Co-chair update
The Australian Taxation Office (ATO) welcomed Steve Southon, Chief Tax Officer, National Australia Bank, as the new co-chair of the Large Business Stewardship Group (LBSG). The group extended thanks to departing co-chair Michelle de Niese, Corporate Tax Association, for her involvement and stewardship of the group during her tenure and acknowledged her excellent contributions to improving the dialogue of the group.
The LBSG also welcomed new members:
- Jenny Wong, Tax Lead Policy and Advocacy, CPA Australia representative
- Paul Suppree, Corporate Tax Association representative
The ATO advised of the recent release of the ATO corporate plan 2025–26 and Our performance evolution. These highlight the purpose and vision of the ATO for the next 12 months. The ATO also recently published a draft Vulnerability Framework outlining the ATO's approach to identifying and supporting vulnerable people. Members queried changes to some of the metrics in the corporate plan.
The ATO provided an update on upcoming publications including the suite of findings reports and transparency reports for corporate tax entities and the research and development tax incentive.
International related party dealings
The ATO provided an overview on the statistics for international related party dealings that were published on ato.gov.au earlier this year for the financial years 2019 to 2023. The underlying data tables are available on data.gov.au. Members asked clarifying questions about the data cleansing methodology and how the data is used by the ATO.
Form consultation
Further to a discussion at a previous meeting, the ATO provided members with additional information on the consultation process for making changes to forms, specifically for the International dealings schedule (IDS). The IDS forms part of the tax time suite and is therefore included in corporate processes. Members discussed whether improved communications about the timelines for consultation could help consultation participants manage requests for feedback during busy business periods.
Members queried whether all changes to the IDS are necessary and commented on the compliance burden for corporates. The ATO explained that question changes are typically associated with legislative change and that the data is required from all corporates to build a picture of compliance and risk for the operating environment. This allows the ATO to tailor its engagements with taxpayers.
While not subject to the same tax time process, the ATO also noted that it will endeavour to follow a similar timeline and process for consultation on the reportable tax position schedule.
Large corporate compliance burden
Members led a discussion on the compliance burden for large corporates noting the intensity and breadth of the discussion has lifted across a broad range of industries and levels of corporate tax practitioner expertise. Four key areas have been identified:
- duplication in providing information to the ATO
- no or insufficient recognition for achieving high assurance
- no recognition for the totality of compliance costs for corporates
- utility or return on investment for compliance efforts.
Members proposed the formation of a working group with representatives from corporates, the Big 4, and the ATO to identify, scope and prioritise the issues.
The ATO acknowledges this as an area of concern and sees there is opportunity for modernisation. The ATO has already commenced embedding the ‘provide it once’ principle for form reporting and sees scope for a broader review of what data we collect and how as well as explaining why we need certain data.
Members agreed to compile a list of forms that cause duplication or drive significant compliance cost for tabling at the meeting in November to support a discussion around next steps. This will help the ATO shape a program of work in 2026.
Thin capitalisation updates
The ATO provided an updated on pubic and advice guidance products for the recently introduced thin capitalisation measures including:
- Consultation on draft Practical Compliance Guideline PCG 2025/D2 Factors to consider when determining the amount of your inbound, cross-border related party financing arrangement - ATO compliance approach has closed, and feedback is being considered.
- Practical Compliance Guideline PCG 2025/2 Restructures and the thin capitalisation and debt deduction creation rules - ATO compliance approach has been published.
- Guidance on the third-party debt test (Taxation Ruling TR 2024/D3 Income tax: aspects of the third party debt test in Subdivision 820-EAB of the Income Tax Assessment Act 1997 and Schedule 3 of Draft Practical Compliance Guideline PCG 2024/D3 Restructures and the thin capitalisation and debt deduction creation rules - ATO compliance approach) will be published in September 2025.
The ATO invited members to provide feedback to the Secretariat on what other guidance might be needed to support the implementation of the thin capitalisation measures.
Feedback on PCG 2025/D3
The ATO provided an overview of the design of draft Practical Compliance Guideline PCG 2025/D3 Global and domestic minimum tax lodgment obligations - transitional approach. The PCG relates to the transitional approach for global and domestic minimum tax lodgment obligations. Consultation opened to the public after the draft PCG was circulated for comment in the Pillar Two special purpose working group. Members queried whether further guidance could be provided either through the PCG or more generally around the definition for ‘designated local entity’ and ‘return not necessary’ indicators, as well as safe harbour thresholds.
