Category: MIL-OSI

To understand how the ATO can support agents to promote the benefits and adoption of a Strong online access strength (OAS) to compromised individuals within their practice client list.

Encouraging compromised taxpayers to adopt a Strong OAS has the benefits of restoring real-time access to digital services and pre-fill access for registered agents. It facilitates easy access to taxpayers’ superannuation, personal details and ATO mail via their myGov Inbox. The Strong OAS pilot, which commenced in July 2024, aims to leverage the trusted agent-client relationship and the support of registered agents to promote the benefits of OAS to their clients.

Insights and observations from the pilot were used to draft 4 recommendations which will help encourage the adoption of Strong OAS and provide a better experience for agents with compromised clients. The recommendations will be referred to relevant ATO business areas for consideration in future continuous improvement programs.

Scott Bradford, Frontline Business Improvement
Scott.Bradord@ato.gov.au

To seek feedback on proposed changes to foreign resident capital gains withholding (FRCGW) website guidance to ensure the content is clear, relevant, and meets stakeholders’ needs.

The FRCGW regime in Australia requires Australian residents to obtain a clearance certificate from the ATO to avoid having 12.5% of the sale price withheld on property sales of $750,000 or more. Foreign residents have 12.5% withheld, which is paid to the ATO by the purchaser. Without a clearance certificate, Australian residents are treated as foreign residents, and the withholding applies.

Legislative changes to the FRCGW regime were announced in Mid-Year Economic and Fiscal Outlook 2023–24 and will come into effect from 1 January 2025. The key changes include:

• increasing the withholding rate from 12.5% to 15%
• removing the $750,000 withholding threshold
• applying the changes to relevant capital gains tax assets.

These changes are expected to significantly increase the number of clearance certificate applications.

We are updating our website guidance on the FRCGW to reflect the upcoming legislative changes. We are seeking feedback from law and conveyancing professional associations to ensure the proposed content is clear, relevant, and meets stakeholders’ needs.

• Law and conveyancing professional associations

Feedback from targeted consultation on the proposed changes to FRCGW website guidance was invaluable in assisting the ATO to shape and improve our guidance material, ensuring the content is understood and meets stakeholder’s needs.

We provided draft content of the proposed changes and received feedback from stakeholders. This will be incorporated into the content under development, which will be updated in due course.

As part of the consultation, a number of other matters were raised by law and conveyancing professional associations. These will be addressed separately.

Louie Markovski, Superannuation and Employee Obligations
Louie.Markovski@ato.gov.au

To seek feedback on the proposed draft Practical Compliance Guideline from superannuation industry representatives prior to the publication of the draft for public consultation.

Following the outcome from earlier consultation [202407] Delivering Better Financial Outcomes (Quality of Advice) – Recommendation  7, the ATO is developing a Practical Compliance Guideline to provide superannuation funds with a compliance approach in relation to the amendments made to the Income Tax Assessment Act 1997 (ITAA 1997) under Schedule 1 of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (the Act).

The amendments under Schedule 1 of the Act provide a legal basis for payment of advice fees from a member’s superannuation account and clarify the associated tax consequences.

The ATO is seeking feedback on our proposed compliance approach for:

• working out the income tax deduction under item 5 of the table in subsection 295-490(1) of the ITAA 1997
• historical PAYG withholding obligations under paragraph 307-10(e) of the ITAA 1997.

Feedback from superannuation industry representatives will assist to refine and enhance the guidance before the draft is published for public consultation.

• Industry representatives
• Professional associations
• Superannuation funds
• Tax professionals
• Relevant government agencies
  • Australian Securities and Investments Commission
  • Australian Prudential Regulation Authority

Feedback received from the consultation provided valuable insights on the impact of the proposed compliance approach to superannuation funds. These insights will be considered in developing our compliance approach under this draft Practical Compliance Guideline.

Jay Gao, Public Groups
Jay.Gao@ato.gov.au

To seek feedback on proposed website guidance that focuses on informing operators about key tax implications throughout the retirement village lifecycle.

We are seeking to publish web-based content that consolidates existing guidance which identifies tax issues, income tax and GST at each stage of a retirement village lifecycle. This web guidance does not introduce new views and is not intended to cover tax technicalities related to retirement villages. It aims to make taxpayers aware of their income tax and GST obligations using a lifecycle approach.

Minimal feedback was received. Where appropriate, feedback was incorporated into the website guidance.

Rosie Cicchitti, Private Wealth
Rosie.Cicchitti@ato.gov.au

To seek feedback on a prototype digital objection process that has been designed to replace the current paper objection process for individuals.

For individuals to lodge an objection with the ATO, they currently need to download, fill out, and return post or fax a paper form. The ATO digital strategy outlines an aspiration to be fully digital by 2030. To meet this challenge, we are consulting with community members and tax agents to understand their views on a prototype digital objection process that has been designed to replace the current paper objection process for individuals.

Feedback will ensure the design of the prototype digital objection process meets the needs of stakeholders and will assist to identify any areas for improvement.

• Individuals

User research has been considered in the development of digital objections prototypes. Further consultation may take place on prototype iterations in the future.

Dejan Markov, Enterprise Strategy and Design
Dejan.Markov@ato.gov.au

To understand what drives preferences for the retention of paper activity statements and the blockers to transitioning to digital channels.

