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Large Business Stewardship Group key messages 24 August 2022

Information about the key topics discussed at the Large Business Stewardship Group meeting held on 23 March 2022.

Last updated 9 November 2022

Justified trust

The ATO provided an update on the client agent linking project, Top 100 guidance on high assurance ratings and the Top 1,000 governance guide.

Client agent linking project

The Client agent linking pilot was deployed for Top 100 and Top 1,000 taxpayers in June 2022. The new function means that a taxpayer has to first nominate an agent in Online services for business before a new agent or an existing agent who is changing roles can link them as a client and access their information. The pilot was successfully introduced with minimal disruptions to the agents' linking process. The project team is continuing to review the pilot and feedback to inform the design of a solution for the broader population.

Top 100 guidance – what a high assurance rating means

The ATO has been working on guidance on how the ATO can give greater confidence through high assurance ratings. A smaller sub-group has been working with the ATO to develop this guidance. An embargoed copy of the guidance was provided to members pending publication in the coming weeks. The Corporate Tax Association noted they are currently drafting a paper on the Top 100 taxpayers’ experience who are currently under an annual compliance agreement, for the ATO to consider.

Top 1,000 governance guide

Member feedback was sought out-of-session on the draft updates to the ATO governance guidance. The guide has been updated to clarify:

  • Board-level control 4 frequency of testing – some members expressed views that periodic testing every 7 years is too long, therefore the guidance has been updated to clarify that such an extension would only apply in limited circumstances and if appropriate
  • Qualified reviewer – made clearer that internal audit will be a suitable qualified reviewer
  • Second time and subsequent testing – it was noted in large corporates, we do not typically see a subsequent round of exactly the same tests and tests are modified accordingly.

Emerging issues and next actions

The ATO provided an update on compliance risks and emerging issues.

Offshore hybrid mismatches and the imported hybrid mismatch rule

The ATO discussed with members our concern that taxpayers are misinterpreting the imported hybrid mismatch rule or may not be appropriately following the ATO’s recommended approaches in establishing that they have complied with the imported hybrid mismatch rule.

To assess tax risks associated with offshore hybrid structures and arrangements and in response to taxpayer feedback, the ATO has recently released International Dealings Schedule 2022 which includes new offshore hybrid mismatch questions at questions 47, 47a and 47b.

ATO Foreign investment tax consult team

The ATO reminded members that the ATO is a tax consultation partner to Treasury, providing advice to the Treasurer on the tax risk of foreign investment applications.

The ATO informed members that applicants are encouraged to provide as much information as possible relevant to the tax impact of the transaction during the tax consultation process to aid a more efficient process and to reduce the number of conditions attached to a foreign investment application. This enables the ATO to be better informed when assessing tax risks of a proposal.

2023 reportable tax position schedule instructions

The ATO invited Large Business Stewardship Group (LBSG) members to provide out-of-session feedback on the proposed reportable tax position (RTP) question for the recently issued Taxpayer Alert TA 2022/2 Treaty shopping arrangements to obtain reduced withholding tax rates. The proposed question does not impact current instructions and is for the 2023 RTP Schedule.

Action item


Due date

28 September 2022


LBSG members

Action item details

Members to review the draft question and provide feedback to link will download a file

Next actions

The ATO updated members on the next actions program where case volumes are stable but some cases are moving directly to audit. Factors driving escalation to audit include:

  • not providing a meaningful response to ATO concerns
  • entrenched difference of view regarding suitability of red zone pricing
  • adopting a position knowingly contrary to the ATO view of the law.

Where taxpayers are providing general narrative responses, rather than contemporaneous documentation, or where ‘period of review’ pressures are arising, we are increasing the use of formal powers to gather information in review products. Members queried the resolution rates of case numbers and how many are resolved pre-audit. The ATO will provide an update at the next meeting.

Large market independent review

The ATO updated members on the outcomes of the large market independent review (LMIR) and changes proposed by the ATO. A key finding of the review was that LMIR has been more helpful in some types of disputes than others. Members discussed the challenges in resolving transfer pricing disputes and provided feedback that there needs to be better processes for resolution. Members also requested further details on the use of the LMIR prior to and after the changes. Timing of the provision of information and its impact on dispute resolution was also discussed.

The ATO informed members that internal processes and procedures as well as LMIR web content is now being updated to reflect the changes to LMIR. Feedback on how the ATO implements the changes was sought with members invited to provide feedback out of session. The ATO will share the updated web guidance with members once available.

Large market client service offerings

The ATO updated members on the client service offerings that are available to the large market, including the various self-service channels and additional channels available to Top 100 and Top 1,000 taxpayers. The ATO explained the roles of the Large Service Team (including the Key Account Manager) and the Relationship Managers (comprising the Senior Relationship Manager, compliance case lead and Key Client Manager). The ATO also offered general insights on how these channels are used by taxpayers.

