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National Tax Liaison Group key messages 9 September 2021

Information about the key topics discussed at the National Tax Liaison Group meeting 9 September 2021.

Last updated 18 October 2021

Key highlights

  • Update on the Treasury review of Explanatory Memoranda and the combined review of new legislation guidance material
  • Discussion on the Treasury and ATO protocol
  • ATO response to extended lockdowns and disruptions to business
  • Update on Legal Professional Privilege Protocol
  • Outcomes from the scoping workshop to measure tax compliance costs
  • Discussion on announced but unenacted measures
  • Update on OECD Pillar 1 and Pillar 2

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 noted that this is the last NTLG meeting for Grant as he has accepted a role as KPMG Global Tax Policy Leader and will be moving to the United Kingdom (UK) later this month. We thank Grant for his commitment and significant contributions as external Co-chair of the NTLG and to other ATO and Treasury forums over many years. We wish Grant all the very best in his new role in the UK.

NTLG Co-chair Grant Wardell-Johnson expressed the great privilege he has had to be involved in the NTLG since 2012, co-chair responsibility since 2015 and the ability to see the system operate from where we stand. He noted the beneficial revamp of the NTLG under Commissioner Chris Jordan and the contributions from external members in fostering a high level of trust amongst members and their inherent desire to improve the system.

Grant's parting observations for the group to consider:

  • A debrief process on the implementation of significant new measures involving the ATO, Treasury and Professional associations would be valuable to achieve continuous improvement.
  • Consultation needs to occur much earlier than it commonly does, with a focus on outlining the problem and seeking input on appropriate solutions, rather than a focus on reviewing the ATO view. Grant acknowledged that professional bodies could also add additional value to the consultation process by focusing on the whole system rather than specific issues.
  • Tax administration should be by design and at the right speed, noting that Australia is well placed and usually ahead of the pace around the world.
  • There will be an increase in global interdependence on taxation where tax laws in one country can impact the approach in another jurisdiction.
  • More needs to be done to address difficult problems early. The current approach can lead to difficult issues being left for years which can create significant transitional issues. We need infrastructure to bring in multiple perspectives to tackle intractable problems and manage transition.

Review of Explanatory Memoranda and new legislation guidance material

Sam Reinhardt, First Assistant Secretary, Corporate and International Tax Division, Treasury; Simon Writer, First Assistant Secretary, Law Division, Treasury; Alexander Affleck, Acting Deputy Chief Tax Counsel, Public Advice and Guidance, ATO; Usha Narain, Acting Deputy Commissioner, Policy Analysis and Legislation, ATO and Lisa Clifton, Assistant Commissioner Tax Counsel Network, ATO

Review of Explanatory Memoranda

Simon Writer noted the significant progression of the review of explanatory memoranda (EM) including engagement with external stakeholders. Treasury’s intent is to develop a product that clearly communicates the policy intent underpinning a proposed new law and explains the changes proposed. An update will be shared on the progress of implementation at the November National Tax Liaison Group meeting.

Review of new legislation guidance material

Sam Reinhardt and Alexander Affleck noted the review has commenced on the new legislation guidance products, following feedback received in June 2021 on the terms of reference for the work. The aim is to have a shared understanding on the role of guidance products and best practice for developing that material.

Targeted consultation workshops will run over the next two months to examine the recent experience with new law guidance products and to identify learnings. Feedback will be collated, and a draft analysis paper will be provided to members for further discussion.

Members noted that they generally find the Law Companion Rulings to be a valuable product. Members further noted the greater transparency around the development of new law will support the community to have a better understanding of what the government is trying to achieve.

Treasury and ATO protocol

Treasury and the ATO noted that the Protocol provides a framework for the working arrangements between the two agencies to enable the best possible functioning of the tax system. The ATO and Treasury referenced their strong relationship and regular interactions, including frequent formal and informal meetings that are conducted at all levels within each agency and involving multiple areas of each. The agencies noted the regular and early sharing of insights and issues between them.

Members noted that greater visibility on the Treasury and ATO relationship would be beneficial for the community to better understand how new law is designed and implemented, as well as how issues are identified and resolved. Treasury and ATO welcomed further discussion with members to further understand their views.

