were intended to be published.

    This consultation will influence whether those proposed tests need to be further developed or whether alternative methods may be required.

    Description

    The following GST guidance products were intended to be published:

    • a Draft GST Ruling (GSTR) dealing with treatments of foreign exchange products
    • a Draft GST Determination (GSTD) dealing with treatments of supplies of brokerage services involving overseas securities or futures.

    Each of these proposed products contains ‘tests’ which taxpayers may use to determine whether the particular supplies are GST free.

    The ATO commenced engagement with industry to determine whether those tests can be practically applied and administered by the industry members.

    Who we consulted

    The Australian Bankers' Association (ABA) and the Australian Financial Markets Association (AFMA).

    Outcomes

    The ATO has consulted with the industry about the practicalities of its initial draft views from a compliance perspective and has further developed its technical positions in accordance with the outcomes and feedback of the consultation. Products impacted include:

    • Draft GSTR: GST: foreign currency products and GST-free supplies in relation to rights for use outside Australia. We are continuing to develop the ATO view in terms of our increased understanding of the issues faced by the industry.
    • Draft GSTD 2014/D4: GST: is the supply of brokerage services that facilitates the sale or purchase of financial products on overseas securities or futures exchanges, a GST-free supply under paragraph (a) of item 4 in the table in ss38-190(1) of the GST Act was published on 29 October 2014.

    Consultation with the industry bodies confirmed that affected taxpayers would be unable to reasonably comply with certain aspects of initial technical positions proposed by the ATO.

    The ATO positions have been further developed in consideration of the information available to affected taxpayers to ensure that they are able to practically comply with the ATO views.

    The amended technical positions will be published in draft form and will be subject to public comment.

    [201427] Australian tax treatment of Bitcoin and other crypto currencies

    Purpose

    To seek input from a business community perspective about the impacts of differing taxation treatments of Bitcoin and other crypto currencies on the Australian business community.

    Description

    Industry representatives from professional and Bitcoin associations, and leading businesses involved in the emerging Bitcoin community, met on 29 April 2014. Attendees provided valuable information about their business models and how different tax treatments would impact their clients, members and businesses.

    Who we consulted

    Industry representatives from profession and Bitcoin associations.

    Outcomes

    The group provided valuable feedback on ATO propositions that have been part of our deliberations for an Australian position on this tax treatment. We have sought further advice from external legal counsel, which has delayed the release of the guidance paper. It remains our priority to provide the community with the final guidance paper in time for people to complete their 2013–14 income tax returns. The key information that a taxpayer will need about each transaction or event with Bitcoin is the date, the amount in $A, what it was for, and who the other party was (their Bitcoin address, at a minimum).

    [201426] Guidance on the administrative treatment of taxpayers affected by discontinued announced legislative measures

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201425] Application of section 47A of the Income Tax Assessment Act 1936

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201424] ATO compliance action on dividend washing

    Purpose

    To consult on ATO compliance action in relation to dividend washing.

    Description

    Following a media release in October 2013 alerting taxpayers that the ATO does not consider dividend washing arrangements to be allowable at law, the ATO released draft TD 2014/D1 on 15 January 2014, and has commenced compliance action via a targeted issue of letters to approximately 3,000 taxpayers.

    Who we consulted

    In response to concerns expressed by a number of stakeholders, the ATO consulted with tax, accounting and legal professional associations via a meeting on 31 March 2014.

    Outcomes

    Stakeholders expressed a number of concerns in relation to the ATO’s compliance action, including the timing of the compliance activity prior to the finalisation of the draft taxation determination, whether the draft taxation determination was retrospective, and the consistency of the ATO’s approach with draft legislation recently released by Treasury. 

    We noted that since dividend washing came to our attention in early 2013, we have been of the view that Part IVA applies to the vast majority of cases. We are also of the view that this position is consistent with the government’s announcement and proposed legislative approachExternal Link

    We advised that we considered all submissions to the draft tax determination, and the final determination is not expected to differ markedly from the draft. This consideration occurred prior to the issue of letters.

    In recognition of the concerns expressed by stakeholders, we have agreed to extend the time in which taxpayers can self-amend without penalty until four weeks after finalisation of TD 2014/D1. Further details are available here

    [201423] Identifying potential continuing professional development (CPD) topics for legal practitioners

    Purpose

    To identify CPD topics for legal practitioners to better understand the tax system and the mutual obligations of practitioners and the ATO.

    Description

    We held a roundtable meeting with the legal profession, represented by all state and territory bodies, on 4 February 2014 to discuss various aspects of the relationship and to how to maintain an ongoing dialogue.

