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10 Oct 13 The ATO's role in tax law design and expressing ATO views - PS LA 2013/4

On 10 October 2013, the ATO issued Practice Statement PS LA 2013/4 entitled "The Australian Taxation Office's (ATO's) role in tax law design and expressing ATO views as part of the law design process".

The purpose of the Practice Statement is to explain:

  •  the ATO's role in tax law design
  • the participation of ATO personnel1 in tax law design, in particular as it relates to how draft law might operate once it is enacted.

The ATO's role in tax law design is described as follows:

"10. Within the framework set out in the Protocol, the ATO's role in tax law design is to provide high quality input into the development of tax policy and law. It does this by contributing its views and experience, particularly in relation to the administrative impacts of proposed changes to the law. This recognises the principle that tax policy and law should take administrative issues fully into account. Included within these administrative impacts and issues is that part of tax administration which relates to the interpretation of the laws which the ATO administers.

11. More specifically, the ATO's input within the tax law design process will involve providing advice to Treasury on the administrative and interpretative aspects of proposed tax laws.

12. In relation to providing the ATO's input on interpretative aspects of tax law, Treasury will provide the ATO with the intended policy objective of a particular measure, and the ATO will provide its views as to whether it considers that the draft law achieves that objective. This still recognises that it is OPC which must be satisfied that draft law is legally effective to implement government policy.

13. The nature of the ATO's input into the process may include commenting on drafting instructions, draft law and explanatory memoranda, and may involve direct discussions with OPC where appropriate. The ATO's input into tax law design extends to the passage of the law through the Parliament.

14. Under the parameters of the quality assurance process set out in the Protocol, the ATO will also provide assurance at the time that draft law is to be introduced into Parliament that the Bill as drafted can be administered and interpreted in accordance with the underlying policy intent."

However, the Practice Statement emphasises that it is only after the law is enacted that the ATO can provide binding advice on its interpretation of the law.

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