The ATO digital strategy outlines an aspiration to be fully digital by 2030. To meet this challenge, the ATO is looking to consult with agents around the current and future use of paper activity statements and understand the impediments that may exist to a continued transition towards digital lodgment.

• Professional associations
• Tax agents

Feedback will be used to identify ‘pain points’ in the transition from paper to digital and will guide the development of proposals intended to drive increased digital lodgments and assess the potential impacts on agents.

Steve Windeyer, Frontline Business Improvement
Steve.Windeyer@ato.gov.au

To seek feedback on the instructions supporting Local File/Master File (LCMSF) Schema, Version 4.0, and the updated requirements which incorporate short form local file reporting.

From 1 January 2025, country-by-country reporting entities will use an updated version of the LCMSF service for lodgments, for reporting periods starting on or after 1 January 2024. LCMSF Schema Version 4.0 will incorporate the short form section of the local file into the Message Structure Table.

The ATO will seek feedback on updated Version 4.0 short form local file reporting, including what further clarification or examples may be provided in the reporting instructions. Consultation will ensure the instructions and updated requirements meet the needs of stakeholders involved in the reporting process.

• Large corporations and multinationals
• Tax agents and advisory firms
• Industry bodies
• Digital service providers 

Feedback received from consultation provided valuable insights and suggestions for potential improvements or clarifications to the Local File/Master File Schema Version 4.0 and instructions.

As a result of feedback, immediate changes were made to the Message Structure Table design. Feedback on other issues is being considered and is expected to result in changes to the instructions which are in the process of being finalised.

Emily Worthing, Public Groups
LCMSFversion4@ato.gov.au

To seek feedback on the new self-review guide and checklist for GST classification of products to ensure it meets the needs of taxpayers.

The ATO has developed a self-review guide and checklist for GST classification of products. The self-review guide and checklist is designed to provide taxpayers with practical step-by-step guidance to:

• undertake regular self-review of the GST classification of their supplies
• assess the robustness of business system processes and controls that directly impact the decisions on GST classification of supplies.

Feedback will ensure the self-review guide and checklist meets the needs of taxpayers and will help to identify any areas for improvement.

• Industry representatives
• Advisory firms
• Members of the GST Stewardship Group

Feedback provided some valuable insights which will be incorporated into the self-review guide and checklist for GST classification of products to improve the documents and ensure they meet the needs of taxpayers. The self-review guide and checklist for GST classification of products are available on the Legal database.

Virginia Hernandez, Public Groups
Virginia.Hernandez@ato.gov.au

To seek feedback on proposed additional examples of tax consequences on sales of land, including small-scale land subdivisions.

The ATO is seeking to expand on the published Tax consequences on sales of small-scale land subdivisions by adding to the examples currently on our Legal database.

The proposed expansion will centre around 3 current topical areas:

• properties acquired or held for multiple purposes, including resale for profit
• the circumstances which constitute mere realisation of a capital asset
• carrying on a business of renovating properties, also referred to as ‘property flipping’.

• Private Groups Stewardship Group
• Communication Content Working Group
• Property and Construction Stakeholder Relationship Forum

Feedback was generally positive. Stakeholders found the draft web guidance examples helpful and recommended minor amendments to improve the examples’ effectiveness. Feedback is being considered for inclusion in the updated web guidance.

Andrew Fenn, Private Wealth
Andrew.Fenn@ato.gov.au

To seek feedback to inform potential public advice and guidance on additional tier 1 (AT1) capital note issuances.

AT1 capital is a key element of the capital structure for Australian financial institutions. The ATO receives numerous applications for binding advice through the rulings system on the tax consequences associated with AT1 capital notes for investors and issuers.

There is currently a high level of maturity and consistency in AT1 capital note issuances, including their terms and features and their tax consequences.

The current approach to providing guidance is on a case-by-case basis. The ATO is considering opportunities to streamline guidance on AT1 capital note issuances and is seeking feedback on whether a Taxation Ruling would eliminate or substantially reduce the incidence of class and private ruling requests.

• Financial Institutions
• Industry bodies
• Tax agents and advisory firms

The feedback received provided perspective on the key issues that stakeholders view as requiring consideration in respect of public advice and guidance in relation to AT1 capital note issuances.

On 10 September 2024, the Australian Prudential Regulation Authority (APRA) issued a Media Release announcing a proposal for banks to phase out the use of AT1 capital instruments. In light of this announcement, the ATO will place the project regarding potential public advice and guidance on AT1 capital note issuances on hold, pending the outcome of APRA’s proposal.

Veronica Richards, Public Groups
Veronica.Richards@ato.gov.au

To understand what guidance is required to assist taxpayers with completion of the supplementary annual GST return.

In 2024–25, the ATO is introducing a new supplementary annual reporting requirement for Top 100 and Top 1,000 taxpayers who have received a GST assurance rating through an earlier GST review.

The introduction of the return will enable us to make informed decisions about future engagements with taxpayers and enhance our treatment strategies and ability to monitor GST risks that arise in the large market.

Targeted consultation provided valuable feedback which is being considered and will be incorporated in the design and implementation of the supplementary annual GST return. For more information about the return, see Supplementary annual GST return.

Virginia Gogan, Public Groups
Virginia.Gogan@ato.gov.au

To seek feedback on the 8 recommendations made from the advance pricing arrangement (APA) program review and consider their appropriateness and if additional changes are required to the APA program.