    A proposal was made for the ATO to provide information sessions on both technical and non-technical issues to assist the legal profession understand their tax obligations through CPD education.

    A working group was established and met on 14 February 2014.

    Who we consulted

    A working group established from Legal Practitioners Round Table membership.

    Outcomes

    Topics identified include:

    • how to navigate the ATO legal database
    • access powers and legal professional privilege
    • trust structures and the legal profession
    • ATO approach to debt recovery.

     

    [201422] Deductibility of commercial website expenditure

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201421] Reducing regulation and red tape

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201420] Clarification of the requirements of a valid notice issued by the Commissioner of Taxation

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201419] Potential double taxation - CGT Event E4 and ATO ID 2012/63

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201418] ABN POI (proof of identity) requirements for non-individual entities non-resident associate issues

    Purpose

    To consult on, and discuss, alternative ABN POI requirements for non-individual entities non-resident associates, where a lesser risk is identified.

    Description

    ABN POI requirements were changed in December 2013 to help increase the integrity of the ABR, as well as helping mitigate risks around phoenix activities and organised crime issues.

    Who we consulted

    Tax practices, The Tax Institute, and the Chartered Accountants Australia and New Zealand (CAANZ).

    Outcomes

    Reduced POI requirements have been introduced for non-resident ABN registrants. The new arrangements support increased integrity of data on the Australian Business Register whilst reducing the burden on business. Website updates are underway to reflect the new procedures and to advise the support channels available.

    [201417] Subsection 12-H withholding and custodians

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    [201416] The ATO’s proposed statement of approach to electronic service delivery

    Purpose

    To gather feedback on the ATO’s proposed statement of approach to electronic service delivery over the next three to five years.

    Description

    The statement sets out what the ATO intends to achieve and how it intends to achieve it, with the aim of assisting the software and tax agent community to position their own strategies and business approaches.

    The statement is used as the basis of speeches presented at software developer and tax practitioner conferences, as well as discussions with consultation groups and individual businesses.

    Who we consulted

    Industry, tax practitioners, tax and accounting profession association representatives and software developers.

    Outcomes

    The consultation has been successful to inform elements of the ATO’s Digital Service Strategy that are important to industry, tax practitioners, tax and accounting profession association representatives and software developers.

    These learnings are being incorporated into ongoing plans for the provision of future digital experiences for all parts of the community

    Based on the ATO’s commitment to partnerships, it is recognised that ongoing consultation, engagement and co-design will be essential to ensure success as the ATOs Digital Service Strategy and available enabling technology evolves

    [201415] Tailored Business Returns project – consultation with software developers and tax practitioners

    Purpose

    The purpose of our consultation with software developers was to make them aware of proposed changes to the Company and Partnership tax returns to be implemented for Tax Time 2015. Additionally further changes were proposed in Tax Time 2016 that will impact Business Individuals and Trust reporting. Software developers are key external stakeholders, and we are seeking their design input and support.

    Description

    At each of the meetings held to date, details of the design of the outcomes for delivery in Tax Time 2015 were, and we sought software developer input and support. Whilst our initial consultations with the software industry were supportive of the overall objectives, recent consultations have indicated that the 2015 simplified returns were not a priority for the industry whilst other issues needed addressing.

    Who we consulted

    Software developer representatives through the Software Industry Partnership Office (SIPO).

    Outcomes

    Consultation with the tax practitioner and software industry groups supported the withdrawal of the simplified company and partnership tax returns for 2015. The remaining deliverables earmarked for 2016 (Deceased Estate Trusts and a modified Business and Professional Items Schedule) are still under development pending the approval of the Release Candidate. These initiatives will be incorporated into the work of the Improving the Business Experience Working Group.

    [201414] Australian custodians’ tax return obligations in respect of trustee liabilities under section 98 of the ITAA 1936

    Purpose

    To consult with industry in response to ACSA submission concerning the lodgment of income tax returns for custodial trustees with income tax liability under section 98 of the Income Tax Assessment Act 1936 (ITAA 1936).

    Description

    Section 98 of ITAA 1936 imposes income tax obligations on the trustee of a trust estate where distributions are made to non-resident beneficiaries.

    PSLA 2000/2 notifies an exemption for trustees of 'Transparent Trusts' from the requirement to furnish a tax return on behalf of the trust estate. However, this exemption does not extend to a trustee for any income year in which the trustee is liable to pay tax under sections 98, 99 or 99A of the ITAA 1936.

