Public advice and guidance community

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This Public advice and guidance community is one of the ways we are engaging with the community to understand the issues that are important to you and to help us better target our advice and guidance solutions.

We want ATO public advice and guidance to be effective in providing certainty for the community and to be targeted to appropriate issues. Early consultation is a key element of our strategy to achieve this.

The Public Advice and Guidance Centre monitors this discussion board but cannot comment on or endorse every post. We offer a range of products to help you understand how the law applies to you. This includes public advice and guidance and private advice and guidance, see Advice and Guidance.

Have your say

Click here to access the 'investment manager regime' or 'home office expenses' forum or you can provide us feedback on what other topics you would like discussed further.

Welcome

This Public advice and guidance community is one of the ways we are engaging with the community to understand the issues that are important to you and to help us better target our advice and guidance solutions.

We want ATO public advice and guidance to be effective in providing certainty for the community and to be targeted to appropriate issues. Early consultation is a key element of our strategy to achieve this.

The Public Advice and Guidance Centre monitors this discussion board but cannot comment on or endorse every post. We offer a range of products to help you understand how the law applies to you. This includes public advice and guidance and private advice and guidance, see Advice and Guidance.

Have your say

Click here to access the 'investment manager regime' or 'home office expenses' forum or you can provide us feedback on what other topics you would like discussed further.

Discussions: All (9) Open (4)
  • We have published Draft Practical Compliance Guideline (PCG) 2017/D16 Propagation arrangements adopted by registrable superannuation entities. The PCG is open for consultation until 2 October 2017.

    This draft Practical Compliance Guideline assists registrable superannuation entities to examine the characteristics of their propagation arrangements to determine the likelihood of an ATO review.

    Once finalised, we propose that it will apply from 1 July 2016 and clarifies the ATO's approach to these types of arrangements for the large superannuation industry. This guidance does not apply to self-managed superannuation funds.

    We invite you to comment... Continue reading
    We have published Draft Practical Compliance Guideline (PCG) 2017/D16 Propagation arrangements adopted by registrable superannuation entities. The PCG is open for consultation until 2 October 2017.

    This draft Practical Compliance Guideline assists registrable superannuation entities to examine the characteristics of their propagation arrangements to determine the likelihood of an ATO review.

    Once finalised, we propose that it will apply from 1 July 2016 and clarifies the ATO's approach to these types of arrangements for the large superannuation industry. This guidance does not apply to self-managed superannuation funds.

    We invite you to comment below to provide feedback on draft PCG 2017/D16 by 2 October 2017.
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  • TD 2017/D3

    2 months ago
    CLOSED: This discussion has concluded.
    Published: Tuesday 11 July 2017

    We have published draft Taxation Determination (TD) TD 2017/D3 – Income tax: Division 7A: can section 109T of the Income Tax Assessment Act 1936 apply to a payment or loan made by a private company to another entity (the ‘first interposed entity’) where that payment or loan is an ordinary commercial transaction?

    The draft TD provides guidance on the application of section 109T of Division 7A of the Income Tax Assessment Act 1936 to ordinary commercial payments or loans made from a private company to an interposed entity. It maintains the view expressed in ATO Interpretative Decision ATO ID 2011/104 (now withdrawn), and also provides our view on the application of section 109T to some of the arrangements described in Taxpayer Alert TA 2016/12 – Trust income reduction arrangements.

    You can access a copy of the draft TD here.

    We’re looking for input from the community on the approach we are taking. In particular we would like your views on:
    • The substantive content of the TD (including the examples)
    • The format adopted in the TD, and
    • Any additional guidance you think is needed on the practical application of the principles set out in the TD.

    The draft TD is open for comment until 26 July 2017.

    Join the conversation here.
    Published: Tuesday 11 July 2017

    We have published draft Taxation Determination (TD) TD 2017/D3 – Income tax: Division 7A: can section 109T of the Income Tax Assessment Act 1936 apply to a payment or loan made by a private company to another entity (the ‘first interposed entity’) where that payment or loan is an ordinary commercial transaction?