Targeted consultation is required to assess the current state of the advance pricing arrangement program to determine if additional changes need to be implemented following the report recommendations from the APA program review that was completed 30 June 2023.

• Big 4 accounting firms
• Law firm Minter Ellison

Feedback received from the consultations was invaluable in providing the ATO with a better understanding of the market perceptions of the APA Program, including:

• identifying key issues and areas for improvement from stakeholders in the APA Program, particularly following the implementation of the APA review recommendations
• gathering suggested improvements for the APA Program
• providing an indication of how well the ATO is communicating with taxpayers and tax professionals.

The suggestions are being workshopped with internal stakeholders with a view to identifying which proposals can be implemented. Once internal decision-making is complete, these insights will be considered in the updates to the revised APA Practice Statement Law Advice.

Gloria Cassimats, Public Groups
Gloria.Cassimatis@ato.gov.au

To seek feedback on the frequency, usefulness, and preferred delivery channel of the ATO statement of account.

The ATO issues statements of account for a variety of reasons using different correspondence channels (paper and electronic) and is reviewing options to reduce the frequency of automated statements of account.

The ATO is consulting with taxpayers and their representatives to obtain feedback on:

• the current frequency, usefulness, and delivery method of automated statements of account
• proposed options to reduce the number of automated statements of account issued.

• Individual taxpayers
• Small business representatives
• Tax agents
• BAS agents

Feedback confirmed a preference for:

• a reduction in the frequency of statements of account
• electronic delivery channels.

These insights will be considered in the scoping and design of enhancements to the statement of account.

Peter Moore, Strategy and Support
Peter.Moore@ato.gov.au

To seek feedback on the ATO’s proposed view on the appropriate attribution of risk weighted assets to branches for the purposes of applying the thin capitalisation rules for inward investing entities (ADI).

Foreign banks that conduct their banking business in Australia through branch(es) are subject to Australia’s thin capitalisation rules. The rules require a foreign bank to allocate a minimum amount of equity capital to its branch.

Typically, foreign banks use the safe harbour rule to work out their minimum capital amount. The rule is based on ensuring there is sufficient equity capital funding that part of the risk-weighted assets of the bank that is attributable to its branch.

The ATO does not currently have a published view on how to determine that part of the risk-weighted assets attributable to a branch. Feedback will assist in the development of an ATO view on the topic with the aim of providing certainty and a consistent industry approach.

• Foreign banks with branch operations in Australia
• Industry bodies
• Australian Banking Association
• Australian Financial Markets Association
• Tax agents and advisory firms

Feedback received on the Discussion paper Thin capitalisation – attribution of risk weighted assets to Australian branches of foreign banks, which closed on 31 May 2024, is being considered for incorporation into the development of a draft Practical Compliance Guideline.

Johanna Tang, Public Groups
Johanna.Tang@ato.gov.au

To seek feedback on proposed website guidance and examples relating to inbound related party financing by private groups in the property and construction industry.

The ATO is seeking to publish website guidance relating to inbound related party financing by private groups in the property and construction industry including examples of financing arrangements.

Feedback received has been considered and discussed with consultation participants. As a result, the website guidance has been updated to improve the intent and clarity of our public advice and guidance.

Lynette Purcell, Private Wealth
Lynette.Purcell@ato.gov.au

To seek feedback on public advice and guidance needs for the new measure addressing financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993.

The government has announced its response to the December 2022 Final Report of the Quality of Advice ReviewExternal Link by releasing an exposure draft: Delivering Better Financial Outcomes Package – reducing red tape and other measures.

Relevantly, Recommendation 7 seeks to clarify the legal basis for superannuation trustees to charge individual members for financial advice from their superannuation account, as well as the associated tax consequences.

Division 2 of the exposure draft makes amendments to the Income Tax Assessment Act 1997 to ensure that financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993 are:

• tax-deductible for the fund
• not treated as superannuation benefits of the member.

Such fees are tax deductible to the fund to the extent that the amount charged to the member’s account was not incurred in relation to gaining or producing the fund’s exempt income or non-assessable non-exempt income. The measure is proposed to have retrospective effect.

The ATO is seeking feedback on whether there are priority issues where public advice and guidance is needed to help superannuation industry stakeholders understand how the new law applies to their circumstances.

• Professional associations
• Superannuation industry representatives
• Advisory firms

Consultation provided valuable feedback which will be considered in the preparation of future public advice and guidance materials.

Ernest Lui, Public Groups
Ernest.Lui@ato.gov.au

To seek feedback on the ATO’s administrative arrangements for accessing a deceased person’s information, particularly where a grant of probate or letters of administration has not been obtained.

In July 2020, the Inspector-General of Taxation published the report Death and Taxes – An investigation into ATO Systems and Processes for dealing with Deceased EstatesExternal Link.

Recommendation 7(b) of the report recommends the ATO seek feedback on its administrative arrangements for accessing a deceased person’s information, particularly where executors or relatives have not obtained a grant of probate or letters of administration, to determine if the administrative arrangements are satisfactory to external stakeholders or if changes are required.

• Industry representatives
• Relevant government agencies
• Members of

The consultation process identified several proposals for improvements to the administration of deceased estates and the legal framework that supports it.

