The Tax Institute is the most respected and influential contributor to the development of tax policy and administration in Australia. As part of this contribution, we prepare top level submissions on tax policy, administration and technical matters at both Federal and State levels. Non-confidential submissions prepared from 1996 onwards and covering legislation, ATO and Treasury consultative documents and papers, as well as rulings, determinations and a range of other ATO opinion and guideline documents, are available here.
20 Jan 2022
The Tax Institute welcomes the opportunity to make a submission to the Treasury in relation to the exposure draft legislation to extend the power of the AAT to pause or modify ATO debt recovery action (Consultation). Our comments below relate to the Treasury Laws Amendment (Measures for Consultation) Bill 2022: Increased Tribunal powers for small business taxation decisions (Bill) and the Explanatory Memorandum.
The Tax Institute supports the Government’s policy intention of ‘making it easier for small business to pause debt recovery action’.1 However, we have concerns in respect of the drafting of the Bill which we do not consider gives effect to the policy underpinning the measure.
We have had the benefit of reviewing the submission prepared by the Business Law Section of the Law Council of Australia (LCA). The Tax Institute wholly endorses and supports the LCA’s submission. Please consider the LCA’s submission to be a reflection of our concerns regarding the Bill as currently drafted, and our recommendation of the preferred approach contained therein to ensure the Government’s policy intention of ‘Making it easier for small business to pause debt recovery action’ is met.
14 Jan 2022
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the consultation paper on streamlining transfer cap event-based reporting arrangements for self-managed super funds (the Consultation Paper).
In the development of this submission, we have consulted with our National Superannuation Committee to prepare a considered response which represents the views of the broader membership of The Tax Institute.
The Tax Institute broadly supports a simplified transfer balance account reporting (TBAR) system for self-managed super funds (SMSFs). We consider that SMSFs should be encouraged to report regularly, but note the need to ensure that SMSF trustees are not placed under an excessive compliance burden. Our comments below broadly follow the questions in the Consultation Paper.
08 Dec 2021
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) as part of the consultation and review of Practical Compliance Guideline PCG 2019/5: The Commissioner’s discretion to extend the two-year period to dispose of dwellings acquired from a deceased estate (PCG).
Broadly, the PCG has provided a practical and useful guide for taxpayers seeking clarity around the operation and application of s 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997). The PCG is a valuable resource and has enabled the administration of many estates to be undertaken in a more timely and cost effective manner.
However, there are some areas that we consider could be further improved.
08 Dec 2021
The Tax Institute welcomes the opportunity to participate in the Australian Taxation Office’s (ATO) consultation on understanding approaches to working with vulnerable clients to identify opportunities to improve the client experience (the Consultation).
The Tax Institute is supportive of the ATO’s intention to better identify vulnerable clients and create opportunities to improve their client experience. Broadly, the ATO has a positive and proactive approach for assisting taxpayers impacted by natural disasters and other challenging personal circumstances with regards to lodgments and other time sensitive deadlines, such as responding to requests for information.
However, we consider that further work can be undertaken to ensure that that all vulnerable clients are appropriately identified and provided with more tailored assistance throughout all stages of their interactions with the ATO.
We have had the benefit of reviewing the submission prepared by the Business Law Section of the Law Council of Australia (LCA). We wholly endorse and support the LCA’s submission. Please consider the LCA’s submission to be a reflection of our views regarding the ways that the ATO can better identify and assist all vulnerable taxpayers.
26 Nov 2021
The Tax Institute welcomes the opportunity to make a submission to the Senate Legal and Constitutional Affairs Committee (the Committee) in relation to its inquiry titled The performance and integrity of Australia’s administrative review system and the associated Terms of Reference (the Inquiry).
Terms of reference for the inquiry are broad and encompass many important aspects of Australia’s administrative review system. We have focused our comments primarily on the operation of the Administrative Appeals Tribunal (The AAT), given the importance of the AAT in the resolution of tax disputes.
The AAT plays a crucial role in the review and administration of Australia’s tax system. The AAT’s review of decisions and outcomes allow applicants the opportunity to have adverse decisions reviewed by a trusted and wholly independent tribunal. This ensures that the authority given to administrative bodies is regulated and exercised in a consistent and lawful manner with the appropriate oversight. The AAT also acts as an important pathway for resolving disputes, significantly reducing the number of tax cases escalating to litigation in the court system.
As a result, it is imperative that the AAT is supported to ensure that it operates in an equitable and efficient manner. To achieve this, the AAT needs to be appropriately funded and resourced to handle cases in an impartial and expedient manner. Further, steps should be taken to increase transparency and accountability over AAT matters, while ensuring the AAT is a low cost and informal environment that encourages taxpayers seek a review of adverse decisions. We are also of the view that the Administrative Review Council (ARC) should be re-instated.
