ATO Reportable Tax Position Schedule – ATO updates its website to encourage a wide interpretation of RTP questions

On 26 June 2018, the Australian Taxation Office (ATO) released an update on the Reportable Tax Position (RTP) Schedule clarifying how the information is used. The system applies to companies and is done through the Commissioner’s power to set out the information he wants in taxpayers’ annual tax returns.

The ATO advised that the RTP Schedule disclosures are used to:

• tailor their engagement to work with corporates on complex high risk arrangements
• identify areas where they need to provide further clarification / certainty on the correct treatment of transactions and complex high risk tax arrangements
• better understand tax risk for taxpayers, industries and the large market
• improve dialogue with corporates about their risk profile and corporate governance
• allow corporates to make informed decisions about positions they have taken or are considering taking that are considered to be high risk arrangements.

This is really just a re-statement of the purpose of the ‘Reportable Payments Schedule’. This system is, however, still difficult/effective, as it requires taxpayers to disclose the tax positions on touchy matters.

The ATO reports as follows.

What’s new

The RTP schedule has been extended to include companies in public or international economic groups with a turnover greater than $250 million for years ending on or after 30 June 2018. Impacted companies have been notified and will be required to lodge an RTP schedule.

We have updated RTP ‘Category C’ to cover additional specific issues that are of a concern to us.

Scope of RTP Category C

Where the Category C question refers to a taxpayer alert, arrangements covered by that question should be interpreted widely and disclosure is required where the arrangement is a type of arrangement or variation of an arrangement described in that taxpayer alert.

FJM 29.6.18

[ATO website: Reportable Tax Positions, 2018 Guide, ‘Category C‘; KPMG 27/6/18; Tax Month – June 2018]

Study questions (answers available)

1. Does the RPS involve a schedule to certain taxpayers’ annual tax returns?
2. Does the RPS help the ATO to monitor tax behaviour that is risky?
3. Does the RPS include questions about arrangements set out in the Commissioner’s ‘Tax Alerts’?
4. Did the Commissioner update his website to congratulate taxpayers for taking a wide view of the questions asked in the RPS schedule, so that he gets wider insight?