The administration-related proposals are being workshopped with internal stakeholders with a view to identifying which proposed improvements can be implemented.

The suggestions for improvements that have law implications are being analysed to determine which are suitable for escalating to Treasury for their consideration.

Lloyd Williams, Individuals and Intermediaries
Lloyd.Williams@ato.gov.au

To explore possible valuation methodologies for both electricity and petrol expenses of a plug-in hybrid electric vehicle (PHEV).

Practical Compliance Guideline PCG 2024/2 Electric vehicle home charging rate – calculating electricity costs when a vehicle is charged at an employee’s or individual’s home provides a methodology for calculating electric vehicle home charging expenses. However, the guideline does not apply to PHEVs, which use a mix of fuels (electricity and petrol) to power the vehicle.

The ATO will consult with key tax and electric vehicle experts on whether there is a possible valuation methodology, that provides a reasonable basis to split the kilometres driven fuelled by electricity or petrol for a PHEV.

The purpose of the consultation was to engage subject matter experts and explore whether there is a possible methodology that provides a reasonable basis to split the kilometres driven fuelled by electricity or petrol for a PHEV.

The consultation has confirmed a possible method, which now requires updates to certain public advice and guidance (PAG) products. These updates have recently been noted by the ATO’s PAG Steering Committee (during October) and the ATO is now separately progressing the required updates, which will be consulted on prior to finalisation.

Mark East, Superannuation and Employer Obligations
FBT@ato.gov.au

To understand how, and what types of, ATO macro data could be made available to small businesses to help improve their tax performance.

Small businesses use third-party software, for example accounting software, to manage their business operations, understand and track their financial performance, and meet their tax obligations on time and in full.

The ATO is currently exploring the feasibility of embedding certain macro data and information into small business’ natural digital systems and software. This could include:

• ATO or other government agencies’ benchmark data and benchmark tools
• certain ATO risk rules.

This could assist small businesses and their advisers to:

• identify and understand tax risks and potential processing errors
• make informed decisions on identified tax risks
• compare their financial performance to similar businesses
• build confidence in the ATO’s administration of the tax system.

This is part of Improve small business tax performance, one of the key focus areas in the ATO corporate plan 2023–24. The ATO is collaborating with key stakeholders to build a digital-first tax ecosystem to enable small businesses to better understand their comparative tax performance and identify potential errors or tax risks prior to lodgment. This will help streamline the tax experience and make it easier for small businesses to comply with their obligations.

• Small businesses
• Tax and BAS agents
• Digital service providers
• Financial technology providers
• Tax professional partners
• Small business industry representatives
• Relevant government departments

Feedback has helped the ATO to further understand:

• the need to provide taxpayers with the opportunity to review and correct potential mistakes prior to lodgment
• the need to provide more tax certainty at the right time, removing the need for ATO corrective actions where mistakes have been made
• a potential way to reduce opportunistic or deliberate non-compliance.

The insights captured have supported the creation of a pre-lodgment check concept. This concept aims to provide information to taxpayers where their income tax or activity statement lodgment data does not match or meet ATO expectations. This provides the taxpayer an opportunity to review and correct the information (if necessary) before lodging. The ATO is considering the development of this concept.

Michael Morton, Small Business
Michael.Morton@ato.gov.au

Following stakeholder feedback on PAG topics, prioritisation and form for the new thin capitalisation measures, we will now be consulting on the high priority topics to develop specific PAG products.

On 8 April 2024, the Treasury Laws Amendment (Making Multinationals Pay their Fair Share – Integrity and Transparency) Act 2024 received Royal Assent.

The ATO is proposing to provide guidance setting out the Commissioner of Taxation’s views on, and approach to, key aspects of the proposed new thin capitalisation rules and debt deduction creation rules contained in Schedule 2 of the Act.

Stakeholder feedback is sought on potential topics, prioritisation and the form of any potential public advice and guidance.

It is intended that only the most important issues arising from the new law will be addressed through the preparation of early ATO public advice and guidance.

Targeted consultation provided valuable feedback which has assisted to identify and develop high priority draft public advice and guidance products. In May 2024, we published a list of guidance priorities regarding Amendments to the Thin Capitalisation rules – ATO’s PAG consultation topics and prioritisation. You can keep up to date through the Advice under development program.

Stephen Dodshon, Public Groups
Stephen.Dodshon@ato.gov.au

To seek feedback regarding implementation of the new Sharing Economy Reporting Regime including:

• public advice and guidance
• reporting requirements (data and lodgment).

Schedule 2 of the Treasury Laws Amendment (2022 Measures No. 2) Act 2022External Link requires operators of electronic distribution platforms (EDPs) to report information to the ATO on transactions relating to supplies made through the platform. This measure implements a recommendation of the report of the Black Economy Taskforce.

Under the measure, EDP operators will be required to report transactions that occur on or after:

• 1 July 2023 if it relates to a supply of taxi services or short-term accommodation, and
• 1 July 2024 for all other reportable transactions.

• Operators of EDPs in the taxi, ride sharing and short-term accommodation industries
• Professional associations
• Technical and peak industry bodies
• Tax professional associations

Feedback from consultation provided valuable insights in the development of the Implementation Guide, XML Schema, Legislative Instruments and Explanatory Statement to support Tranche 1 industries with the implementation of the Sharing Economy Reporting Regime.