    ACSA requested clarification of whether an income tax return is required for each trust relationship comprising a non-resident beneficiary and the custodian, including where an Australian resident is acting as custodian for a related non-resident custodian trustee who is investing in Australia as trustee for a large number of non-resident investors.

    ACSA members have raised concerns with having to apply for multiple TFNs (tax file numbers), lodge multiple returns and having to administer trustee income tax obligations every year for each non-resident investor.

    Who we consulted

    ACSA members

    Outcomes

    Discussions were held with Australian Custodial Services Association (ACSA) members to discuss their concerns and issues in relation to lodgment of custodian trustee returns for multiple non-resident investors.

    On 28 May 2014, ACSA members were invited to comment on a proposal which involves custodians lodging a single return with sufficient information to enable multiple assessments to be issued in recognition of potential multiple trust estates under global custodian arrangements. The proposal provides streamlined lodgment and processing procedures to reduce compliance costs and simplify collection of custodians’ section 98 liabilities.

    On 3 September 2014, ACSA responded to the ATO’s proposal. Further actions were undertaken to follow up on additional questions raised by ASCA members. The consultation has been completed with general acceptance by the custodian industry. The proposal is ready to be implemented.

    A tailored solution to cater for ACSA members’ particular circumstances was concluded.

    Broadly, the solution requires the lodgment of a single trust return with sufficient information to enable multiple assessments to be issued. The proposal achieves significant cost savings for both the ATO and ACSA members. Global custodian arrangements can involve a large number of trust estates and in the absence of a tailored solution, each investor account established by the custodian may be regarded as a separate trust for which the trustee needs to lodge a separate return.

    [201413] Taxation exemptions for foreign governments (Sovereign Immunity)

    Purpose

    The Assistant Treasurer announcedExternal Link on 14 December 2013 that the government will not continue with the measure to codify the tax treatment of sovereign investments. In light of this, the ATO will be consulting with stakeholders with a view to issuing general guidance on how the ATO’s practice of exempting certain income applies to various scenarios.

    Who we consulted

    Taxpayers and representatives who responded to the 2011 Treasury consultation process on sovereign immunity, or who otherwise have had a significant exposure to foreign government investment tax issues.

    Outcomes

    A phone hook-up with taxpayers and representatives occurred on 6 March 2014. Subsequently, the taxpayers and representatives provided examples of guidance required. A further hook-up was held on 28 May 2014 to obtain input on a guidance document drafted by the ATO.

    The guidance document has now been published.

    [201412] - Wine equalisation tax (WET) earlier producer rebate

    Purpose

    To consult broadly with participants in the wine industry to determine the scope of the problems, how the industry is currently dealing with them and possible solutions.

    Description

    Since 10 December 2012, Section 19-17 requires wine producers who use wine from other producers in manufacturing their wine to take account of ‘earlier producer rebates’ in calculating their producer rebate. Some feedback from participants in the wine industry has indicated that there are practical difficulties in doing this.

    Who we consulted

    National and state wine associations and tax professionals.

    Outcomes

    A discussion paper with focusing questions was circulated on 29 January 2014, with responses requested by 28 February 2014. Responses have been examined and did not reveal a widespread problem.

    No further action is needed at this time.

    [201411] Accounting data-based case selection

    Purpose

    Explore the concept of obtaining standardised accounting data from business taxpayers to improve compliance case selection.

    Description

    Business taxpayers would provide the ATO with regular sets of accounting data at times that suit their systems. This data would be used to target casework more precisely, saving taxpayers costly follow-up information requests.

    The consultation will focus on the feasibility of this approach, the benefits to taxpayers and the ATO, and the technological and regulatory framework required.

    Who we consulted

    Taxpayers, professional bodies, software providers and tax practitioners, including representatives of tax and accounting profession associations.

    Outcomes

    Issues, blockers and opportunities identified, and strategies to address them in the pilot phase.

    [201410] Streamlined tax return systems

    Purpose

    To bring together a range of perspectives and expertise to identify opportunities and advise the ATO on moving toward a low touch / no touch system for individual taxpayers, particularly those with simpler income tax affairs.

    Description

    The ATO agreed to consult with the tax profession about how to move toward a low-touch / no-touch tax system for individual taxpayers at the 12 December 2013 National Tax Liaison Group (NTLG) Meeting.

    Who we consulted

    Tax professionals through their representative associations

    Outcomes

    The work of this group will be progressed as part of other consultation activities, such as Reinventing the ATO, and work being undertaken by the ATO Tax Practitioner Advisory Group following on from the June 2014 National Tax Practitioners (Drivers for Change) conference.

