Co-chair update
The Australian Taxation Office (ATO) provided an overview of topics to be discussed at the meeting including updates on the status of the Large Business Stewardship Group expression of interest process and the release of Public Groups findings and transparency reports. The Corporate Tax Association (CTA) reflected on work over the past year.
ATO release of transparency data and findings reports
The ATO updated members on the release of the corporate tax transparency report, Research and Development (R&D) tax incentive transparency report and 5 Public Groups findings reports in September and November. The update covered the communications issued, and media coverage and community engagement with the reports, including media enquiries and questions on notice following Senate estimates.
Members provided their observations on the ATO’s management of the reports' releases, and the analysis provided in the reports. Members also made observations on the broader transparency reporting environment including the voluntary tax transparency code and proposed public country-by-country reporting.
Reportable tax position schedule instructions
The ATO informed members of proposed changes to the 2025 reportable tax position (RTP) schedule instructions and sought feedback prior to the instructions being published on the ATO website in December 2024. The ATO also notified members of the proposed inclusion of a question related to a draft Practical Compliance Guideline (PCG) and highlighted that some questions were reviewed to remove duplicate reporting on the short form local file. Members commented on the challenges of reporting if new questions are added after the instructions are finalised.
Large business service offerings
The ATO is working through CTA feedback on issues related to ATO service offerings and has made some improvements in relation to telephony and contact services. A coordinated investigation of the issues continues to enable informed responses to the CTA. Members sought advice on what they can do to assist the ATO on these issues and enquired about processing certificates of residency.
LCMSF Version 4.0 consultation
The ATO provided members with an overview of the consultation process for Local File/Master File (LCMSF) Schema Version 4.0 short form local file instructions and highlighted the key changes proposed. Members sought clarification on when the instructions will be published and made observations on the level of reporting required by businesses that do not have a presence outside of Australia.
Country-by-country reporting exemptions
The ATO consulted members on an updated approach to country-by-country (CbC) reporting exemptions for each of the CbC reporting statements. The updated approach will support the ATO’s implementation of the Australian National Audit Office’s recommendations and aligns more closely with the intent of the Organisation for Economic Co-operation and Development BEPS Action 13 report recommendations.
Members enquired about the reasons for the updated approach and provided feedback on their experiences engaging professional firms to support the process of seeking an exemption. The ATO sought further information from members.
Compliance risk and emerging issues
Time limits for claiming GST and fuel tax credits
The ATO provided an update on the Miscellaneous Tax Ruling on time limits for claiming GST input tax and fuel tax credits. The final version of the ruling will be published on 4 December 2024. The ATO provided a summary of the Commissioner of Taxation’s views outlined in the ruling and some of the practical implications for the ATO and taxpayers. The ATO acknowledged the outcome for some impacted taxpayers is suboptimal and advised it is dealing with those taxpayers on a one-to-one basis.
APA program update
At a previous meeting, members provided feedback on the ATO’s 2024 advance pricing arrangement (APA) program consultation process. The ATO will continue to explore alternative avenues for taxpayers to provide direct feedback on their experiences in the APA program, including taxpayer surveys.
Effective life of depreciating assets
The ATO has made changes to the effective life determination process and improved taxpayer guidance on how to calculate an assets effective life. The annual effective life review process has been replaced with an ‘on-demand’ process where taxpayers may apply for a review by completing the Effective life review application form. Information on how determinations will be made and how taxpayers may apply for a determination has been published on ato.gov.au, see Effective life of depreciating assets.
GST product classification – Supplies of food of a kind marketed as a prepared meal
The updated draft Goods and Services Tax Determination GSTD 2024/D3 Supplies of food of a kind marketed as a prepared meal was published on 16 October 2024. The draft outlines the Commissioner's view on the meaning of food of a kind marketed as a prepared meal by reference to the principles in the Simplot Australia decision. It explains how the key principles from the decision apply across the broad range of products where this issue commonly arises.
The draft provides practical common examples to help illustrate the principles and includes a method statement and compliance approach with examples to assist taxpayers in determining whether salad products are likely to be the food of a kind marketed as a prepared meal. It also outlines the impacts on existing ATO public advice and guidance products, including the Detailed food list public ruling.
The Tax Institute national GST conference
The ATO recently presented at The Tax Institute’s National GST conference on a range of issues relevant to public and multinational businesses, including observations on compliance, key risks, and where compliance programs are headed in the future.
Payday Super program
The ATO provided an update on the commencement of the Payday Super programExternal Link following the government’s announcement of the next steps on how it will proceed to make changes to give effect the program.
From 1 July 2026 super guarantee (SG) contributions will be aligned with the payment of salary and wages. From 1 July 2026, businesses will become liable for the updated SG charge if SG contributions are not received by their employees’ super fund within 7 days of payday.
The ATO has formed a special purpose working group to consult on the program's implementation and will continue to update stakeholders. The Payday Super measure is not yet law and the government is preparing draft legislation which will be released for public consultation.
