On 12 January 2016, the Australian Taxation Office (ATO) issued in final its guidelines on taxpayer engagement with the ATO in relation to the recently released Multinational Anti-Avoidance Law (MAAL) provisions in the MAAL Client Experience Roadmap (Roadmap).
The guidelines outlined in the Roadmap are an inducement by the ATO for taxpayers potentially impacted by the MAAL provisions to engage with the ATO to discuss the application of the tax provisions to their particular circumstances.
The ATO is offering significant reductions of potential penalties for taxpayers who contact the ATO before 31 March 2016 and engage in discussions with the ATO on how the MAAL provisions may apply.
The ATO has designated 5 categories of MAAL taxpayers, each with different potential penalties should MAAL be found to apply. There are significant incentives to taxpayers to engage with the ATO as early as possible.
The Roadmap is a clear indication that the MAAL provisions have a much wider ambit than originally anticipated, with the number of taxpayers potentially impacted by MAAL now much greater than the 30 companies originally targeted.
The Roadmap could be seen as a means of reducing the work load of the ATO to identify taxpayers affected, given the likely additional strain on the ATO’s resources in dealing with these new provisions.
KPMG considers that in most cases it will be in the interests of taxpayers potentially impacted by MAAL to engage with the ATO early to achieve some certainty as to whether the MAAL provisions will apply to their circumstances.