Commissioner comments

Chris Jordan, Commissioner of Taxation and Registrar of the Australian Business Register and Australian Business Registry Services

Chris Jordan thanked Grant Wardell-Johnson, for his commitment and significant contribution over many years.

Supporting tax professionals

The ATO is very aware of the current pressure on tax professionals and taxpayers and is constantly monitoring the COVID-19 situation to provided tailored solutions. We encourage people to continue lodging and therefore remain connected with the system.

The ATO is establishing a Lodgment Program Working Group with representatives of professional associations, tax practitioners and the ATO to ensure the lodgment framework is still effective. The review will take approximately 12 months.

It is important to continue working together to navigate this environment. Ongoing input and feedback are essential to us administering the system and continuing to support the tax profession in the best way we can.

Revamp of

Improving our website is a key commitment for us which requires a replacement of our website technology. Last financial year, we had over 112.7 million website sessions and more people are using the website every day.

We know how important our website is to tax professionals and that they want easy-to-access information from the ATO – more technical information that helps them in their role as advisers and simple, clear and easily understood explanations to share with their clients.

We are also exploring how we can better support users to understand what changes have been made to web content and when.

Recent reports noted that our corporate plan did not consider the important role the tax profession plays in administering the system. This is not a true reflection of how we see tax professionals. Better supporting tax practitioners with improved services is firmly in our sights within our strategic initiatives.

Modernising Business Registers Program

The Modernising Business Registers program brings together over 30 separate registers to combine them with the Australian Business Register (ABR) on a new single platform.

One of the first deliverables will be the introduction of the director identification number (director ID), which will require new and existing directors to prove their identity. The aim of the director ID is to combat illegal activities such as phoenixing and create a fairer business environment.

Members asked if there were ATO programs that could be delayed, for example, Single Touch Payroll (STP) Phase 2, considering the pressures on tax professionals. ATO is happy to hear about any administrative levers that can be considered. For STP Phase 2, it is tied to other commitments and we are subject to these requirements.

ATO response to extended lockdowns and disruptions to business

Michael Croker, Chartered Accountants Australia and New Zealand and Deborah Jenkins Deputy Commissioner, Stimulus Response, ATO

The purpose of this item was to address members’ observations of the issues that can arise where multiple jurisdictions are making support available with different criteria applied. This means there are opportunities for errors, inconsistencies with state versus federal definitions, and different tax treatment of payments which can be confusing for taxpayers.

Deborah Jenkins provided members with information on her role as the ATO’s lead for the stimulus response noting:

  • The role is to provide State and Territory governments with a senior ATO official to support them as required.
  • Data sharing with the States and Territories already occurs through existing memorandums of understanding. Additional legislation has been passed that will allow for information to be shared for the purposes of the COVID-19 response.
  • Whether any Commonwealth scheme is created in the future is a matter for government. The ATO is ready to assist if called on by government.
  • The administrative leavers that the ATO has are being used in a tailored, targeted and considered manner.

IGTO article on when the Commissioner is required to give a taxpayer reason

Tony Greco Institute of Public Accountants and Kirsten Fish, Acting Second Commissioner, Law Design and Practice Group, ATO

The purpose of this item was to discuss the Inspector-General of Taxation and Taxation Ombudsman (IGTO) article on whether the ATO must provide reasons for a decision to taxpayers.

The ATO agrees that the article accurately summaries the legal framework on the Commissioner’s obligations to provide reasons to a taxpayer. While there is no statutory requirement to provide reasons in all circumstances, the Commissioner recognises the value of providing reasons as part of delivering good client experience and this is supported in the Taxpayers Charter.

Providing reasons safeguards against decisions being made improperly or without due consideration and encourages consistency in decision making. The Commissioner’s administrative approaches to providing reasons is consistent with this.

The ATO welcomes feedback once the IGTO review An Investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal is completed.

Legal professional privilege protocol

Rebecca Saint, Deputy Commissioner, Public Groups, ATO and Belinda Darling, Assistant Commissioner, Public Groups and Internationals, ATO

The purpose of this item was to provide members with an update on the draft ATO Legal professional privilege (LPP) protocol (the Protocol). It has been developed to assist and support taxpayers when making LPP claims. The Protocol outlines a series of recommended best practices which can give taxpayers and their advisers confidence in whether the ATO will accept, review or challenge their LPP claims. While the ATO cannot determine the validity of LPP claims, it can choose whether to accept or refer the matter to a Court for determination. The Protocol does not provide an analysis of the law of LPP.

