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.