ATO approach to guidance
The project team provided an overview of the engagement approach for Pillar Two and sought feedback on how further guidance could support taxpayers' understanding on the administrative aspects discussed. This included feedback on our broad engagement approach, the volume and nature of queries, initial priority topics for Public Advice and Guidance (PAG), initial topics for private rulings and need for guidance on new decline to rule provision.
Administrative aspects of the measure
We provided an overview on the new administrative obligations, which covered lodgment obligations, record keeping requirements, penalties, liability and payment, interest, assessments, objections and review rights. A focus was placed on lodgment with the discussion including:
- Lodgment obligations for the GloBE Information Return, the Australian IIR/UTPR Tax Return AIUTR, and Domestic Minimum Tax Return DMTR
- Lodgment obligations for specific entities/groups such as excluded entities, permanent establishments, unincorporated Joint Ventures and Joint Operations.
- Discussion on areas for future clarification and or guidance regarding lodgment obligations and penalties. This including acknowledging that, based on feedback to date, ATO guidance on penalties associated with Pillar Two lodgment obligations is an initial priority.
- Which aspects of the new lodgment obligations would benefit from ATO guidance, as well as examples of expected common lodgment scenarios which could benefit from guidance.
Feedback was sought on what aspects of the other administrative provisions would benefit from ATO clarification or are uncertain, and the relative priority and form that ATO guidance could take if there was a view that ATO guidance would be beneficial.
Member comments
Members raised the following points regarding the ATO's approach to guidance and administrative aspects of the rules:
- Guidance would be beneficial on
- on the ability for taxpayers to obtain certainty through informal and formal means, including the level of protection from possible penalties and interest when guidance is provided informally
- the operation of the new decline to rule provisions and examples of scenarios where the Commissioner of Taxation will decline to rule
- penalties, particularly around multiple lodgment obligations
- lodgment obligations for different scenarios, including guidance which confirms the dissemination approach still applies when the ATO invokes local filing.
- Consideration of non-material or dormant entities and whether they can be exempted from domestic tax return lodgment obligations.
- Clarification around how the rules operate in respect of joint ventures and joint operations, particularly unincorporated joint ventures.
- ATO clarification on time to amend or make an objection to an assessment of Australian IIR / UTPR tax or Australian DMTR would be beneficial.
Throughout this session there was a common theme of questions how we can provide specific guidance around Joint Ventures and Joint Operations. The members have highlighted this as a significant issue. To explore ways in which we can provide information, help and assistance to the market, we are considering holding a consultation session to discuss these issues further.
We will also consider developing additional ATO guidance or messaging on engagement channels and guidance on 'decline to rule' scenarios, as part of our information, advice and assistance. As a starting point, we have published general information on the level of protection for different advice and guidance products and how they protect you.