Meeting theme
The theme of the meeting was Consultation.
Key highlights
- Treasury provided an update on the:
- The ATO outlined the way it maintains and minimises the risk of confidential information being used incorrectly. Members were encouraged to provide feedback on additional practical guidance to assist ATO consultation leads engage effectively with participants involved in confidential consultation.
- The proposed implementation of the annual integrity declaration for National Tax Liaison Group (NTLG) members and other ATO stewardship groups was discussed.
- Members shared their reflections on the effectiveness of the NTLG as a stewardship group, particularly in relation to its role overseeing ATO consultation matters.
- Specific ATO consultation matters were discussed, including:
- progress on the new ato.gov.au website
- current consultations
- completed consultation matter
Opening comments
Kirsten Fish, Second Commissioner, Law Design and Practice Group, ATO; Peter Godber, The Tax Institute.
NTLG Co-chair Kirsten Fish and external Co-chair Peter Godber welcomed members.
Members welcomed the opportunity to discuss consultation matters.
Treasury
Diane Brown, Deputy Secretary, Revenue Group; Laura Berger-Thomson, First Assistant Secretary, Personal and Indirect Tax and Charities Division, Revenue Group, Treasury.
Treasury provided a brief update on the following matters:
- The 2023 Intergenerational ReportExternal Link has been completed. This report is ordinarily undertaken every 5 years and projects the outlook of the economy and government’s budget to 2062–63.
- The Employment White PaperExternal Link is due to be released later this year. This paper will provide a roadmap for Australia to build a bigger, better trained and more productive workforce.
Treasury also provided an update. on the government’s response to the disclosure of confidential information by PwCExternal Link.
Members indicated their support for measures to strengthen the integrity of the tax system, including increased tax promoter penalties and expanded legislation. These changes will increase the maximum penalties for advisers and firms who promote tax exploitation schemes and make it easier for the ATO to apply the promoter penalty laws to those advisers and firms involved.
Members questioned new legislation to strengthen the Tax Practitioners Board (TPB) and the additional funding boost provided to the TPB to increase compliance activities in the October 2022–23 Budget. Treasury confirmed the change provides the TPB with increased powers to pursue those who do not uphold the integrity of the tax system.
Treasury also confirmed the Multinational tax integrity and enhanced tax transparency (PDF 515KB)This link will download a file (MNE) matter is still before the Senate Committee and would ordinarily be debated in Parliament after a Committee reports. Members noted the delay causes uncertainty for taxpayers and suggested the ATO consider developing an MNE road map or guide to assist companies to transition.
Proposed matters for consultation
Fiona Dillon, Chief Tax Counsel, Office of the Chief Tax Counsel; Sean Beven, Assistant Commissioner, ATO Corporate; Claire Miller, Assistant Commissioner, Enterprise Solutions and Technology; Sarah Hassen, Assistant Commissioner, Public Groups; Scott Woods, Director, Public Groups; Rhys Manley, Assistant Commissioner, Policy, Analysis and Legislation; Harjit Singh, Assistant Commissioner, Office of the Chief Tax Counsel, ATO.
New ato.gov.au
The ATO provided an update on the progress of the new ato.gov.au website. The current website sits on an aging platform which is approaching the end of service life. The ATO is progressing to deliver a new website in late 2023.
The new website will deliver improved search functionality and tools. The process has been data driven, user tested, and co-designed with a diverse audience.
The ATO will move to a private ‘Beta’ stage (a validation period where the website is extensively tested to obtain live feedback) before moving to public Beta stage in late 2023.
Members questioned whether historical versions of ATO information will be available on the new site. The ATO confirmed this was considered, but the information will not be available due to technological limitations. Members noted this can pose difficulties for tax professionals who rely upon website guidance, as opposed to formal guidance from the ATO.
Members asked whether the ATO’s virtual assistant (Alex), could be upgraded to offer further assistance to experienced tax professionals. The ATO confirmed this service will remain as is, however acknowledged the usefulness of integrated chat bots. Members offered to work with the ATO to demonstrate how an upgraded virtual assistant could improve the user experience.
