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National Tax Liaison Group key messages 7 June 2021

Information about the key topics discussed at the National Tax Liaison Group meeting 7 June 2021.

Last updated 23 August 2021

Key highlights

  • Updates on:
    • ATO readiness for Tax Time 2021 and support for tax professionals
    • ATO remediation programs following decisions handed down by the Full Federal Court in the matter of Commissioner of Taxation v Apted and for Commissioner of Taxation v Douglas
    • Superannuation guarantee amnesty.
  • Discussion of Treasury and ATO’s review of guidance material for new legislation
  • Briefing on Treasury matters
  • Treasury’s request for members’ feedback on the recent developments of the OECD’s multi-lateral negotiations including an update on OECD Pillar 1 and Pillar 2
  • Discussion of key tax measures announced as part of the Federal 2021–22 Budget
  • Overviews of the Justified Trust Program and the ATO’s administration of Objections.

Opening comments

Kirsten Fish, Acting Second Commissioner, Law Design and Practice Group, ATO and Grant Wardell-Johnson, Chartered Accountants Australia and New Zealand.

National Tax Liaison Group (NTLG) Co-chair Kirsten Fish welcomed members and advised that Justin Byrne has joined the NTLG representing the Law Council of Australia.

Kirsten Fish briefed members on ATO updates.

Tax Time 2021

Preparations are underway for Tax Time 2021 with readiness activities tracking well.

The ATO acknowledges the heavy workload of tax practitioners with current pressures from the Victorian shutdown and clients seeking to claim the stimulus measure.

The ATO will continue to provide ongoing tailored support for tax practitioners who are encouraged to increase their use of self-service and online platforms.

Ongoing collaborative engagement and support with tax practitioners through the Tax Practitioner Stewardship Group will increase leading into Tax Time 2021.

System stability and capacity to manage peaks and agent demand for online services remains a focus for the ATO.

Members raised their concerns where taxpayers seek to lodge their tax returns early before pre-fill information is available and noted there is limited information for what happens in these circumstances. The ATO noted it could provide information to members out-of-session.

Remediation programs

‘Apted’ case

On 24 March 2021 the Full Federal Court (FFC) handed down its decision in the matter of Commissioner of Taxation v Apted [2021] FCAFC 45External Link.

After consideration of the judgment a decision was made by the Commissioner not to appeal the matter.

On 29 April 2021 the ATO released a Decision Impact Statement and revised ATO Law Administration Practice Statement PS LA 2020/1 Commissioner's discretion to allow further time for an entity to hold an ABN or provide notice to the Commissioner of assessable income or supplies.

The ATO advised the community and published information on on 29 April 2021 that the ATO would be conducting a proactive review of all previous applications made to the Commissioner for the exercise of a discretion where it had not granted the discretion for further time to demonstrate eligibility.

While this case considered JobKeeper, the same ABN and integrity requirements apply for entitlement to the cash flow boost.

The ATO is currently undertaking reviews of eligible business participants for the JobKeeper Payment and in relation to the cash flow boost.

The ATO plans to complete the reviews by 30 June 2021 and will seek additional information from applicants where needed.

Military Superannuation

On 28 April 2021, the ATO published the remediation program to correct the income tax treatment of certain payments of invalidity benefits that have been made to impacted individuals following the Full Federal Court decision handed down on 4 December 2020 in Commissioner of Taxation v Douglas [2020] FCAFC 220External Link.

This is the first phase of the ATO’s Roadmap for remediation and the ATO invited impacted individuals to opt-in to have their income tax assessments for the 2010–11 to 2019–20 income years amended, to ensure that military invalidity benefits paid under invalidity pensions that commenced on or after 20 September 2007 are correctly taxed as superannuation lump sums and not as superannuation income stream benefits.

In June 2021, the ATO will be commencing Phase 2 of the remediation process where the ATO will be proactively engaging affected taxpayers who did not opt-in under Phase 1.

