NTLG Reportable Tax Position Sub-committee teleconference on 18 April 2012
On 18 April 2012, Fiona Moore (EY), Mark Bradford (Qantas) and Tony Stolarek (EY), on behalf of the Institute, participated in a teleconference of the NTLG Reportable Tax Position Working Group for an update on the reportable tax position schedule.
The teleconference followed discussion at the March meeting of the NTLG committee, in which representatives had highlighted that with various unenacted measures, taxpayers might have a significant number of measures on which their tax position was based on government announcements which had not yet been translated into legislation.
Also in the meeting, we identified that there may be benefit in the ATO proactively identifying shortcut disclosures in relation to such positions. The concern was expressed in relation to:
- if there was to be any delay in finalising the transfer pricing measures which are operative retrospectively, or
- various TOFA measures and debt-equity measures which had been announced at previous times but as yet were unlegislated.
The ATO noted that there is a page on the ATO website on 'New legislation' which 'allows tax professionals and taxpayers to track the progress of new legislation from announcement through to royal assent, and also covers information about the administrative treatment of retrospective legislation'.
NTLG reportable tax position meeting on 24 August 2011
On 24 August 2011 a meeting of the NTLG reportable tax positions working group was held. Tony Stolarek (Ernst & Young) represented the Institute at this meeting. The following issues were discussed:
- Materiality level required for disclosure of reportable tax positions – broadly it is where an amount is more than 5% of the company’s current tax expense (with a minimum level of $1M and an upper limit of $30M). Further work is being undertaken in relation to how this will apply to Australian multi-nationals, and foreign companies with Australian operations
- Application of reasonable care to reportable tax position statements
- Whether legal professional privilege will be waived if an item is disclosed in a reportable tax position schedule.
NTLG Reportable Tax Position Subcommittee meeting on 15 June 2011
The ATO will send taxpayers who will be participating in the RTP pilot programme a letter this week.
Q1 and Q2 taxpayers will be included in the pilot programme. This is approximately 45-50 economic groups which cover 60 of the top 100 entities. The ATO is still deciding whether or not entities which are related but not included in the economic group will be included in the pilot programme. It excludes early balancers.
The ATO will consider the pilot programme to be successful if they have increased contact with the affected taxpayers during the year (even if all the reportable tax position schedules are blank). That is that taxpayers have resolved issues with the ATO earlier and more frequently than previously - this may result in rulings or indications of risk. If the pilot is successful it is expected that it will be extended to other LBI taxpayers.
The ATO has requested the Law Council to provide further details regarding their concerns about legal professional privilege as the ATO at this stage do not have similar concerns.
NTLG members noted that the reduction in penalties for voluntary disclosures may not apply to items included in the RTP schedule as they were previously unreported and the schedule is not a voluntary report.