In developing the Protocol, confidential consultation has been undertaken with some professional organisations, including the Law Council of Australia. The Protocol has been significantly updated and streamlined in recognition of the feedback and insights obtained through the confidential consultation process. The ATO will now undertake broader public consultation on the Protocol.


  • noted that:
    • in some cases, taxpayers may not be able to provide the title of the communication as a standard ‘particular’ as the title itself may also be privileged
    • the privilege belongs to the client and not the lawyer so a lawyer should not be sanctioned for claiming privilege
  • questioned if the ATO forms must be used if there are hundreds of documents to be provided
  • recommended the ATO and professional bodies conduct joint education events to support an understanding of the law of LPP to complement the Protocol.

The ATO noted its need for sufficient information to properly consider any privilege claim and its expectations on advisers to exercise due care and skill, and welcomed the opportunity to provide further education to tax system participants.

Foreign Investment Review Board

John Breusch Director, Policy Framework Unit, Foreign Investment Division, Treasury; Hector Thompson Deputy Commissioner, Internationals, ATO

The purpose of this item is to provide an update on the review of the changes to the Foreign Investment Review Board. The Terms of Reference were published in early 2021. The evaluation will consider the impact on foreign investment and whether the right balance has been struck between encouraging foreign investment and protecting Australia’s national interest.

A consultation paper was released in late July 2021 and approximately 30 submissions have been received. Some key issues raised in the submissions include processing times and the definition of national security business. Treasury is required to provide a written report of the review to the Treasurer on 10 December 2021.

New investment engagement service

Christopher Ferguson Assistant Commissioner, Public Groups and International, ATO

From 1 July 2021, the new investment engagement service (NIES) offers investors an opportunity to engage with ATO specialists prior to the execution of significant commercial transactions. The purpose of the NIES is for the ATO to further support business by providing tailored guidance on specific tax issues within a short timeframe. Recent cases have been completed within two weeks.

We provide the taxpayer with a report setting out the ATO's views. The report will provide details of the transaction, our views and how the investor can prepare for any potential future reviews. The current threshold is for investments in excess of $250 million.

The service offer may be reviewed to see if the eligibility criteria needs to be adjusted. There has been some confusion by taxpayers about the formality of the service with taxpayers asking about review rights which are not applicable.

Compliance costs scoping workshop

Grant Wardell-Johnson, Chartered Accountants Australia and New Zealand; Peter Godber, The Tax Institute; Michelle de Niese, Corporate Tax Association and Andrew Watson, Acting Deputy Commissioner, Small Business, ATO

An update on the recently held compliance costs scoping workshop was provided. Members noted that the meeting was extremely productive and focussed on scoping the topic. While members acknowledged that this will be a long-term and complex project, they noted that this would ultimately benefit taxpayers and the ATO. Additional stakeholders may be required, particularly academics to help shape the direction of the project.

Andrew Watson confirmed that since the meeting he has contacted an academic who has provided a wealth of material, and further discussions are planned. The ATO will continue to scope the work and consider a way forward. This includes:

  • meeting with the Australian Bureau of Statistics on how they collect data
  • engagement with some of the key corporate measures of the ATO
  • discussions with Treasury and the Office of Best Practice Regulation.


Sam Reinhardt, First Assistant Secretary, Corporate and International Tax Division, Treasury

Treasury noted they are waiting for final sign off to an increase in funding for treaties work. Once resources have been allocated, consultation will commence on treaties

Consultation has or will be occurring on:

Since the last NTLG meeting:

  • six tax measures are before the House of Representatives
  • seven tax measures and minor amendments are before Senate
  • thirty-nine tax measures have received royal assent.