    The draft TD provides guidance on the application of section 109T of Division 7A of the Income Tax Assessment Act 1936 to ordinary commercial payments or loans made from a private company to an interposed entity. It maintains the view expressed in ATO Interpretative Decision ATO ID 2011/104 (now withdrawn), and also provides our view on the application of section 109T to some of the arrangements described in Taxpayer Alert TA 2016/12 – Trust income reduction arrangements.

    You can access a copy of the draft TD here.

    We’re looking for input from the community on the approach we are taking. In particular we would like your views on:
    • The substantive content of the TD (including the examples)
    • The format adopted in the TD, and
    • Any additional guidance you think is needed on the practical application of the principles set out in the TD.

    The draft TD is open for comment until 26 July 2017.

    Join the conversation here.
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  • CLOSED: This discussion has concluded.
    We’re seeking feedback on our draft practical compliance guideline (PCG), PCG: Cross-border related party financing arrangements and related transactions. You can access a copy of the draft ruling here.

    This PCG provides guidance on the pricing of both ‘inbound’ loans (where an Australian subsidiary borrows from a foreign shareholder) and ‘outbound’ loans (where an Australian shareholder lends to a foreign subsidiary).

    The guideline sets out the characteristics of arrangements which we are likely to consider high risk. It is also designed to provide more certainty to businesses by identifying arrangements which are likely to... Continue reading
    We’re seeking feedback on our draft practical compliance guideline (PCG), PCG: Cross-border related party financing arrangements and related transactions. You can access a copy of the draft ruling here.

    This PCG provides guidance on the pricing of both ‘inbound’ loans (where an Australian subsidiary borrows from a foreign shareholder) and ‘outbound’ loans (where an Australian shareholder lends to a foreign subsidiary).

    The guideline sets out the characteristics of arrangements which we are likely to consider high risk. It is also designed to provide more certainty to businesses by identifying arrangements which are likely to be considered low risk.

    The purpose of the PCG is to help you understand:
    • how we rate risks related to cross border related party financing arrangements
    • how we make an assessment of your risk rating
    • when we may require greater assurance in relation to a cross-border related party financing arrangement.

    Lower your risk rating

    A lower risk rating will reduce the likelihood of us undertaking assurance checks on your financing arrangements. A rating of green (low risk) will mean we will not dedicate resources to review your arrangement. If you find your rating is not low, we recommend you take necessary steps to restructure or make different financing arrangements. We will be checking self-assessed risk ratings to ensure they’re appropriate.

    Consultation

    We’re encouraging professionals and taxpayers to provide feedback on the draft PCG. In particular we would like your views on:
    • Do you agree with the expectation set out at paragraph 77 of Schedule 1 to the PCG? Are there specific circumstances where this expectation is problematic?
    • Are there particular industries which are disadvantaged by the scoring system used to calculate a risk rating under the ‘Related party financing risk indicator guide’ section?
    • Is the description of the method and how you apply the method to determine your risk zone clear (including the definitions of risk indicators)?
    • Are the exclusions from the application of the PCG at paragraph 14 appropriate? Are there any exclusions that should be removed, or additional exclusions included?
    • Are the exclusions from reporting your risk assessment at paragraph 38 of the PCG clear?
    • Should the PCG emphasise the importance of particular clauses to be included in legal agreements under the ‘Evidencing your self-assessment of your risk zone’ section?
    • Is there sufficient guidance in the ‘Transitioning existing arrangements to ‘Green zone – low risk’’ section?

    Please provide your thoughts on these questions below by 30 June 2017.
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  • We want to make it easier for you to find the information you need on our website and legal database. Through ATO Beta we are trialling new ways for you to navigate intuitively from simple explanations, to examples or detailed reasoning, binding rulings, and the relevant legislation underpinning it all. The layered approach will provide a more seamless delivery of our advice to help you understand your rights and obligations.

    As part of this layered approach, we are making it easier for you to confirm the currency of our content and see how the content has changed over time. Content or version history drop down menus are being added as a way of managing version control on our website, detailing when changes have been made and whether they were minor, major, or legislative in nature.

    We are looking for input from you on two fronts:

    • what trigger points should generate a version on our website?
    • we are looking at two options for presenting version history – which one works best for you?

    Trigger points for generating a version on our website?