Members commented that payroll is usually managed outside the tax function of an organisation. The ATO asked for member support to ensure information the ATO provides on Payday Super gets to the relevant areas of their organisation, and that they are reminded of the importance of correct and regular payroll governance now and as we transition to Payday Super.
Thin capitalisation
The ATO gave an update on the progress of public advice and guidance in relation to the new thin capitalisation changes. Consultation on the draft Practical Compliance Guideline PCG (2024/D3) Restructures and the thin capitalisation and debt deduction creation rules - ATO compliance approach closed in early November and the feedback is being considered. The ATO will finalise the PCG in 2025. A draft ruling on third party debt test is expected to be issued shortly and as outlined in the ATO’s advice under development page, it will cover aspects of the third-party debt conditions.
Members enquired about the timing of the PCG and its inclusion in the 2025 RTP instructions, given the PCG is one of a suite of interrelated thin capitalisation public advice and guidance products that are yet to be finalised. Members provided feedback that the examples on the operation of the thin capitalisation changes are welcome, and that further examples on other issues would be helpful.
Treasury update
Treasury updated members on:
- Bills in passage through Parliament, including
- Build to Rent
- Responsible Buy Now Pay Later, which includes public CbC reporting
- Global and Domestic Minimum Tax
- foreign resident capital gains withholding reform consultation
- the passage of the United Nations Framework Convention on International Tax Cooperation, and work program between 2025 and 2027
- the government’s response to the PwC matter, which involved 2 tranches of work
- shorter term responses, for which a lot of work has been completed and legislated
- medium- and longer-term measures, which Treasury is continuing to work through.
The ATO also updated members on the implementation of the public CbC reporting measure.
Promoter penalty laws
The ATO advised members of the work in the Prompters and Tax Exploitation program within the Private Wealth Behaviours of Concern business line. The ATO also gave an overview of the operation of the promoter penalty laws including the conduct to which the provisions apply, the exceptions and recent amendments that came into force on 1 July 2024. The ATO discussed the application of the laws to in-house advisers and the importance of internal controls and governance frameworks. Members noted the need for further guidance around the type of governance and internal controls that could be maintained to manage promoter penalty laws risks for in-house advisors.
Board of Taxation
A board meeting was held in October and included a stakeholder event. The purpose of the session was to hear from digital service providers on the current and potential future role of technology in tax administration, particularly emerging technology that could lead to tax compliance and collection improvements. The final meeting for 2024 is scheduled for early December.
The Board is nearing the completion of its review and recommendations for the Voluntary Tax Transparency Code, which it has overseen since its introduction in 2016. After extensive consultation with external stakeholders, the Board of Taxation will submit its findings to the government. The next phase, focusing on design, will begin in early 2025.
Other business
The ATO will provide members with a summary of highlights for the year and draft list of topics for next year. It was noted that integrity declarations will need to be signed ahead of the first meeting of 2025
Attendees
|
Organisation |
Member |
|---|---|
|
ATO |
Rebecca Saint (Co-chair), Public Groups |
|
ATO |
Fiona Knight, Public Groups |
|
ATO |
Michael Ingersoll, Public Groups |
|
ATO |
Nadia Alfonsi, Public Groups |
|
Australian Retirement Trust |
Ian Roberts |
|
BHP Billiton Limited |
Premila Roe |
|
Big 4 Representative |
Alia Lum |
|
BlueScope |
Irene Filippone |
|
Board of Taxation |
Paul Korganow |
|
Business Council of Australia |
Pero Stojanoski |
|
Corporate Tax Association |
Michelle de Niese (Co-Chair) |
|
Multiplex |
Angela Giunta |
|
Property Council of Australia |
Robert Ward |
|
South32 |
Brian Purdy |
|
The Tax Institute |
Pete Rhodes |
|
Treasury |
Marty Robinson |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Amanda Keeble, Front Line Business Improvement |
|
ATO |
Cathy Purcell, International Support and Programs |
|
ATO |
Gregory Dick, Public Groups |
|
ATO |
Megan Croaker, Public Groups |
|
ATO |
Michelle Allen, Superannuation and Employer Obligations |
|
ATO |
Rebecca Irvine, Public Groups |
|
ATO |
Rowan Fox, International Support and Programs |
|
ATO |
Sarah Taylor, Private Wealth |
|
ATO |
Shuchi Sethi, Private Wealth |
|
ATO |
Stephanie Long, Public Groups |
|
ATO |
Stephen Dodshon, Public Groups |
Apologies list
|
Organisation |
Member |
|---|---|
|
ATO |
Hector Thompson, International, Support and Programs |
|
ATO |
Michelle Sams, Public Groups |
|
Australian Banking Association |
Darren Norman |
|
Australian Energy Producers |
Michael Fenner |
|
Law Council of Australia |
Adrian Varrasso |
|
Treasury |
Diane Brown |