To support the remediation process, the ATO proposes to make two Legislative Instruments that set alternative methods to calculate the tax-free and taxable components of a superannuation benefit for recipients of certain military invalidity pensions.

Superannuation Guarantee Amnesty

Second Commissioner Jeremy Hirschhorn noted the following in relation to the Superannuation guarantee amnesty:

  • Penalties will apply post amnesty for super guarantee breaches
  • The Law Administration Practice Statement PS LA 2020/4 Remission of additional superannuation guarantee charge is under revision
  • The ATO is proactively remediating previous cases so that they are more in line with the current view.

In his opening remarks, NTLG Co-chair Grant Wardell-Johnson:

  • noted the recent statement by the OECD’s G7 Finance MinistersExternal Link on key elements of international tax reform designed to address the tax challenges of the digitalisation and the globalisation of the economy was an important and positive development
  • reflected on the book ‘Noise’ by Daniel Kahneman and noted that organisations can have a lot of ‘noise’ where people are making judgments and decisions, and this can result in people arriving at different outcomes to the same set of circumstances. The ATO may need to consider how much ‘noise’ is in the organisation and, for consistency, look for opportunities to clarify and refine messaging and communications to reduce the ‘noise’ in decision making.

Review of new legislation guidance material

Michelle de Niese, Corporate Tax Association; Sam Reinhardt, A/g Deputy Secretary, Treasury; Simon Writer, First Assistant Secretary, Law Division, Treasury; Susan Bultitude, Director, Corporate and International Tax Division, Treasury; Andrew Orme, Deputy Chief Tax Counsel, Public Advice and Guidance, ATO; and Louise Clarke, Deputy Commissioner, Policy Analysis and Legislation, ATO

Andrew Orme provided an overview and status update, noting that the ATO and Treasury have established a group to consider the concerns that the external NTLG members have raised about the guidance provided for new law. The group has had an initial meeting to discuss the work plan, timelines, product mix, timing and consultation.

A paper will be developed that sets out the new law guidance products, their role, boundaries for their use, how they are developed and known difficulties with the product or processes. Various case studies will be considered to identify the issues. This paper will be distributed to NTLG members as soon as possible.

Simon Writer noted that Treasury is reviewing several aspects of explanatory memoranda production and noted:

  • This is broader than tax law with a focus on explanatory memoranda approach, consistency of content and production
  • The next phase will focus on style and preparation with some consultants assisting with this work. The aim is to finalise this work by August with consultation with stakeholders to follow
  • The intent is to make clearer the articulation of policy intent.

Members commented that following the announcement of a measure, it sometimes appears that the scope broadens when the legislation is drafted, for example, the changes to the vacant land measure. Treasury noted that this is one of the topics being considered in the selection of case studies.

Treasury update

Sam Reinhardt, Acting Deputy Secretary, Revenue Group, Treasury

Sam Reinhardt noted:

  • the Government announced funding in the 2020–21 Federal Budget to progress work to expand Australia’s treaty network and seek opportunities to increase trade and investment including the exchange of information – Treasury has established the International Tax and Treaties Branch in the Corporate and International Tax Division to negotiate several treaties over the next couple of years
  • the recently announced COVID-19 Disaster Payment to help people affected by COVID-19 restrictions
  • legislative update – two new tax measures have been passed in Parliament with 16 measures before the House of Representatives
  • consultation has been completed on:  
  • consultation is planned later this year on the Patent Box concession measures, Corporate Residency and the Sharing economy reporting regime.