Capital management advice and guidance
The ATO analyses advice requests received as part of the Public Groups advice and guidance program with the view to improving its services and providing certainty for taxpayers.
As part of this work, insights and key observations regarding the Public Groups and International Advice and Guidance program were published for the first time in 2022 (2019–20 to 2021–22 years). The ATO will publish a report later this year to include the 2022–23 year.
The ATO has recognised an ongoing high level of demand from listed public groups and international businesses for similar rulings on particular capital management topics. In recognition of this, the ATO published a consultation paper in late June 2023 to explore opportunities to improve Public Advice and Guidance (PAG) products by:
- considering the reliance and usefulness of existing PAG
- exploring potential for new PAG or updates to existing PAG.
The objective of the consultation is to determine whether new or updated PAG could result in efficiencies for taxpayers, advisers and the ATO. It is anticipated that improvements will result in either:
- a decreased need for clients to approach the ATO on a one-to-one basis (that is, a decreased need for rulings) where sufficient certainty could be provided via PAG
- a more efficient ruling processes because taxpayers and advisers are clearer on the application of the law to the facts.
The ATO has received written submissions from stakeholders and will seek to have discussions over the coming months with those who have indicated a desire to engage further.
Ideas for PAG improvements will be identified through the consultation and prioritised if they meet the objectives of a reduction in one-to-one rulings or a more efficient ruling process. The ATO will then undertake the usual PAG development and approval process applicable to the relevant product.
Members acknowledged the work undertaken to deliver the Public Groups and International Advice and Guidance program report and suggested the report's objectives and findings could be further clarified to maximise its usefulness.
Multinational tax integrity and Tax transparency measures
The ATO outlined the steps it is taking to generate and evaluate ideas and develop future PAG related to the proposed multinational tax integrity and tax transparency measures.
The ATO confirmed a variety of stakeholders have made submissions on the measures to Treasury and the Senate Committee.
In preparation for the measures, a high-level PAG consultation plan is being developed by the ATO, which includes tentative timeframes and engagement with potential stakeholders.
The ATO advised it is continuing to monitor the need for guidance and acknowledged there are several possible areas for early discussions.
The ATO encouraged members to consider topics requiring priority attention to assist with the transition once the measures have been passed. The ATO acknowledged the importance of further collaboration with members and other stakeholders to produce high quality PAG products at the right time.
Action item |
NTLG 2308/1 Multinational Tax integrity engagement plan |
Status |
In progress |
Responsibility |
Rhys Manley, Assistant Commissioner, Policy, Analysis & Legislation & Harjit Singh, Assistant Commissioner, Office of the Chief Tax Counsel |
Description |
The ATO is to return to the NTLG with a high-level plan / timeline outlining the preparation of Public Advice and Guidance (PAG) relating to the multinational tax integrity measures. Members will be invited to provide feedback on the plan. |
Potential suggestion for consultation
Justin Byrne, Mia Clarebrough, Law Council of Australia, Fiona Knight, Deputy Commissioner, Litigation and Legal Services, Office of the Chief Tax Counsel, ATO.
Members identified that lawyers representing taxpayers can have difficulty communicating with the ATO in a timely manner. This is because they do not have access to the tax agent portal and rely on a specific form that must be faxed (digitally) to the ATO. Members observed the fax does not route directly to the ATO officer dealing with the issue which causes delays between sending and receipt.
The ATO agreed it is important to make it easier for lawyers to prove their authority to act on a client's behalf. However, providing portal access to the law profession is not a solution as it would pose various risks.
Members noted they are open to further discussion with the ATO on how to resolve this issue and will source relevant external stakeholders. The ATO will provide further information regarding the limitations of processes and any relevant system constraints that might impede resolution of this matter prior to further discussions.