    [201409] Review of the effective life of assets used in the scientific, medical and pharmaceutical research industry

    Purpose

    To determine the effective life of assets used by the scientific, medical and pharmaceutical research industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the ITAA 1997.

    The effective life determinations will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2013/4.

    Who we consulted

    Medicines Australia, Generic Medicines, Association of Australian Medical Research Institutes, Science Industry Australian Ltd and/or members of these associations. Various companies and institutions that operate in the scientific medical and pharmaceutical research industry.

    Outcomes

    The draft effective lives determined will be referred to an independent review panel expected to be held in late April 2014. The review panel checks the review process and to confirm that the level of industry consultation was appropriate. If approved, the effective life determinations will be expected to apply to assets purchased on or after 1 July 2014.

    [201408] Review of the effective life of assets used in the ready-mix concrete manufacturing industry

    Purpose

    To determine the effective life of assets used in the ready-mix concrete manufacturing industry.

    Description

    The Commissioner may make determinations of the effective life of depreciating assets under section 40-100 of the ITAA 1997.

    The effective lives determined will be used to update and expand the effective life schedule attached to Taxation Ruling TR 2013/4.

    Who we consulted

    Cement Concrete and Aggregates Australia, and other participants in the industry.

    Outcomes

    A draft of the effective life determined for each of the various assets will be referred to an independent review panel expected to be held in April 2014. The panel will check the review process and confirm whether the level of industry consultation was appropriate. If approved, we expect the effective life determinations to apply to assets purchased on or after 1 July 2014.

    [201407] Offshore voluntary disclosure initiative

    Purpose

    To develop materials and processes required for voluntary disclosures.

    Description

    To provide input into the terms and administration of a new initiative and provide insights into factors likely to impact on its success.

    Who we consulted

    We have consulted with a small group of tax advisers and industry professionals, and have also engaged industry associations and the Inspector-General of Taxation.

    Outcomes

    A media release announcing the launch of Project DO IT and accompanying information were published on our website on 27 March 2014.

    [201406] The GST law relating to tax invoices and the use of estimations to calculate claims for GST input tax credits

    Purpose

    A review was undertaken to ascertain the views and practices of large accounting firms regarding the GST law relating to tax invoices and the use of estimations to calculate claims for input tax credits.

    Description

    Two large accounting firms are offering input tax credit (ITC) estimation products to large clients who do not process all tax invoices received for a tax period by the time their activity statement for a particular period is lodged.

    The estimation uses historical data to calculate the likely amount of credits relating to tax invoices that are estimated to be held, but not processed in an accounting system. The taxpayer’s claim is then increased by this estimated amount.

    Who we consulted

    Large accounting firms.

    Outcomes

    The review considered the administrative impacts and relative risks associated with the GST law relating to tax invoices and the use of estimations to calculate claims for input tax credits.

    The review affirmed the ATO’s previous position that it does not endorse input tax credit estimation methodologies and that, to be entitled to an input tax credit, a taxpayer must hold a valid tax invoice.

    The use of an estimator should not lead to a ‘set and forget’ mindset by relying solely on such estimators and neglecting adequate governance arrangements. This is particularly important where there are major events or seasonal variations that affect business transactions and performance.

    [201405] Apportionment of PRRT payments for procured services

    Purpose

    To provide guidance on apportionment of PRRT payments for procured services.

    Description

    Legislative amendments were passed on 29 June 2013 to provide certainty to the industry following the Full Federal Court’s decision in Esso Australia Resources Pty Ltd v. Commissioner of Taxation 2012.

    The amendments:

    • ensure taxpayers can deduct expenditure incurred under contract for project services or operations where the taxpayer is unrelated to the contractor.
    • preserve the requirement to look through arrangements in circumstances where the taxpayer contracts with a related entity (for instance, a group company) or with an operationally related entity (for instance, a joint venture participant or its related entities).

    This is consistent with the policy intent and the ATO’s past administrative practice.

    Who we consulted

    Industry and the tax profession, through the Resource Rent Tax working group.

    Outcomes

    Guidance has been published covering:

    • when it may be necessary to apportion a payment made by a taxpayer to another entity to procure the carrying on or providing of project activities
    • practices that may assist in the apportionment of that payment.