Update on Digital Tax including OECD Pillar 1 and Pillar 2

Grant Wardell-Johnson, Chartered Accountants Australia and New Zealand; Sam Reinhardt, A/g Deputy Secretary, Revenue Group, Treasury; and Marty Robinson, A/g First Assistant Secretary, Corporate and International Tax Division, Treasury

The purpose of this item was for Treasury to seek members’ feedback on the recent developments of multi-lateral negotiations and to provide an update on OECD Pillar 1 and Pillar 2. The update noted:

  • The OECD-led digital tax process is still working towards reaching a global consensus on the tax challenges of the digitalisation of the economy and ensuring global minimum taxation
  • The G7 recently committed to principal design elements for Pillar 1 and Pillar 2. This includes new taxing rights under Pillar 1 on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. A proposed global minimum tax rate under Pillar 2 of 15%
  • It has been suggested that all unilateral measures across countries, including Digital Services Taxes would need to be repealed. There is some suggestion that this may extend to Australia’s Multinational Anti-Avoidance Law and Diverted Profits Tax
  • The proposals will be advanced at the July 2021 meeting of the G20/OECD Inclusive Framework (comprising 139 countries). Treasury welcomed feedback on the proposals
  • Treasury and the ATO continue to attend meetings of the OECD working parties and the Taskforce on the Digital Economy that are considering various technical issues on the two Pillars
  • While some technical aspects of the work are yet to be bedded down, Treasury is optimistic that a high-level agreement can be reached at the July 2021 G20 Finance Ministers’ meeting.

Members’ comments included:

  • Details of relevant industries that will not be subject to the rules is critical
  • Compliance costs for Pillar 2 are likely to be significant.

2021–22 budget measures

Sam Reinhardt, Acting Deputy Secretary, Revenue Group, Treasury; Georgina Prasad, Acting Assistant Secretary, Individuals and Indirect Tax Division, Treasury; Natashia Allitt, Acting Director, Individuals and Indirect Tax Division, Treasury; Louise Clarke, Deputy Commissioner, Policy Analysis and Legislation; Rebecca Saint, Deputy Commissioner, Public Groups, ATO

This item was to discuss some of the key tax measures announced as part of the Federal 2021–22 Budget. Members provided a list of potential issues in relation to announced measures with their comments.

Treasury noted the following in relation to the announced Budget measures:

  • Patent Box tax concession for Australian medical and biotechnology innovations – this will be an opportunity to test this approach to encourage capital investment. It is expected that the measure will not be easy to implement and that a consultation paper will be released soon. Further consideration is to be undertaken if this measure should extend to the clean energy sector
  • the extension of temporary full expensing, noting the criteria has not been changed
  • a significant concession for depreciating assets
  • the removal of a taxing point for Employee Share Schemes where an employee ceases employment
  • Offshore Banking Units (OBU) – the removal of concessional tax treatment currently available to OBUs and the consideration of alternatives. It is expected that consultation will be undertaken regarding this
  • Corporate Collective Investment Vehicles (CCIV) – previously consulted on the draft legislation. The Government has committed to establishing a CCIV regime by 1 July 2022
  • modernising and replacing the tax rules for determining individual tax residency.

The ATO noted:

  • The ATO early engagement service will be established to provide investors with fast track tax advice on transactions. The ATO is preparing to implement this service from 1 July 2021 with consultation recently undertaken. The ATO will issue written advice to taxpayers on the ATO’s position. This advice will outline the factual circumstances that were provided and on which the position was established. This advice will provide practical, not legal, certainty
  • The Government announced that the Board of Taxation would undertake a review to evaluate the dual agency administration model for the Research and Development Tax IncentiveExternal Link. Consultation is being undertaken with stakeholders invited to provide early feedback on key issues. The Board of Taxation is required to report back to the Government by 30 November 2021.

Justified Trust Program

Michael Croker, Chartered Accountants Australia and New Zealand; Michelle de Niese, Corporate Tax Association; Rebecca Saint, Deputy Commissioner, Public Groups, ATO; and Tim Dyce, Deputy Commissioner, Private Wealth, ATO

Members raised this item to discuss how the ATO is recalibrating its approach depending on the different touchpoints in the market, for example, private groups and, in the context of large corporates and other taxpayers more broadly, the timing and level of relief provided where taxpayers achieve high assurance. Members were interested in how justified trust would be applied in the other market segments.