Action item |
NTLG 2308/2 - Potential consultation with the Law Profession |
Status |
In progress |
Responsibility |
Fiona Knight, Deputy Commissioner, ATO |
Description |
Members identified difficulties that law professionals experience when communicating with the ATO. This stems from a lack of access to the ATO portal and reliance on submitting issues to the ATO via a digital fax. |
August update |
In progress |
Description |
Members suggested a workshop with the ATO to resolve or improve the process, but initially seek to understand options (and associated timeframes) the ATO may be able to provide to law professionals. The ATO will identify possible options and system constraints to provide to members for further discussion. |
Effectiveness of consultation processes
Elizabeth Hardcastle, Assistant Commissioner, Individuals and Intermediaries; Anthony Bach, Assistant Commissioner, Office of the Chief Tax Counsel, ATO.
Tax deductions - fees paid for financial advice
The ATO is developing a taxation determination (TD) on deductions for fees paid for financial advice that will broaden and replace Taxation Determination TD 95/60 Income tax: are fees paid for obtaining investment advice an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for taxpayers who are not carrying on an investment business? which was originally released in 1995 and last updated in 2012.
The purpose of this ATO consultation matter was to seek feedback on the proposed draft TD prior to publication of the draft for public consultation.
The ATO reflected that feedback from the 28 participants involved in the consultation indicated the consultation process was effective overall. The ATO considers there was sufficiently broad representation from relevant industries involved in the consultation. Overall, the objective and scope of the consultation matter was clear and, once completed, the outcome reflected the intent.
Of the participant feedback provided, a few areas of potential improvement were identified, primarily in relation to communication. Members identified that the scope of the consultation could have been made clearer at the beginning of the consultation matter and reinforced throughout the consultation. It was further observed that the timing of stakeholder involvement and suitability and expertise of participants should have been given additional consideration. The ATO acknowledged that timing can sometimes be difficult, and there were instances where participants were provided with an extension of time because of feedback.
Effectiveness measures for consultation
Kate Wilson, Assistant Commissioner, Enterprise Strategy and Design, ATO.
Action item |
NTLG 2308/3 - effectiveness measures |
Status |
In progress |
Responsibility |
Kate Wilson, Assistant Commissioner, Enterprise Strategy and Design |
Description |
This item was removed from the agenda at the August NTLG due to time constraints. It will be discussed at an out of session meeting with interested members. |
August 2023 update |
In progress The ATO will arrange a meeting with interested members and relevant ATO stakeholders. |
Integrity declaration
Kirsten Fish, Second Commissioner, Law Design and Practice; Jane Ferry, Deputy General Counsel, ATO Corporate, ATO.
The ATO met previously with NTLG members to discuss the proposed annual integrity declaration and worked with members to incorporate changes and develop the current integrity declaration template.
The draft template was provided to members for internal governance purposes prior to the August NTLG meeting. Members noted they were comfortable with the current draft template but requested additional time for each organisation’s risk area to review before signing.
Implementation of the integrity declaration
Kate Wilson, Assistant Commissioner, Enterprise Strategy and Design, ATO.
The ATO outlined the proposed implementation of the integrity declaration and welcomed member suggestions to aid the rollout process. It is intended that the integrity declaration will apply to all members of ATO stewardship groups, this has been mentioned at stewardship group meetings throughout 2023.
The implementation of the integrity declaration is part of the ATO’s governance processes and is not meant to be onerous. It is envisaged that the finalised integrity declaration will be signed by NTLG members by the end of September, subject to approval processes, then repeated annually.
Members acknowledged the need to implement the integrity declaration but questioned how the integrity declaration would affect them on a practical level. The ATO welcomed member feedback and further discussion to clarify these issues.
Members also questioned whether a proxy would sign an integrity declaration if their attendance at a meeting is more than ad hoc or one-off.
Member reflections on the role of the NTLG
All members.
Members had differing views on whether the level of oversight of consultation matters was sufficient and whether the breadth of coverage had changed since the Consultation Steering Group (CSG) role had been folded into the NTLG. It was noted that the CSG met 3 times per year for a half-day meeting whereas the NTLG meets for 2 full-day consultation focused meetings per year.