18 Nov 2021
We welcome the Government’s announcement in the Federal Budget 2021–22 to address issues within Australia’s individual tax residency rules. We are writing to address the issues and concerns raised by our members with us regarding the recommendations made by the Board of Taxation (the Board) in its 2019 report 'Reforming Individual Tax Residency Rules – a model for modernisation’ (the Report).
The Tax Institute is supportive of the development of a model to replace Australia’s current tax residency rules where the reform brings certainty and simplicity for affected individuals, employers and the Australian Taxation Office (ATO) while maintaining the integrity of the system. We recognise a diverse range of views on the merits of reform of the individual tax residency rules
throughout our committees and the broader membership of The Tax Institute. However, it is our opinion that the recommendations of the Board, if implemented, will lead to unintended outcomes while unnecessarily increasing the compliance burden for many.
17 Nov 2021
Based on feedback from our members, and their concerns about the lack of technical guidance on the meaning of affiliate following the withdrawal of former Taxation Ruling TR 2002/6 Income tax: Simplified Tax System: eligibility – grouping rules (STS affiliate, control of non-fixed trusts) (the Ruling), The Tax Institute is writing to highlight the need for practical guidance from the Australian Taxation Office (ATO) on this subject.
The Ruling provided guidance on the application of the non-fixed trust control rule and simplified tax system (STS) affiliate under former Division 328 of the Income Tax Assessment Act 1997 (ITAA 1997). Following the repeal of the STS, the Commissioner withdrew the Ruling without replacement on the basis that it related to a now-repealed regime and had no ongoing relevance.
Although we agree that the original basis for the Ruling is obsolete, The Tax Institute considers that the withdrawn guidance about STS affiliates provides useful and contemporary guidance generally about the definition of an affiliate which remains a relevant concept in the current tax law.
16 Nov 2021
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the draft Legal Professional Privilege (LPP) Protocol dated September 2020 (Draft Protocol).
In the development of this submission, we have consulted with our National Large Business and International Technical Committee, National Dispute Resolution Technical Committee and National SME Technical Committee to prepare a considered response which represents the views of the broader membership of The Tax Institute.
LPP is a fundamental right of all clients, including taxpayers, who seek legal advice. The Tax Institute recognises that the ATO requires access to certain information in order to effectively administer the tax system. It is important for the Draft Protocol to ensure the right balance is achieved between these principles in a way that will support taxpayers to exercise their rights, while facilitating ATO access to relevant information, where appropriate.
Taxpayers must be able to trust that LPP will generally remain inviolate, so that they can seek legal advice with full transparency. If this assurance is not provided, taxpayers may be discouraged from seeking advice, or from being fully transparent with their legal advisers. This may lead to taxpayers adopting incorrect or more aggressive tax positions, withholding important information from advisers, or taking actions without the benefit of advice on the legal implications.
12 Nov 2021
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the following Draft Taxation Determinations (Draft TDs):
- TD 2021/D2: Income tax: aggregated turnover — application of the ‘connected with’ concept to partnerships, foreign hybrids and non-entity joint ventures (TD 2021/D2);
- TD 2021/D3: Income tax: aggregated turnover — application of the ‘connected with’ concept to corporate limited partnerships (TD 2021/D3); and
- TD 2021/D4 Income tax: aggregated turnover — application of the public entity exception to the indirect control test (TD 2021/D4).
In the development of this submission, we have consulted with our Small and Medium Enterprises, and Large Business and International, National Technical Committees to prepare a considered response which represents the views of the broader membership of The Tax Institute.
02 Nov 2021
The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to the Decision Impact Statement - Commissioner of Taxation v Glencore Investment Pty Ltd (DIS).
The decision in Commissioner of Taxation v Glencore Investment Pty Ltd (Glencore) is of interest to taxpayers because it provides practical guidance on the approach to, and categories of, evidence they must produce to show that a transaction was on arm’s length terms for the purposes of transfer pricing. Compliance with the arm’s length requirement for transfer pricing purposes is a factually difficult area of the law and requires a significant investment of resources by taxpayers to ensure that they can satisfy the relevant evidentiary standards.
The Tax Institute is of the view that the Glencore case provides opportunities for the ATO to provide greater clarity on these matter in the DIS. We consider that advice or guidance by the ATO that clarifies or reduces this evidentiary burden can significantly reduce taxpayer compliance costs. It will also ensure taxpayers provide only relevant information to the ATO, thereby potentially reducing administrative resources required by the ATO to examine arm’s length transactions for these purposes.