The ATO provided members with a high-level strategic overview of the implementation of the justified trust framework, that included the Top 500 and Next 5,000 programs of work related to the private wealth sector and the Top 100 and Top 1,000 programs related to the large corporate sector.

Tim Dyce noted that the ‘one size fits all’ approach reported in the media is incorrect. The Top 500 program is an expansion of the previous Top 320 program that existed from 2016. The approach has evolved to recognise the types of controls that are appropriate. This includes providing practical suggestions on how tax governance can be improved as there is an area where taxpayers commonly fall short of Justified Trust due to shortcomings in their approach. The ATO’s approach is tailored as the ATO recognises that different organisations require different tax governance approaches.

Members noted that the Top 500 and 5,000 programs have a heavy reliance on tax advisers and there should be a focus on education of the adviser. The ATO noted it has guidance and has undertaken a significant number of presentations to advisers. The ATO will be releasing videos on governance processes to provide more practical advice to advisers.

The ATO noted that the GST assurance program has identified that many concerns arise from inadvertent system errors.

In July 2020, the ATO published the GST Governance, Data Testing and Transaction Testing Guide. The ATO is currently working on an independent data testing guide to help tax practitioners to undertake testing to meet ATO expectations. This testing would be conducted to give the ATO assurance and would also provide confidence to the market.

ATO’s current approach to compliance

Michael Croker, Chartered Accountants Australia and New Zealand; Jerome Tse, The Tax Institute; Elinor Kasapidis, CPA Australia; Peter Godber, The Tax Institute; Michelle de Niese, Corporate Tax Association; Jeremy Hirschhorn, Second Commissioner, Client Engagement, ATO; Deborah Jenkins, Deputy Commissioner, Small Business, ATO; and Tim Dyce, Deputy Commissioner, Private Wealth, ATO

Members conveyed the following feedback from their associations’ members in relation to the ATO’s current approach to compliance:

  • there is a perception that the ATO is taking a firmer approach to audits
  • the expectations from compliance officers that responses will be provided in traditional timeframes not taking into account the ongoing impacts of the COVID-19 pandemic
  • raising matters with compliance officers seldom achieves a better outcome and there are sometimes blockages to escalating the issue, including, for example, refusal to provide the name or contact for the officer’s supervisor or manager
  • there is a range of compliance approaches that can be misleading to some taxpayers.

Deborah Jenkins noted that presentations on the ATO’s current approach to compliance had been provided to relevant stewardship groups in recent weeks. She also noted if there is feedback from the associations’ members, it should be provided to the relevant stewardship groups in the first instance, for example, the Small Business Stewardship Group and the Tax Practitioner Stewardship Group. Deborah Jenkins encouraged members to raise matters at those forums and noted while the ATO values feedback, it is difficult to deal with these matters unless specific examples are provided that the ATO can act on.

Jeremy Hirschhorn and Deborah Jenkins reiterated that they and all other ATO Deputy Commissioners in the Client Engagement Group welcome feedback on specific matters and noted:

  • The ATO acknowledges the effects of the COVID-19 pandemic noting that it may be challenging for the ATO to make an assessment unless taxpayers or their advisers/tax practitioners advise of any difficulties in lodging, paying, or responding to requests. Where the ATO is made aware of a taxpayer’s circumstances it can then provide a tailored approach – noting the move away from blanket approaches
  • Extensions of time for requests for information will be considered. If there is a delay, it is important that the reasons are communicated to the ATO early
  • Feedback to the audit officer and their manager is welcome and invited
  • Escalation processes do exist (and are outlined on audit letters) and are supported
  • There does not need to be a fear of retribution when raising issues. Issues should be raised as soon as they are identified
  • Issues raised by members should include specific information so that the ATO can consider and better understand the issues.

Members noted that there has been no real change to the ATO’s approach to compliance from the approach undertaken in 2018–19.

