Changes to the ATO's Reportable Tax Position Schedule: Part 3

Changes to the Reportable Tax Position Schedule Part 3

Ross Hocking, Divyansh Sharma and Melissa Bader discuss the ATO's Reportable Tax Position Schedule amendments.

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The Australian Taxation Office (ATO) has made further amendments to the 2017 Reportable Tax Position (RTP) Schedule and its Guide to Reportable Tax Positions 2017.

The first notable change is to expand Category C to include four additional questions (there are now 15) relating to the following issues that are concerning to the ATO:

  • Participation in an arrangement described in Taxpayer Alert TA 2017/1 which involves an arrangement where a corporate tax entity makes payments to the flow-through trust entity, in circumstances where both entities have substantially common owners
  • Entering into transactions involving activities registered under the R&D tax incentive using an arrangement described in Taxpayer Alert TA 2017/3
  • Disclosure of a self-assessed outcome in accordance with Schedule 1 of the Practical Compliance Guideline PCG 2017/D4, in circumstances where there is a financial arrangement involving cross border related party debt funding; and
  • Disclosure under specific subcategories where there is governance and/or claims for exploration expenditure deductions, with reference to the Practical Compliance Guideline PCG 2016/17.

Second, the exemption from lodging the RTP schedule previously available for taxpayers in an Annual Compliance Agreement (ACA) has been revised. Such taxpayers will now need to provide full disclosure and engage in constant dialogue with the ATO in relation to all their material tax matters, including any positions that fall within any RTP category as part of their ACA to qualify for the exemption.

Furthermore, the ATO has provided additional clarification on the application of administrative penalties, which apply where the taxpayer either makes a statement that is false or misleading, including omissions or failures to lodge on time. Significant global entities (SGE) will be subject to increased administrative and failure to lodge penalties from 1 July 2017.

The ATO currently notifies a taxpayer if they are required to lodge a RTP schedule. The ATO plans to extend the RTP requirements to companies in economic groups with turnovers above $250 million and with income years ending on or after 30 June 2018.

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