Announced but unenacted measures

Grant Wardell-Johnson, Chartered Accountants Australia and New Zealand; Sam Reinhardt, First Assistant Secretary, Corporate and International Tax Division, Treasury; Bede Fraser, Assistant Secretary, Personal and Small Business Tax Branch, Individuals and Indirect Tax Division, Treasury; Paul Fischer, Acting Assistant Secretary, Corporate and International Tax Division, Treasury; Steele Broderick, Director, Corporate and International Tax Division, Treasury and Usha Narain, Acting Deputy Commissioner, Policy Analysis and Legislation

The purpose of this item was to discuss the prioritisation approach for announced but unenacted measures. Treasury noted that the government determines its key legislative priorities and has been focusing on COVID-19 related measures. Current legislation that is being developed includes:

  • Loss Carry Back Extension
  • Concessional taxation of certain patents
  • Exempt current pension income calculation streamlined for super funds
  • Corporate tax residency
  • Franked distributions funded by capital raising
  • Self-assessment of effective life for certain intangible assets
  • Taxation of financial arrangements reforms
  • FBT record keeping.

Members provided a list of measures that are a priority for them. They cover superannuation reform, Division 7A, business/corporate measures such as corporate tax residency, temporary full expensing and black economy measures. Treasury noted that of the list, nine would not be considered announced measures. They will further review and advise members of these.

The following updates were provided on:

  • Individual tax residency
    • This is a 2020–21 budget measure to modernise the framework by implementing the Board of Taxation proposed approach. This measure aims to provide simplification and certainty for taxpayer and employers. The measure is expected to be revenue neutral.
    • Commencement of this measure will be 1 July after receiving royal assent.
    • Opportunities are being investigated for early consultation prior to the release of draft legislation.
  • Sharing economy
    • This legislation is currently before parliament – it has been referred to the senate committee and is estimated to come back in October.
    • Members identified that this will impose additional compliance burdens on platform providers. Treasury is aware of those concerns and will monitor the scheme once it comes into effect.
  • Corporate tax residency
  • Rules will focus on central management and control and the conduct of core activities. The legislative design is proving difficult.
  • Treasury is having discussions with the ATO to progress the design of the measure.
  • A consultation strategy is being considered and may commence prior to the drafting of legislation.
  • Members offered their assistance to workshop various scenarios with Treasury to help identify and resolve issues with the proposed legislative design. Treasury welcomes the offer as there is a need to understand practical impacts.

OECD Pillars 1 and 2

Grant Wardell-Johnson, Chartered Accountants Australia and New Zealand; Maryanne Mrakovcic Deputy Secretary, Treasury; Sam Reinhardt, First Assistant Secretary, Corporate and International Tax Division, Treasury

The purpose of this item was to provide an update on more recent developments of OECD digitalisation of the economy. To date, 134 of the 140 counties have signed the July statement which set out how Pillar 1 and Pillar 2 will operate at a high level. Consultation will commence on 10 September 2021 with the intention to reach agreement on as many issues as possible, including the scope and details of carveouts, the proportion of residual profit to be allocated between countries, and the global minimum tax rate.

A detailed implementation plan still needs to be developed with the focus, so far, being heavily on developing the policy. This will change to a focus on administration once the G20 announcement in October 2021 is made.

The Australian delegation has been on top of the administrative issues and leads other countries in terms of sophistication of understanding of administrative issues that is jointly shared between policy makers and administrators. Further consultation, which will involve the ATO and external stakeholders, will be undertaken. Treasury thanked everyone for their assistance so far.

Personnel changes within the ATO

Kirsten Fish, Acting Second Commissioner, Law Design and Practice Group, ATO

The purpose of this item was to provide an overview of recent Senior Executive movements within the ATO. The organisational chart provides the current Senior Executive responsibilities. There is a future change coming with Ben Kelly to commence in the Deputy Commissioner Policy, Analysis and Legislation role on 1 October 2021. Members are encouraged to contact the NTLG mailbox or Deputy Commissioner offices to obtain contact information for Assistant Commissioner level ATO staff.

NTLG action items

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

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

  • NTLG 1911/1 – Establishment of NTLG sub-group to consider compliance costs
    • Members agreed for this item to remain in progress based on the discussions in the meeting as the ATO is continuing to scope out work and ways forward.
  • NTLG 2106/1 – Information regarding early lodgment of tax returns before pre-fill information is available
    • Deputy Commissioner Hoa Wood provided information on common errors that occur with early lodgement to members on 17 August 2021.
    • Members requested information for previous years to obtain a better understanding. The ATO will provide further information on previous year lodgments and is also considering what information can be provided closer to tax time to encourage those to lodge after pre-fill information is available. This item will remain in progress.
    • It was agreed that this item remains in progress.


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


Maryanne Mrakovcic


Sam Reinhardt