ATO’s current approach to Debt collection

Michael Croker, Chartered Accountants Australia and New Zealand; Jerome Tse, The Tax Institute; Elinor Kasapidis, CPA Australia; Peter Godber, The Tax Institute; Michelle de Niese, Corporate Tax Association; Vivek Chaudhary, Deputy Commissioner, Debt and Lodgment; and Cameron Sorensen, Assistant Commissioner, Debt and Lodgment, ATO

Members provided several examples of concern around actions taken in relation to the ATO’s current approach to debt collection.

The ATO provided members with a paper outlining the ATO’s approach to debt collection, the composition of the debt book and its approach to the management of disputed debts. Members noted that the information was very useful.

Key points included:

  • The ATO encourages taxpayers facing challenges in meeting their lodgment or payment obligations, to discuss this with their tax representative or contact the ATO to discuss the support that may be available to best suit their circumstances
  • The ATO has restarted firmer actions for taxpayers who continually fail to engage with the ATO regarding the payment of debt, particularly those who have had earlier offers of help and assistance and who have outstanding lodgments
  • The ATO has a set of principles for debt collection and has implemented a tailored approach to help taxpayers get back on track and support those in vulnerable positions
  • Several risks have been identified, including the increased growth of the debt book and aging debts, changes in taxpayers’ response to ATO’s engagement, financial difficulty, abandoned business, and potential solvency
  • Data and analytics support the ATO’s approach to tailored engagement. Data has been helpful in ensuring a visible approach and using analytics to inform next steps, including reminder services for next instalment of payments and re-engagement letters
  • Employer superannuation obligations, particularly super guarantee (SG) debts, have increased significantly. The ATO asked members for their views. Members indicated that a tailored and differentiated approach should be taken for those debts that are a result of the SG amnesty and for consideration to be given for the SG debt charge to be dealt with separately
  • Members advised that for SG debts in insolvency cases, these are included as ATO debts, rather than debts owed to employees. In cases where the employee agrees with the employer to receive a reduced amount, this is not considered by the ATO
  • Firmer or stronger action will occur for high risk disputed debt. There are approximately 30–50 cases per year in this category. For all disputed debt cases, the taxpayer continues to receive information about their debt. This does not mean that the ATO is actively pursuing the collection of the debt. Members identified that there is likely to be a misconception that receiving a statement of account from the ATO means that action is about to commence to collect the debt
  • Garnishees have been identified as an action that has a high impact on taxpayers. The ATO has changed its approach requiring affirmative contact with the taxpayer before proceeding with a garnishee. The number of garnishees issued by the ATO has fallen significantly
  • The ATO noted that specific feedback provided about communicating the outcome of a deferral request has resulted in a change in process requiring the ATO officer to contact the tax practitioner if the deferral is not approved.

ATO’s administration of Objections

Jeremy Geale, Deputy Commissioner, Review and Dispute Resolution, ATO

Jeremy Geale provided an overview of the ATO’s administration of objections that included:

  • Review and Dispute Resolution (RDR) is an independent unit within the ATO responsible for all the ATO’s objection and litigation functions
  • RDR handles all ATO objections involving all types of taxpayers and clients, to provide an independent review of decisions in line with the law and the ATO’s principles or fairness, timeliness and client experience
  • Objections are broken into sub-categories
    • Audit/ATO initiated – where the taxpayer disputes the ATO’s action on their tax affairs. This includes pre and post-issue audits, default assessments and private rulings
    • Client initiated –where the taxpayer wants to adjust any tax records where there has been no previous involvement by an ATO officer, particularly amendments outside the period of review.
  • Audit-initiated objections are more complex, adversarial and take longer to resolve compared to client-initiated objections
  • The sub-categories can be further grouped into known clusters of related objections
  • Client-initiated objections make up most identified objection clusters. These clusters are identified as having a related technical issue or driver. These may result from large scale schemes or are pending a key tribunal or Court decision
  • In early 2019–20, the ATO refined its objection triage function, adding a classification/allocation model designed to quickly assess all objections for priority/complexity and then align action to priority
  • The age of on-hand objections increased over the later part of 2019–20 as many objections officers were redeployed as part of the ATO’s COVID-19 response.