    • Are the types of changes listed below the types of changes that you think should generate a version?
    • Would the potential responses provide you with the clarity you need to understand what has changed on the website?

    Let us know by commenting below.

    Type of change Potential response
    Change that impacts the technical accuracy of the content.

    This includes:
    • Legislative change
    • Common law change
    • Change in ATO advice or guidance (including ATO compliance approaches expressed in PCGs)

    Changes can include changes to the entire content on a page, through to changes to a particular paragraph.
    Potential significant change

    This page has significantly changed to reflect [new law (insert act name)/new ATO view (insert ATO view)/a change in the ATO view/ new ATO guidance on how we apply our compliance resources on this matter etc as appropriate]

    What is a [ruling / PCG – include embedded link to page on ato.gov.au explaining what these documents are]?

    Potential minor change
    The paragraph/s about [insert text with embedded link to paragraph/ dot point list] was changed to reflect new law ([insert act name]).

    What is a [ruling / PCG – include embedded link to page on ato.gov.au explaining what these documents are]?

    (In relation to minor changes, version control will allow users to click on a link to navigate to where the has occurred on the page. See video below.)
    Additional guidance added to page because there was a gap in the guidance. Additional guidance in relation to [insert text and embedded link] has been added.
    Guidance removed from the page where content change impacts clients. Guidance on this page dealing with [insert broad statement on content e.g. deductibility of hats, sunscreen and sunglasses] was removed to [reason for removal e.g. improve readability / improve navigation].
    Edits to page to improve readability
    • Rewording of sentences
    • Minor editorial changes (not due to incorrect reflection of ATO view or legislation)
    No response required. Content change does not lead to a change that would impact on our clients.

    Which version of version history would work better for you?

    Would option 1 or option 2 presented in this video work better for you? Is there another way we could present this information for you using the table format? Please let us know by commenting below.

    We want to make it easier for you to find the information you need on our website and legal database. Through ATO Beta we are trialling new ways for you to navigate intuitively from simple explanations, to examples or detailed reasoning, binding rulings, and the relevant legislation underpinning it all. The layered approach will provide a more seamless delivery of our advice to help you understand your rights and obligations.

    As part of this layered approach, we are making it easier for you to confirm the currency of our content and see how the content has changed over time. Content or version history drop down menus are being added as a way of managing version control on our website, detailing when changes have been made and whether they were minor, major, or legislative in nature.

    We are looking for input from you on two fronts:

    • what trigger points should generate a version on our website?
    • we are looking at two options for presenting version history – which one works best for you?

    Trigger points for generating a version on our website?

    • Are the types of changes listed below the types of changes that you think should generate a version?
    • Would the potential responses provide you with the clarity you need to understand what has changed on the website?

    Let us know by commenting below.

    Type of change Potential response
    Change that impacts the technical accuracy of the content.

    This includes:
    • Legislative change
    • Common law change
    • Change in ATO advice or guidance (including ATO compliance approaches expressed in PCGs)

    Changes can include changes to the entire content on a page, through to changes to a particular paragraph.
    Potential significant change

    This page has significantly changed to reflect [new law (insert act name)/new ATO view (insert ATO view)/a change in the ATO view/ new ATO guidance on how we apply our compliance resources on this matter etc as appropriate]

    What is a [ruling / PCG – include embedded link to page on ato.gov.au explaining what these documents are]?

    Potential minor change
    The paragraph/s about [insert text with embedded link to paragraph/ dot point list] was changed to reflect new law ([insert act name]).

    What is a [ruling / PCG – include embedded link to page on ato.gov.au explaining what these documents are]?

    (In relation to minor changes, version control will allow users to click on a link to navigate to where the has occurred on the page. See video below.)
    Additional guidance added to page because there was a gap in the guidance. Additional guidance in relation to [insert text and embedded link] has been added.
    Guidance removed from the page where content change impacts clients. Guidance on this page dealing with [insert broad statement on content e.g. deductibility of hats, sunscreen and sunglasses] was removed to [reason for removal e.g. improve readability / improve navigation].
    Edits to page to improve readability
    • Rewording of sentences
    • Minor editorial changes (not due to incorrect reflection of ATO view or legislation)
    No response required. Content change does not lead to a change that would impact on our clients.