Vanessa Kelly, Small Business
vanessa.kelly2@ato.gov.au
Phone 02 4223 2851

To test tone and clarity of messaging in a proposed letter to military veterans impacted by changes to the tax and superannuation treatment of specific invalidity benefit payments.

Due to the Full Federal Court decision in Commissioner of Taxation v Douglas [2020] FCAFC 220 (the Douglas decision), the tax and superannuation treatment of specific invalidity benefit payments has changed.

Those affected by the Douglas decision can request remediation to previous year tax assessments through the objection process.

• Tax agents who have military veteran clients who are impacted by the Douglas decision
• Veteran advocacy groups

Consultation provided valuable feedback that has improved the clarity of the letter. Feedback will also contribute to some key changes to website content.

Simon Dann, Objections and Review
simon.dann@ato.gov.au
Phone 07 3149 5754

To seek feedback on the proposed process for Next 5,000 comprehensive risk reviews that are planned to commence in early 2023.

As part of the Next 5,000 program, the ATO will be commencing comprehensive risk reviews in early 2023. These reviews will be a new type of engagement using a risk based approach undertaken by the program, and will complement our existing streamlined assurance reviews.

Tax professionals who engage with the Next 5,000 program

Feedback was considered and incorporated into the process for the Next 5,000 comprehensive risk reviews.

Ashleigh Larner, Private Wealth
ashleigh.larner@ato.gov.au
Phone 08 9268 0901

To explore tax agent views on:

• the level of awareness individual clients have in their superannuation
• appetite to undertake a super health check with individual clients, including during preparation of income tax returns
• tools and resources the ATO could provide to assist with super health check conversations.

Research shows that up to 70% of individuals do not regularly manage their super or check that it’s in order. The ATO would like individuals to have greater awareness about their basic super entitlements and take more ownership and interest in their super earlier and is exploring how we might encourage this.

Tax agents with individual clients

Feedback indicated that individuals’ awareness of superannuation could be improved and that tax time interactions would be a good time for a super health check, which tax agents would undertake with their clients if provided with the necessary support from the ATO. Insights will inform our work on this strategy in the future.

Tara Rischmueller, Superannuation and Employer Obligations
tara.rischmueller@ato.gov.au
Phone 08 8208 2935

To:

• co-design a roadmap to digitalise the tax experience for small business in ways that improve small business tax performance and provide value back to small business
• explore concepts to streamline the tax experience.

Improve small business tax performance and participation by collaborating with partners to build a digital first tax ecosystem, enabling seamless tax reporting from business source systems, is one of the key focus areas in the ATO corporate plan 2022-23.

The aim is to develop concepts that will:

• improve small business tax performance
• create productivity savings for small businesses
• deliver economy wide value from increased permission-based standardised data sharing
• increase participation in and integrity of the tax ecosystem.

Consultation provided valuable feedback which:

• contributed to development of the draft Roadmap to Tax Admin 3.0 for small business
• will be considered in the identification of concepts to streamline the tax experience
• has enhanced ATO’s understanding of the need to ensure changes to technology and the role of people and business processes are integrated, to collectively improve small business tax performance for successful digitalisation of tax administration.

Andrew Watson, Small Business
andrew.watson@ato.gov.au
Phone 08 8208 1826

To understand the retirement village life-cycle (including income tax, GST and commercial aspects) to identify:

• if existing advice and guidance supports taxpayers to meet their obligations
• opportunities to improve the operation of the tax system.

The retirement village industry has materially evolved over the last few years with significant expansion in the sector. The ATO is seeking to understand the impacts.

• Representatives of industry associations who are connected with or have expert knowledge of retirement villages
• Tax and legal professionals

Feedback provided has informed the ATO’s understanding of the retirement village life cycle. These insights will be taken into account in informing potential future engagement with the industry and its advisers.

Rosie Cicchitti, Private Wealth
rosie.cicchitti@ato.gov.au
Phone 07 3213 8073

To seek feedback on the practical application of Practical Compliance Guideline PCG 2018/4 Income tax – liability of a legal personal representative of a deceased person.

The Inspector-General of Taxation and Taxation Ombudsman published the Death and Taxes: An Investigation into ATO systems and processes for dealing with deceased estatesExternal Link report on 7 July 2020.

Part (b) of recommendation 10 in the report recommended that the ATO conduct a post-implementation review of the PCG, in consultation with external stakeholders, to assess its effectiveness in providing sufficient certainty for legal personal representatives to finalise an estate.

• Tax and law professional associations
• Tax practitioners
• Public trustees

Feedback received is being considered for incorporation into the updated Practical Compliance Guideline

Danijela Jablanovic, Individuals and Intermediaries
danijela.jablanovic@ato.gov.au
Phone 07 3213 5864

To understand the capital gains tax (CGT) tools and calculators user experience to identify opportunities for improvement.

The ATO has multiple CGT tools and calculators to support taxpayers in determining their CGT for lodgment of their tax returns.

The ATO is undertaking research to:

• understand current issues, irritants, experiences and behaviours to optimise future CGT tool solutions
• identify opportunities to expand the use of ATO held CGT data to improve the taxpayer experience and compliance in reporting and calculation of CGT gains and losses.

