Practice Statement Law Administration

PS LA 2004/6

Giving advice on proposed changes to the tax law before royal assent or registration on the Federal Register of Legislation

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This Practice Statement sets out the principles for dealing with external enquiries about proposed changes to tax laws or regulations.

1. What is this Practice Statement about?

Proposed changes to the tax law may generate requests for information or advice from taxpayers. This Practice Statement sets out what advice or guidance you can provide to taxpayers where:

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proposed changes to the tax law have been publicly announced

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announced changes will or may apply before the proposed law or regulation has received royal assent or is registered on the Federal Register of Legislation (FRL)

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there are proposed changes to the tax law that have not been publicly announced.

2. General principles for dealing with enquiries on proposed law changes

Proposed laws and regulations may change before royal assent or registration on the FRL. After the Australian Government announces its intention to change the law, the outcome anticipated may change as a result of community consultation. Additionally, draft legislation can be amended by Australian Parliament. Our approach is to avoid giving advice or guidance that may mislead a taxpayer. The general principles to follow are:

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Do not give indicative interpretative advice on legislation before its royal assent or on regulations before their registration on the FRL (see section 4 of this Practice Statement).

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Give advice on existing law as it stands, even if it will be affected by the announced measures. You should qualify your advice to note that there is the prospect of a law change which, if enacted, may affect the advice. Refer only to the source document that announced the proposed law change and adhere to its wording (see section 4 of this Practice Statement).

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Never mention or discuss proposed changes to the law that have not been publicly announced.

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Assist taxpayers with their enquiries by quoting or providing publicly released materials and information, such as

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media releases

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draft legislation

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draft explanatory memoranda.

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Use scripts or other approved materials prepared for the measure.

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If you are uncertain about what the approved materials are, you can contact Policy, Analysis and Legislation (PAL) (see section 7 of this Practice Statement).

The following paragraphs set out more detailed instructions for specific circumstances.

Also see the table in Attachment A to this Practice Statement for a summary of how to respond to enquiries at each stage of law design.

3. The taxpayer raises issues or concerns with an announced proposal for law change

A taxpayer may raise significant concerns or issues on such matters as:

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the policy intention of the proposed law

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interpretative issues

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unintended consequences

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risks to the revenue

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the timing of implementation

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effect on compliance costs

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areas of uncertainty in the law.

Try to get a clear understanding of the taxpayer's concerns and pass the information on to the project manager responsible in the first instance. PAL may also provide assistance (see section 7 of this Practice Statement).

If the issues raised by the taxpayer have significant policy or administrative implications, the matter may need to be referred to Treasury. In these cases, discuss this with the enquirer and arrange to follow up their concern. If the taxpayer's purpose was to raise policy issues, our undertaking to refer the issues to Treasury may satisfy them. Treasury also invites members of the public to make comments on draft legislation as part of the public consultation process.

4. Delaying advice for new measures

It may be sensible to delay issuing advice if royal assent or registration on the FRL is imminent and certain (for example, when a Bill has passed and is waiting to receive royal assent). This will allow the advice to reflect the proposed changes to the law, and therefore manage the matter on hand accordingly.

Discuss the case with your manager and the project team responsible for the measure.

Discuss the proposal to delay advice with the taxpayer and explain that this will allow the advice to cover the changes in the law.

5. When the proposed law will apply before the date of royal assent or registration on the Federal Register of Legislation

Administrative problems may arise when a proposed law or regulation change has an application date before its royal assent or registration on the FRL. This is commonly known as a retrospective law change.

Where practicable, the way we intend to administer retrospective legislation will be communicated to affected taxpayers. More broadly, it may be published on our website. In these circumstances, the Policy Implementation Committee (PIC) in PAL will endorse the proposed administrative strategy prior to it being communicated to taxpayers.

If you require further assistance, you can contact PAL (see section 7 of this Practice Statement).

6. Law design processes

We are involved with Treasury at all stages of the process of developing law, as set out in the ATO – Treasury Protocol (see section 7 of this Practice Statement).

The protocol sets out the process between the 2 agencies for tax design.

When new measures are proposed, the PIC considers:

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the most appropriate course of action for both the ATO and taxpayers affected by the process

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any administrative problems likely to arise when application dates and royal assent or registration on the FRL do not coincide

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the form of any general advice that can be provided to taxpayers about the changes to the law.

PAL helps business lines and the responsible project team to prepare appropriate information for taxpayers about the changes.

These are submitted to the PIC for consideration and approval.

If you receive enquiries about new measures and do not know what the communication strategy is, or whether one is needed, you can contact PAL (see section 7 of this Practice Statement).

7. More information

For more information:

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see ATO – Treasury Protocol

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contact PAL at LegislativeGovernance@ato.gov.au

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see Business line PAG unit contact details (internal link only)

Attachment A

Appropriate responses at each stage of the law design process

Where proposed changes to the tax law have not been announced:

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Do not refer to unannounced changes.

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All advice must reflect the existing law.

Amendment history

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Date of Issue: 1 May 2004

Date of Effect: 7 May 2004

File 04/5549; 04/5557; 04/5559

Other References:
ATO-Treasury Protocol (link only available internally)
Connect with your Relationship Manager (link only available internally)
Public Advice and Guidance – BSL PAG Unit contacts (link only available internally)

Business Line:  PAL

ISSN: 2651-9526