    Which version of version history would work better for you?

    Would option 1 or option 2 presented in this video work better for you? Is there another way we could present this information for you using the table format? Please let us know by commenting below.

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  • CLOSED: This discussion has concluded.
    We’ve released an updated ruling on Corporate Residency.

    You can access a copy of the draft ruling here.

    We’re looking for input from the community on the approach we are taking. More information on this topic can be found here.

    In particular we would like your views on:
    • The substantive content of the ruling
    • The new format adopted by the ruling; and
    • Any additional guidance you think is needed on the practical application of the principles set out in the ruling. For example, issues or examples, that could be addressed in Practical Compliance Guidelines.
    Join the conversation here.
    We’ve released an updated ruling on Corporate Residency.

    You can access a copy of the draft ruling here.

    We’re looking for input from the community on the approach we are taking. More information on this topic can be found here.

    In particular we would like your views on:
    • The substantive content of the ruling
    • The new format adopted by the ruling; and
    • Any additional guidance you think is needed on the practical application of the principles set out in the ruling. For example, issues or examples, that could be addressed in Practical Compliance Guidelines.
    Join the conversation here.
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  • The ATO is seeking industry feedback about the relative importance of providing ATO guidance on the Investment Manager Regime (IMR). The IMR was enacted to attract foreign capital and to support the Australian funds management industry to export their services internationally. As part of implementing this policy, the ATO is committed to providing a contemporary service to support our Australian fund managers. We wish to allocate our resources in line with community priorities and needs and therefore seek you views on whether this is an area that would benefit from ATO guidance in 2017.

    Do you agree? Please comment below or show your support by liking any existing comments.
    The ATO is seeking industry feedback about the relative importance of providing ATO guidance on the Investment Manager Regime (IMR). The IMR was enacted to attract foreign capital and to support the Australian funds management industry to export their services internationally. As part of implementing this policy, the ATO is committed to providing a contemporary service to support our Australian fund managers. We wish to allocate our resources in line with community priorities and needs and therefore seek you views on whether this is an area that would benefit from ATO guidance in 2017.

    Do you agree? Please comment below or show your support by liking any existing comments.
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  • We are in the process of updating 2000 ATO rulings that are now out of date. One of those is on Home Office Expenses (Taxation Ruling TR 93/30). A lot has changed in the way we work since 1993.

    We are looking for your insights on how we can make this ruling more helpful, improve and modernise examples etc.
    We are in the process of updating 2000 ATO rulings that are now out of date. One of those is on Home Office Expenses (Taxation Ruling TR 93/30). A lot has changed in the way we work since 1993.

    We are looking for your insights on how we can make this ruling more helpful, improve and modernise examples etc.
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  • CLOSED: This discussion has concluded.
    Project Refresh is an initiative to modernise the ATO’s public rulings.

    We have produced a large number of public rulings over many years. Although most are current, many have not been updated in a very long time.

    We are modernising our stock of public rulings under Project Refresh to ensure they are up to date. This is not to change the ATO view expressed in the ruling, where the view is still current. Taxpayers and their advisers should have no doubts about the currency of our view, and what law that view is based upon.

    We will also be looking to review the examples in our rulings, so they remain contemporary and reflect current business practices.

    We are currently examining IT 2350 (Value of Trading Stock on Hand at End of Year) and TR 92/18 (Bad Debts) and are looking for your assistance in reviewing these rulings.

    We would appreciate:
    • insights on whether we have identified the key aspects of the rulings that require updating;
    • identification of additional matters requiring our focus; and
    • thoughts on how we can ensure the ruling reflects current business practices, including by the inclusion of examples that reflect current business practices.

    With respect to IT 2350 we note that the ruling refers to the former trading stock provisions in the ITAA 1936 and needs to be updated to reflect the new provisions in Div 70 of the ITAA 1997.

    In relation to TR 92/18 we have to date noted the need to update the ruling for 1997 act provisions; to specifically note in the ruling that it does not consider bad debts associated with traditional securities, or bad debts within the context of Division 230. There will be a need for updates for case law as well including Pope v FCT [2014] AATA 532.