• Individual taxpayers
• Tax practitioner representatives

Consultation provided valuable feedback which will be considered in the development of enhancements to CGT tools and calculators.

Dejan Markov, Enterprise Strategy and Design
dejan.markov@ato.gov.au
Phone 08 8208 3608

To test tone and clarity of messaging in a proposed superannuation guarantee charge letter to businesses and tax practitioners.

If employers do not pay an employee’s minimum superannuation amount on time and to the right fund, they must pay the superannuation guarantee charge to the ATO.

The ATO engages with employers who are not meeting their superannuation guarantee obligations and/or their tax practitioners.

• Small to medium business employers
• Tax practitioners

Feedback provided will be incorporated into the superannuation guarantee charge letter in future communication to clients.

Kate Haymes, Enterprise Strategy and Design
kate.haymes@ato.gov.au
Phone 07 3119 9866

To seek feedback on proposed Legislative Instruments and Explanatory Statements for the implementation of the FBT reduced record keeping budget measure, as published with the Fringe benefits tax – record keeping exposure draft legislationExternal Link consultation on treasury.gov.au

The Fringe Benefits Tax — reducing the compliance burden of record keeping measure was announced the in the 2021–22 Budget.

The measure will provide the Commissioner of Taxation with the power to allow employers to rely on existing corporate records as an alternative to existing requirements. This will reduce compliance costs for employers, while maintaining the integrity of the FBT system.

For consultation on the associated legislation, see Fringe benefits tax – record keeping exposure draft legislationExternal Link on treasury.gov.au

Feedback will be considered in finalisation of the legislative instruments and explanatory statements.

Philip Borrell, Superannuation and Employer Obligations
philip.borrell@ato.gov.au
Phone 02 6058 7881

To co-design the lodgment deferral process in Online services for agents and test the functionality prior to implementation.

The ATO is expanding Online services for agents services to include lodgment deferrals.

The intent is to:

• streamline the lodgment deferral request process
• decrease request processing timeframes
• provide visibility of the progress of requests.

• Tax practitioner representatives
• Digital service providers
• Members of  

Consultation provided valuable feedback which contributed to the design and build of the service and support material.

Felix Manero, Individuals and Intermediaries
OSfALodgmentDeferrals@ato.gov.au
Phone 07 3213 3552

To seek insights to inform guidance that will assist taxpayers in the calculation of their working from home deductions for 2022–23 and future income years.

The temporary shortcut method was introduced to assist taxpayers to work out their working from home deductions between 1 March 2020 and 30 June 2022.

With the cessation of the shortcut method, the ATO is refreshing the fixed rate method for calculating work from home deductions.

Feedback was considered for incorporation into Draft Practical Compliance Guideline PCG 2022/D4 Claiming a deduction for additional running expenses incurred while working from home – ATO compliance approach which was published for public consultation on 2 November 2022.

Lloyd Williams, Individuals and Intermediaries
lloyd.williams@ato.gov.au
Phone 02 6216 1030

To test the tone and clarity of Tax Time 2022 communications for individual taxpayers.

Tax time communications provide taxpayers with guidance to help get it right when preparing their tax return.

The ATO is user testing the communications for individual taxpayers to identify opportunities for refinement to improve the user experience. 

Individual taxpayers 

Feedback provided is being incorporated into future tax time communications to individual taxpayers.

Kate Haymes, Enterprise Strategy and Design
kate.haymes@ato.gov.au
Phone 07 3119 9866

To test the design and functionality of the proposed design of the Modernising Business Registers (MBR) program companies release to identify opportunities for refinement to improve the user experience prior to implementation.

The companies release is part of the modernisation of business registers program, a component of the package of reforms to address illegal phoenixingExternal Link that was announced by government in September 2017 and received Royal Assent on 22 June 2020.

The companies release will provide over 3 million companies with a more streamlined way to register, view and maintain company details using ABRS online.

Consultation will be through a series of phases covering the ABRS website, company registrations, maintenance, and search.

• Community who may use ABRS
• Directors and intending directors
• Company officeholders
• Company administrators and intermediaries
• Tax practitioners
• Business representatives
• Government agencies
• Modernising Business Registers Business Advisory Group
• Modernising Business Registers Design Working Group

Consultation is discontinued. The Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, has announced the cessation of the Modernising Business Registers (MBR) program. The decision follows the Independent Review of the MBR program which was completed in July 2023.

Jonathan Solomon, MBR Program
mbrengagement@ato.gov.au
Phone 07 3213 3183

To seek feedback on the Taxpayers’ Charter.

The ATO is committed to undertaking a regular review of the Taxpayers’ Charter to ensure it remains contemporary and:

• meets community expectations about how the ATO engages with taxpayers in its administration of the tax, super and registry systems
• accurately reflects what our clients can expect from the ATO when dealing with us
• assists staff in their interactions with our clients
• fulfils its purpose of advising the public of their rights when dealing with the ATO.

The Charter should continue to support the ATO’s aim to build taxpayer confidence in the Australian tax and superannuation systems by helping people understand their rights and obligations, improving ease of compliance and access to benefits, and managing non-compliance with the law.

The Inspector-General of Taxation and Taxation Ombudsman made a series of recommendations on the Charter in its 2020–21 Investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal.

