ATO advice to Professional Firms Working Group as of 28 June 2018
Thank you for your continued input and participation as a member of the Professional Firms Working Group. Your suggestions continue to provide valuable insights which provide a richer understanding of the issues and have assisted in enabling us to progress the review of issues concerning the professions.
Themes during consultation: We acknowledge the approaches put forward by you during consultations. These have assisted in addressing the compliance concerns which have become evident post the issue of the currently suspended Guidelines. We note common themes among the suggested approaches to deal with our concerns have included:
- A focus on whom the guidelines apply to
- Maintaining a structurally neutral approach
- Maintaining a focus on economic outcomes,
- Maintaining the benchmarks in the suspended Guidelines as they are both relevant and useable
- A need to provide clarity relating to the high risk features raised by us, and
- Guidance should address and distinguish between the ‘getting into’ a structure and its ongoing operation.
We have attached in draft form some content for the ‘gateway’ approach, which both addresses our concerns and recognises the broad approach proposed by the members. Our current intentions is that the content, post consultations relating to it, will form part of a broader guideline document, or suite of documents, and addresses the areas of focus of discussion during our consultations to date which warrant further detail and clarification.
The content relates to:
- The definition of professionals, thereby providing clarity relating to those who are eligible to access the guidelines
- Factors to be considered in determining the commercial rationale for the adoption and operation of a particular structure
- Details of high risk features which, where present in an arrangement, would preclude access to the risk assessment guidance
Discussion of this content will form part of the agenda for the meeting of the Working Group on 4 July.
FJM 12.7.18
[ATO/LCA/LIV, 3.7.18; Related TT Article; Tax Month – July 2018]
Check your understanding (answers available)
- Is the ATO trying to establish a ‘gateway’ definition of ‘professional firms’?
- Has a theme of the consultation been on a structurally neutral outcome and on economic outcomes?
- Will the ATO leave dealing with ‘high risk’ features until a later time?