The ATO observed that members had not nominated many completed consultation matters for discussion at the February and August consultation meetings.
Members questioned whether a subsidiary group should be created to consider completed consultation matters (to include members who were directly involved in the consultation).
Members commented they had observed a shift in ATO consultation leads being increasingly proactive in managing consultation matters and being empowered to do so.
Action item |
NTLG2308/4 - Reflection on consultation processes |
Responsibility |
Kirsten Fish, Second Commissioner, Law Design and Practice |
Status |
In progress |
Description |
As part of a mid-year reflection on the NTLG’s effectiveness in consultation matters, members suggested a subsidiary group should consider completed consultation matters on a regular basis. |
August 2023 update |
In progress At the August meeting, members identified the following matter to be discussed – Central management and control test of residency The ATO will consider whether it is appropriate to implement a subsidiary group. |
Confidential consultation
Nicholas Shizas, Assistant Commissioner, ATO Corporate; Kate Wilson, Assistant Commissioner, Enterprise Strategy and Design, ATO.
The ATO confirmed it is reviewing its current confidentiality agreement template and is considering changes. Such changes may include developing optional clauses for inclusion into the template.
Members suggested the ATO and Treasury use the same template, as this would potentially provide time efficiencies for participants. Members noted the need for a deed which contains a clear purpose and supported the development of additional clauses.
Members questioned whether the ATO could consider reverting to the use of a draft watermark in confidential material, instead of making the matter confidential. The ATO noted that certain confidential consultation matters must remain confidential. These matters usually relate to issues where messaging to the public needs to be tightly controlled and generally involve tight timeframes. In situations where consultation provides evidence that changes are required, timeframes may need to be extended.
Members were encouraged to provide additional feedback for the ATO to consider in developing the confidentiality agreement template.
Action item |
NTLG2308/5 - Confidential consultation |
Responsibility |
Julie Abdalla, The Tax Institute |
Status |
In progress |
Description |
At the August NTLG, members suggested providing additional information to assist with development of the confidentiality agreement, that is sample scenarios. |
August 2023 update |
In progress Members will collate information to provide to Nicholas Shizas (Assistant Commissioner, ATO Corporate) and Julia Webb (Senior Adviser, ATO Executive) for further consideration. Please cc NTLG@ato.gov.auThis link opens in a new window |
Action items update
NTLG2302/1 – Revision of the integrity declaration
The ATO and members have worked together to re-draft the integrity declaration template. NTLG members were invited to provide further feedback on the draft.
At the August meeting, it was agreed that the integrity declaration template was finalised.
NTLG2304/1 – NTLG Consultation feedback
At the April NTLG, members provided observations regarding some recent tax policy consultation processes undertaken by Treasury. Members confirmed that they would provide written feedback to Treasury.
At the August NTLG, members confirmed further information had been provided to Treasury. The item is to be kept open.
Potential 2023 meeting themes
Members agreed the remaining themes of the 2023 NTLG meetings to be:
- Service Delivery
- Dispute Resolution.
Attendees
Organisation |
Attendees |
|---|---|
ATO |
Kirsten Fish, (Co-chair), Law Design and Practice |
ATO |
Dominic Gilbert, Office of the Chief Tax Counsel |
ATO |
Jeremy Hirschhorn, Client Engagement Group |
ATO |
Jodi Williams (Secretariat), Enterprise Strategy and Design |
ATO |
Kate Wilson, Enterprise Strategy and Design |
Chartered Accountants Australia and New Zealand |
David Watkins |
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 |
Justin Byrne |
The Tax Institute |
Jerome Tse |
The Tax Institute |
Peter Godber (Co-chair) |
The Tax Institute –Professional Bodies Coordinator |
Julie Abdalla |
Treasury |
Diane Brown |
Treasury |
Laura Berger-Thomson |