• Taxpayers
• Industry associations
• Professional associations, including those representing    
  • business sectors
  • tax and bookkeeping professionals
  • culturally and linguistically diverse audiences
• Members of the    

A high volume of feedback, mainly from accounting, legal, and diverse audiences, identified opportunities to improve the Charter. All feedback will be considered for incorporation into an update of the Charter.

Chris Cook, ATO Corporate
chris.cook@ato.gov.au
Phone 02 6216 6355

To seek insights into agents’ experience and understanding of their role in the integrity of the Enterprise Client Register.

The Enterprise Client Register is the key source of client information used in every client interaction across the ATO.

The ATO will:

• explore differing agent business models and any impact on updating client contact details
• seek to understand the intermediary experience with client contact details
• identify opportunities to improve the user experience.

• Tax agents
• BAS agents

Consultation provided valuable insights into the Enterprise Client Register user experience and identified opportunities for improvement.

Tina Markov, Client Account Services
tina.markov@ato.gov.au
Phone 08 8208 1428

To seek feedback on the advance pricing arrangement (APA) program.

We will be undertaking a review of the APA Program in 2022, with a primary focus on:

• whether the APA product continues provide the right service for all taxpayers
• assuring transfer pricing risk in the most efficient manner possible.

• Taxpayers
• Tax advisory firms
• Tax industry associations
• Other APA program participants

Feedback provided valuable insights which will be used to guide further improvement of the APA Program.

Tien Phan, Assistant Commissioner, Public Groups and International
tien.phan@ato.gov.au
Phone 03 8632 5283

To seek input and insights on a proposed Automatic Exchange of Information (AEOI) self-review guide and toolkit for Reporting Financial Institutions.

The guide will assist and support Reporting Financial Institutions to self-review their internal control framework to ensure they meet AEOI compliance obligations, which cover Common Reporting Standard and Foreign Account Tax Compliance Act obligations.

It will include practical guidance for self-review of core elements:

• AEOI governance
• due diligence
• reporting systems
• data testing.

• Tax practitioners
• Financial institutions

Feedback received was considered and incorporated into the AEOI Self-review guide and toolkit.

Jaydon Beatty, Public Groups and International
jaydon.beatty@ato.gov.au
Phone 02 6216 4158

To seek feedback on:

• the ATO’s preliminary position regarding deductibility, under Division 31, when a conservation covenant is entered into to satisfy environmental approvals for a mining project
• whether public advice and guidance is required and the type of guidance.

Division 31 of the Income Tax Assessment Act 1997 provides for a deduction for the decrease in the market value of land when a perpetual conservation covenant over your land is entered into provided certain conditions are satisfied.

Deductions for the decrease in the market value of the land must be based on a valuation obtained from the ATO.

Valuation requests from taxpayers, in the energy and resources sector, have raised questions about whether taxpayers entering a conservation covenant, to meet environmental approval conditions for mining projects, receive material benefits which would disqualify them from receiving a deduction.

Energy and Resources Working Group

Feedback will be used to guide our communication strategy relating to valuation requests for conservation covenants from Energy and Resources Working Group members.

John Churchill, Office of the Chief Tax Counsel
john.churchill2@ato.gov.au
Phone 03 6221 0258

To seek insights from eInvoicing users and their intermediaries to inform future messaging and engagement activities related to raising awareness and driving adoption of eInvoicing across Australia.

The ATO is leading activities to raise awareness and drive adoption of eInvoicing in Australia. This includes working with businesses, intermediaries, service providers, and all levels of government to understand their current invoicing processes and support them in adopting eInvoicing to realise the economic benefits of eInvoicing.

The ATO will:

• seek to understand the current invoicing process for all stakeholders
• establish current knowledge and awareness levels
• develop supporting materials for various segments and validate their effectiveness.

• Small to medium enterprise businesses
• Tax professionals
• Digital service providers

Feedback provided will be used to shape the ATO’s eInvoicing awareness activities and messaging with intermediaries and small businesses. Insights will also be communicated to accounting software providers to improve future user experiences.

Patrick Brophy, Enterprise Solutions and Technology
patrick.brophy@ato.gov.au
Phone 02 6216 1940

To seek insights to inform the design and build of Online services for foreign investors (formerly known as the Foreign Ownership of Australian Assets Register).

The ATO is developing Online services for foreign investors which will replace and expand upon the existing Foreign Ownership of Water Entitlements Register and Foreign Ownership of Agricultural Land Register. This supports reforms to Australia’s Foreign Investment Framework.

Consultation will consider:

• navigation
• functionality – including but not limited to payments, registration, and maintenance of registration
• usability.

• Foreign persons, or their representative, who apply to acquire or register ownership of foreign assets on their own behalf or for entities
• Solicitors and conveyancers registering for clients

Consultation provided valuable input into the design and build of Online services for foreign investors, as well as shaping the information that will be included in web content and communications.

Rebecca Northey, Public Groups and International
rebecca.northey@ato.gov.au
Phone 02 4923 1900

To seek feedback on paragraph 5 of the Law Administration Practice Statement PS LA 2011/21 Offsetting of refunds and credits against taxation and other debts to provide greater clarity to support ATO staff decision-making and to support taxpayers in self-assessing whether requesting such an offset is appropriate.

Paragraph 5 of PS LA 2011/21 provides guidance to ATO staff where a taxpayer requests to have their refund or credit offset against the tax debt of another entity.