More work is being undertaken within the ATO to ensure that these channels are working as intended.


Deputy Secretary Diane Brown has joined as a new member of the LBSG, replacing Maryanne Mrakovcic who has retired. Treasury members provided an update on the priorities for the department, restructure of the division, and OECD pillars.

  • Treasury is focused on supporting the Treasurer’s priorities which include the upcoming Jobs and Skills Summit in September and the Budget in October.
  • Announced but unenacted measures, committed to prior to the Federal election, as well as lapsed legislation, are also being worked through.

Earlier in August, Treasury released the public consultation paper on Multinational Tax Integrity and Tax TransparencyExternal Link to address the tax avoidance practices of multinational enterprises (MNEs) and improve transparency through better public reporting of MNEs’ tax information. Submissions are due 2 September.

The OECD is working to finalise drafting of the Pillar 1 multilateral conventions by the end of this year. The Pillar 2 model rules were released at the end of 2021 and work is ongoing to develop the implementation framework.

Board of Taxation

The Board of Taxation updated members on the status of current reviews:

  • The CGT roll-over review has been finalised and report is currently being drafted.
  • The Digital assets and transactions review is in line with the government’s broader regulatory framework. Submissions are due 30 September.

The Board of Taxation is holding stakeholder consultation sessions in September. LBSG members can nominate to attend.

GST strategy

The ATO updated members on the Public Groups and International and GST strategy.

  • In 2019 the Indirect Tax business line was restructured. GST staff and functions were realigned to client-groupings in business lines while central coordination was retained for GST technical advice and program management in our Small Business business line.
  • The large market is generally highly compliant with GST obligations and willing to work with the ATO on systemic issues. We understand the market values consistency and transparency, especially through ATO public advice and guidance.
  • At the smaller end of the large market, there appears to be higher reliance on systems which underscores the importance of having lived, regularly tested, governance.

Members provided feedback to the ATO that GST issues under the Justified Trust framework could be improved and that management of GST risks should be aligned to previous income tax interactions. The ATO agreed to take on member feedback to address concerns.

GST product classification risk was also discussed. The ATO recommended that taxpayers establish good governance processes and controls and not rely on another entity’s public binding ruling (PBR). If unsure of the GST classification of an item after reviewing relevant ATO law and published guidance, taxpayers should seek ATO advice through ATO online services, ATO early engagement or requesting a PBR.

Other business

The ATO shared the following updates relevant to LBSG members:

  • The draft Intangibles practical compliance guideline (PCG) was released in May 2021 and in response to the feedback received, the ATO will make further changes. Notably, the risks and issues that the PCG is trying to address will not change. The ATO is reviewing the application of the PCG in order to provide more certainty to taxpayers on how the ATO would view their arrangements.
  • The ATO remains committed to publishing the Capitalised labour tax ruling. The ATO has undertaken a comprehensive review of the capital labour case pool to progress these cases.
  • Findings reports are in development, including Top 100 Findings report, Top 1,000 Findings report, RTP schedule findings report and Advice and Guidance findings report. The ATO advised that for this year’s Top 100 Findings report we intend to consult with high assurance taxpayers who have published their ratings about the ATO providing a link to their published information in the report.
  • The Corporate tax transparency report is usually released in December each year. It may be released earlier this year.


Attendees list




Rebecca Saint (Co-chair), Public Groups and International


Faith Harako, Public Groups and International


Rebecca Richards, Public Groups and International

Australian Petroleum Production and Exploration Association

Michael Fenner

Australian Super

Bevan Grace

BHP Billiton

Premila Roe

Big 4 Representative

Cindy Perryman

Board of Taxation

Christina Sahyoun

Business Council of Australia

Pero Stojanovski

Corporate Tax Association

Michelle de Niese (Co-chair)

Group of 100

Marc Lewis

Law Council of Australia

Adrian Varrasso

Property Council of Australia

Kelly Wong


Brian Purdy

Tax Institute of Australia

Pete Rhodes


Diane Brown


Marty Robinson

Guest attendees

Guest attendees list




Andrew Orme, ATO Executive


Hector Thompson, Public Groups and International


Judy Morris, Public Groups and International


Megan Croaker, Public Groups and International


Renae Ali, Objections and Review


Apologies list




Michael Ingersoll, Public Groups and International

Adelaide Brighton Cement

Mimi Ferguson

Australian Banking Association

Darren Norman

Australian Retailers Association

Abs Osseiran


Irene Filippone


Vanessa Trengove


Megan Williams

Seven West Media

Angela Giunta