     

    [201404] Feasibility and potential operation of statutory remedial powers for the Commissioner of Taxation

    Purpose

    The working group examined the feasibility and potential scope of operation of a statutory remedial power (SRP) for the Commissioner of Taxation to address technical deficiencies in the law in a manner that is favourable to the taxpayer. A working group comprising the ATO, Treasury, and representatives of tax, accounting and legal profession associations, was formed.

    Description

    A number of professional bodies have suggested that an SRP for the Commissioner of Taxation be considered as part of the broader consultation on systemic solutions to address and prevent build-up of announced but un-enacted tax and superannuation measures in relation to technical defects in the law.

    Who we consulted

    Treasury and representatives of tax, accounting and legal profession associations.

    Outcomes

    Meetings of a tripartite, limited-life working group were held on 21 February 2014, 12 and 21 March 2014.

    The working group has produced a joint statement of intent about what is trying to be achieved with any proposal for such a power. This proposal for a statutory remedial power can be summarised as follows:

    The Commissioner may vary the law (in favour of the taxpayer) in circumstances where the application of the law:

    • produces outcomes which appear to be inconsistent with the reasonably ascertainable policy intent of the law, which may include situations where or it is reasonably clear that particular arrangements or transactions were not contemplated at the time of the policy development or the drafting of the law, or
    • results in compliance costs on taxpayers that are unnecessary or disproportionate – this can occur to achieve the reasonably ascertainable broader policy intent of the law, where those costs can be relieved in a way that is consistent with that intent.

    The ATO is now working with Treasury to put a proposal to the government to progress this concept.

    The working group’s joint statement of intent has been finalised. Note: the paper has been prepared by the ATO and Treasury as a summary of those agencies’ understanding of the broad consensus reached by the working group on the nature of the problem that an SRP would be aimed at resolving, and how an SRP may be implemented in practice. It does not set out the pros and cons of an SRP, but is intended to assist Treasury in providing advice to government on this issue.

    The paper does not necessarily reflect agreement by any member of the working group that an SRP, or an SRP of the kind discussed in the paper, should be implemented. Any decision to provide such a power to the Commissioner of Taxation is a matter for government.

    On 1 May 2015, the Assistant Treasurer released a media releaseExternal Link.

    [201403] In what circumstance is an asset of a complying superannuation fund a segregated current pension asset?

    Purpose

    To seek views on the then draft Taxation Determination TD 2013/D7. The draft explained the Commissioner’s preliminary view about when an asset of a complying superannuation fund will be invested, held in reserve or otherwise dealt with solely to enable or for the sole purpose of enabling a fund to discharge liabilities payable in respect of superannuation income stream benefits, for the purposes of paragraph 295-385(3)(a) or subsection 295-385(4) of the ITAA 1997.

    Description

    The view contained in the then draft tax determination was that an asset cannot be partly or in part segregated. Section 295-385 of the ITAA 1997 applies at the level of each single, discrete, indivisible asset at law.

    Who we consulted

    Public consultation, industry and tax professionals.

    Outcomes

    Draft Taxation Determination TD 2013/D7 was withdrawn on 11 December 2013.

    A number of submissions were received during the course of consultation and it became clear that approaches vary materially across the industry.

    A new Determination dealing specifically with the key issue of bank accounts will be issued in the near future, and the ATO will further consider and consult on the balance of the matter.

    [201402] Small business CGT concessions and unpaid present entitlements

    Purpose

    To clarify when a beneficiary’s UPE is taken into account in working out a trust’s maximum net asset value (MNAV) for the purposes of applying the small business CGT concessions in Division 152 of the Income Tax Assessment Act 1997 (ITAA 1997).

    Description

    CGT concessions may be available for an entity that satisfies, among other things, a maximum net asset value test. That test looks to the difference between the market value of the assets of the entity and liabilities related to those assets.

    There is uncertainty about how the MNAV of a trust is calculated if there are UPEs – for example, is an UPE a liability of the trustee and a debt interest of a beneficiary for the purpose of the maximum net asset value test?

    However, the debt issue has broader implications – for example, in the context of the bad debt write-off provisions. In coming to a view on it, we are cognisant of not disturbin approaches we have taken previously regarding Division 7A loans.

    Who we consulted

    Representatives nominated by members of the Closely-held trust working group

    Outcomes

    A package of three draft Determinations will be published to advise taxpayers of the ATO view on this and two related issues.

    [201401] Tax Laws Amendment (2012 Measures No. 2) Act 2012 - Dual application of pre and interim rules to single asset

    Outcome

    This matter was actioned through other processes.

    The ATO provided existing information and guidance.

    Last modified: 02 Nov 2016QC 43753