Members comments included:

  • Could an objection that is client-initiated result in audit type activities?

The ATO noted the matter may be referred to the specific market business area to undertake an audit. The approach would maintain the taxpayer’s objection rights and the taxpayer would be advised as to why the matter is not considered in the first instance by RDR.

  • Is more data available from the large market perspective and has the independent review process had an impact on the call-over process?

The ATO noted the independent review process has resulted in more objections in the large market. The numbers have been consistent over the last few years. There is a case call-over of all cases every six months with a case plan for every case.

  • For small business, do tax agents continue to represent their clients at the objection stage or is a new tax agent/adviser engaged? Is information presented that is different to the original information lodged? Members also queried whether lawyers should be engaged for Administrative Appeals Tribunal hearings rather than tax agents.

The ATO advised that this is not isolated to the small business market and that if the taxpayer has a tax agent, generally they continue to represent the taxpayer until the matter is resolved.

The ATO noted that specific data is not available noting that sometimes the change of an agent can be a trigger to the resolution of the matter.

Tax legislation allows additional information to be provided at the objection stage. This often results in the objection being allowed in full or part.

NTLG action items update

Jessica Chiu, Law Interpretation Specialist, Tax Counsel Network, ATO

Jessica Chiu provided a status update on the following open action item:

  • NTLG 1911/1 – Establishment of NTLG sub-group to consider compliance costs
    • On 3 March 2021 NTLG members provided a proposal for the establishment of a series of indices on compliance costs for the ATO’s consideration
    • The ATO is arranging an initial meeting on Wednesday, 30 June 2021 to workshop the proposal with several nominated NTLG members and ATO officers representing different market segments
    • The meeting details will be finalised and shared shortly.

Members agreed this action item is in progress.

Other business

All members

Members noted:

  • The current lockdown in Victoria is resulting in difficulties for tax agents for debt and lodgment activities, the ATO noted it acknowledges and is conscious of the impact and is considering engaging with clients in appropriate ways
  • In the past members have asked for information about adjustments related to early lodgment of returns as there is a concern about taxpayers who lodge early. The ATO noted that the first date for refunds is 16 July 2021 and that some information may be able to be provided to members out-of-session
  • Members commented that there should be a focus on how to better prepare clients to adapt to future changes in digitalisation.

Members offered their congratulations to James O’Halloran, Deputy Commissioner, Economic Stimulus Branch and Tim Dyce, Deputy Commissioner, Private Wealth on the announcement of their retirement.

Action item

NTLG 2106/1

Due date

Out of session


Second Commissioner, Client Engagement Group, Deputy Commissioner Individuals and Intermediaries


Information regarding early lodgment of tax returns before pre-fill information is available

The ATO to provide NTLG members with information about the nature and number of adjustments to pre-fill information where a tax returns is lodged before pre-fill information is available.


Attendees list




Kirsten Fish (Co-chair), Law Design and Practice


Jeremy Hirschhorn, Client Engagement


Jessica Chiu, Tax Counsel Network


Robyn Theacos (Secretariat), Enterprise Strategy and Design

Chartered Accountants Australia and New Zealand

Grant Wardell-Johnson (Co-chair)

Chartered Accountants Australia and New Zealand

Michael Croker

Corporate Tax Association

Michelle de Niese

CPA Australia

Alexis Kokkinos

CPA Australia

Elinor Kasapidis

Institute of Public Accountants

Tony Greco

Law Council of Australia

Angela Lee

Law Council of Australia

Justin Byrne

The Tax Institute

Jerome Tse

The Tax Institute

Peter Godber

The Tax Institute Professional Bodies Coordinator

Julie Abdalla


Marty Robinson


Sam Reinhardt


Apologies list




Maryanne Mrakovcic