    Please let us know your thoughts by 24 April.
    Project Refresh is an initiative to modernise the ATO’s public rulings.

    We have produced a large number of public rulings over many years. Although most are current, many have not been updated in a very long time.

    We are modernising our stock of public rulings under Project Refresh to ensure they are up to date. This is not to change the ATO view expressed in the ruling, where the view is still current. Taxpayers and their advisers should have no doubts about the currency of our view, and what law that view is based upon.

    We will also be looking to review the examples in our rulings, so they remain contemporary and reflect current business practices.

    We are currently examining IT 2350 (Value of Trading Stock on Hand at End of Year) and TR 92/18 (Bad Debts) and are looking for your assistance in reviewing these rulings.

    We would appreciate:
    • insights on whether we have identified the key aspects of the rulings that require updating;
    • identification of additional matters requiring our focus; and
    • thoughts on how we can ensure the ruling reflects current business practices, including by the inclusion of examples that reflect current business practices.

    With respect to IT 2350 we note that the ruling refers to the former trading stock provisions in the ITAA 1936 and needs to be updated to reflect the new provisions in Div 70 of the ITAA 1997.

    In relation to TR 92/18 we have to date noted the need to update the ruling for 1997 act provisions; to specifically note in the ruling that it does not consider bad debts associated with traditional securities, or bad debts within the context of Division 230. There will be a need for updates for case law as well including Pope v FCT [2014] AATA 532.

    Please let us know your thoughts by 24 April.
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  • Safe harbours

    6 months ago
    CLOSED: This discussion has concluded.
    The ATO is continuing to work with the tax profession to identify areas for potential safe harbours and we are seeking community feedback on areas where you think we should consider providing safe harbours.

    A 'safe harbour' may be described as conduct that is taken to comply with a rule or law. Safe harbours determined by an administrator may represent practical approaches to complying with a statutory provision.

    In appropriate circumstances, the Commissioner may make sensible resource allocation decisions consistently with safe harbour approaches and express those approaches in practical compliance guidelines (PCGs). You can see our PCGs issued to date here: www.ato.gov.au/pcg.

    Safe harbours can provide certainty and compliance savings for taxpayers in the face of provisions that are otherwise uncertain in their application or impose unexpectedly heavy compliance cost burdens. From the ATO's perspective, safe harbours can provide an efficient and consistent means of assessing levels of taxpayer compliance, allowing the ATO to direct its compliance resources to higher risk areas of the law.

    Safe harbours are not mandatory. A taxpayer may choose whether to use a safe harbour.

    So far, the ATO has worked with the tax profession to consider safe harbours in a range of areas, including Goods and Services Tax, Excise, Fringe Benefits Tax, Transfer Pricing, Small to Medium Enterprises, and aligning tax and accounting treatment.

    We’re seeking community input on other areas in which we should explore safe harbours and welcome your feedback by 5 May 2017.
    The ATO is continuing to work with the tax profession to identify areas for potential safe harbours and we are seeking community feedback on areas where you think we should consider providing safe harbours.

    A 'safe harbour' may be described as conduct that is taken to comply with a rule or law. Safe harbours determined by an administrator may represent practical approaches to complying with a statutory provision.

    In appropriate circumstances, the Commissioner may make sensible resource allocation decisions consistently with safe harbour approaches and express those approaches in practical compliance guidelines (PCGs). You can see our PCGs issued to date here: www.ato.gov.au/pcg.

    Safe harbours can provide certainty and compliance savings for taxpayers in the face of provisions that are otherwise uncertain in their application or impose unexpectedly heavy compliance cost burdens. From the ATO's perspective, safe harbours can provide an efficient and consistent means of assessing levels of taxpayer compliance, allowing the ATO to direct its compliance resources to higher risk areas of the law.

    Safe harbours are not mandatory. A taxpayer may choose whether to use a safe harbour.

    So far, the ATO has worked with the tax profession to consider safe harbours in a range of areas, including Goods and Services Tax, Excise, Fringe Benefits Tax, Transfer Pricing, Small to Medium Enterprises, and aligning tax and accounting treatment.

    We’re seeking community input on other areas in which we should explore safe harbours and welcome your feedback by 5 May 2017.
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