Jane Michie FTIA (Greenwoods & Freehills) and Deepti Paton ATIA attended an ATO Consultative Meeting on the ‘Uncertain Tax Positions Project' on Tuesday 19 October 2010. This project focuses on large business taxpayers. It was recently launched by the ATO in conjunction with the anticipated release of proposed amendments to IFRS in respect of uncertain tax positions. It will also consider recent developments in the United States of America where the IRS recently announced a new schedule for reporting ‘uncertain tax positions' disclosed in financial accounts.
The ATO is considering all options for the collection of information on uncertain tax positions, including tailored questionnaires for large higher risk business taxpayers and an additional schedule on income tax returns for large business taxpayers. This project is in its early consultative stages only and is not expected to apply to the large business taxpayer population for two years. However, the ATO is launching a pilot program involving a very small number of large higher risk business taxpayers later this year.
The Taxation Institute is aware of the compliance burden and cost that such disclosure requirements will create for members, and urged the ATO to consider its information requirements and motivation in pursuing this project carefully in formulating the sample questionnaire/schedule.
The attendees at this meeting also discussed what would constitute a "tax position" and what would render a tax position "uncertain" and therefore create a disclosure requirement. The Taxation Institute will participate in ongoing consultation with the ATO on this project.