The current guidance does not provide assistance in determining the circumstances in which the criteria would be satisfied for the Commissioner to agree to perform such an offset. For instance, in practice we think it would be rare that paying the refund in this manner would be an efficient, effective, economical and ethical use of public resources for which the Commissioner is responsible.

Tax advisory firms

Feedback provided valuable insights and suggestions for potential improvements to our guidance.

Renae Carter, Small Business
renae.carter@ato.gov.au
Phone 02 9374 2942

To identify, prioritise, and address administrative and interpretative issues that require support to implement the new Corporate Collective Investment Vehicle (CCIV) measure.

In the 2021–22 federal Budget, the Australian Government announced that it will progress the tax and regulatory framework for the CCIV with a commencement date of 1 July 2022.

The new legislation aligns the tax framework for the CCIV regime with the tax regime for attribution managed investment trusts (AMITs). CCIVs will be required to meet similar eligibility criteria as managed investment trusts (MITs). This includes being widely held and engaging primarily in passive investment activities. CCIVs that are not eligible for AMIT tax treatment will be subject to the ordinary trust taxation rules in Division 6 or trading trust rules in Division 6C, as applicable, of the Income Tax Assessment Act 1936.

As a CCIV is a new corporate entity, deemed to be a trust for tax purposes, there are a range of administrative considerations and tax interaction issues to resolve to ensure implementation by 1 July 2022; for example, registration, eligibility, distributions, reporting.

• Advisers with significant managed fund experience
• Representatives from industry associations, including    
  • Financial Services Council
  • Property Council of Australia
  • Law Council of Australia
  • Australian Custodial Services Association

Consultation:

• facilitated identification of operational and administrative issues and provided valuable feedback which contributed to the design and build of the tax administrative framework and support material for the CCIV regime
• provided valuable insights on interpretive issues which will be further considered in the development of public advice and guidance.

Blake Sly, Public Groups and International
blake.sly@ato.gov.au
Phone 02 4923 1814

To understand the impacts that the government announced reform will have on self-assessing income tax exempt not-for-profits (NFPs) and co-design the lodgment process.

Currently NFPs who self-assess their own eligibility for income tax exemption are not required to report their eligibility to the ATO.

In the May 2021–22 Budget, the Australian Government announced reforms to the administration of NFP entities that self-assess as income tax exempt. From 1 July 2023, non-charitable NFPs with an active ABN will be required to lodge an annual self-review return to access income tax exemption, submitting the information they ordinarily use to self-assess their eligibility for income tax exemption.

The ATO will explore:

• how NFPs currently self-assess income tax exempt eligibility
• impacts of the changes on NFPs
• expectations for implementation
• support and guidance NFPs will need through the change.

The ATO will consult the sector to:

• user-test and iteratively refine the new annual self-review return
• co-develop practical support and refresh public guidance

validate the ATO’s administrative approach.

Members of the Tax Practitioner Stewardship Group

The consultation objectives to understand sector impacts and co-design the lodgment process have been successfully achieved. As a direct result of insights and co-design feedback the following enhancements to the taxpayer experience have been implemented:

• streamlining the NFP self-review return from over 20 questions to 5 core questions to determine eligibility for an income tax exemption
• introducing tailored and guided logic and help text to make the return easier to complete
• providing an alternative self-help phone lodgment service for NFPs having trouble accessing the digital return in Online services
• additional time to lodge through to 31 March 2025
• transitional support for taxable NFPs, including
  • concessional due date to lodge and pay income tax return
  • remission of general interest charge and penalties
  • flexible payment plans
  • support to reconstruct tax records
  • focusing on lodgment of the 2023–24 income year and onwards, noting we may take compliance action if we identify deliberate past tax evasion or fraud
• introducing a new non-lodgment advice form for taxable NFPs to meet their income tax return reporting obligations
• providing an NFP governance checklist to assist NFPs in meeting their broader tax and super obligations.

Lodgment data and feedback from the NFP sector have validated that the return is straightforward and takes less than 10 minutes to complete. However, the sector continues to experience challenges updating their Australian business number details and setting up myID and Relationship Authorisation Manager to access the digital return.

The next phase of consultation will focus on supporting the digital onboarding of the sector and lodgment education and support.

Jennifer Moltisanti, Small Business
jennifer.moltisanti@ato.gov.au
Phone 03 9285 1711

To explore the emerging models of Build-to-rent developments in Australia to understand the opportunities to support the industry with their tax obligations.

Build-to-rent is forecast to take off over the next 5 years.

We are seeing growing interest from industry and government with incentives and concessions for Build-to-rent developments increasing.

• Members of the    
• State Government representatives

Consultation provided valuable insights into the Build-to-Rent industry, highlighting the complexity and improving ATO’s understanding of the various Build-to-Rent models and associated tax issues.

Peter Chester, Private Wealth
peter.chester@ato.gov.au
Phone 07 3213 5957

To co-design Digital Services Gateway (DSG) features and Application Programming Interfaces (APIs).

The DSG was implemented in 2021 to enable lightweight APIs to support digital service providers deliver tax and superannuation services.

Digital service providers

Digital service providers shared valuable insights which contributed to the development of DSG APIs.

Sonia Lark, Digital Partnership Office, Enterprise Solutions and Technology
sonia.lark@ato.gov.au
Phone 02 4725 7460