Feedback on PS LA 2004/14
Members led a discussion on the recent changes to Law Administration Practice Statement PS LA 2004/14 ATO access to advice for a corporate board on tax compliance risk, specifically in relation to the changes made to the requirement for corporates to demonstrate they have in place risk management and governance frameworks that cover tax before the ATO can accept a claim for the concession. The changes were made as part of a care and maintenance review for all practice statements and were not intended to practically change the ATO’s administration of the concession. The ATO noted the members’ comments and flagged that the PS LA will be updated to clarify the issue.
Treasury
Treasury advised that focus is currently on the economic reform roundtable process, highlighting 3 key themes of fiscal sustainability, economic resilience and productivity. Treasury provided updates on:
- work coming out of the Productivity Commission, including the interim report on the first pillar for corporate tax reform
- developments for Pillar Two.
Members also sought an update on the progress on unenacted measures.
Board of Taxation
The Board of Taxation (the Board) provided the following updates:
- Board meetings and stakeholder engagement sessions have each occurred twice since the last LBSG meeting. Common themes from these forums included discussion on how the taxation applies to international investments for superannuation funds and GST compliance.
- The future work program is being considered pending results from the economic reform roundtable and review of the Productivity Commission reports. Focus areas include how the Board can assist with the delivery and implementation of new law, where it is appropriate to do so, and interacting with the ATO on compliance burden.
- Consultation on the Voluntary Tax Transparency Code (VTTC) closed in July. A wide range of stakeholder groups participated in the consultation. Key themes from feedback include reducing the compliance burden, maintaining flexibility for participants and ensuring consistent messaging around the code being voluntary. Comments were also made about social licence and the difficulty for taxpayers to remove themselves as participants once they have already subscribed to the VTTC. Advice has been provided to the Treasurer.
Other business
The ATO advised that moderation of the Top 100 population is underway, and letters are being drafted for release in the coming months.
The ATO advised that they will undertake a review of the LBSG’s membership in alignment with the charter. Members with terms approaching expiry will be notified shortly via email. An expression of interest will issue next month calling for nominations from new members to join the LBSG from the first meeting in 2026.
Attendees
|
Organisation |
Member |
|---|---|
|
ATO |
Rebecca Saint (Co-chair), Public Groups |
|
ATO |
Fiona Knight, Public Groups |
|
ATO |
Michael Ingersoll, Public Groups |
|
Australian Energy Producers |
Michael Fenner |
|
BHP Billiton Limited |
Andrew Cornish |
|
Big 4 Representative |
Lynda Brumm |
|
BlueScope |
Irene Filippone |
|
Board of Taxation |
Paul Korganow |
|
Coles Group |
Adalene Pandeli |
|
Corporate Tax Association |
Paul Suppree |
|
CPA Australia |
Jenny Wong |
|
Law Council of Australia |
Adrian Varrasso |
|
Microsoft |
Reagan Gruenthal |
|
Multiplex |
Angela Giunta |
|
National Australia Bank |
Steve Southon (Co-chair) |
|
Property Council of Australia |
Robert Ward |
|
ResMed |
Christian Chan |
|
Telstra |
Kelly Heezen |
|
Treasury |
Marty Robinson |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Anthony Siouclis, International, Support and Programs |
|
ATO |
Hector Thompson, International, Support and Programs |
|
ATO |
Louise Andolfatto, International, Support and Programs |
|
ATO |
Michelle Sams, Public Groups |
|
ATO |
Rebecca Irvine, Public Groups |
|
ATO |
Stephanie Long, Public Groups |
|
ATO |
Stephen Dodshon, Public Groups |
|
ATO |
Virginia Gogan, Public Groups |
Apologies
|
Organisation |
Member |
|---|---|
|
ATO |
Nadia Alfonsi, Public Groups |
|
Australian Retirement Trust |
Ian Roberts |
|
Business Council of Australia |
Pero Stojanovski |
|
Corporate Tax Association |
Michelle de Niese |
|
Treasury |
Diane Brown |