On 3 September 2024, the ATO held an event for foreign–owned financial institutions, to discuss our approach to working with the foreign–owned banking and finance (B&F) industry.
Deputy Commissioner, Fiona Knight opened the event by discussing the important role that large corporates play in the tax system, emphasising that the B&F industry will remain a focus area for Public Groups.
Other key event highlights included discussion from Assistant Commissioner Megan Croaker on what Top 1,000 large public and multinational corporate groups can expect under the Top 1,000 combined assurance program in the year ahead, including the differentiated assurance approach applied. Megan also outlined the ATO's key observations and insights to date for the financial services industry under the Top 1,000 program.
We presented on our income tax and GST approach to the foreign–owned financial institutions sector for the 2024–25 year. This included:
- For income tax
- our focus on transfer pricing, branch attribution, and offshore banking unit transitional issues
- upcoming formal guidance on thin capitalisation risk-weighted asset attribution, and web guidance on reporting taxation of financial arrangements gains and losses for the purposes of the PAYGI rate
- our position on bail–in bonds and the application of Division 974.
- For GST
- Our focus on reliance on prior ATO interactions, specialist lenders and reduced input tax credits on complex IT outsourcing.
- GST reverse charge liabilities, and application of GST apportionment methodologies and how taxpayers can take steps to mitigate against common pitfalls in relation to these risk areas.
Assistant Commissioner Louise Andolfatto and Director Michael Sapuppo discussed the status of our implementation and key aspects of Pillar Two of the OECD/G20 Two-Pillar Solution.
A Q&A panel facilitated by Assistant Commissioner Bill Neskovski drew on insights from panellists. The panellists included the heads of tax from foreign-owned B&F industry taxpayers, and the Australian Financial Markets Association. We discussed our expectations of this market, taxpayers’ experience with ATO review/interactions and current priority tax policy matters.
For more information, you contact us at pgibankingandfinancestrategy@ato.gov.au.
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