ATO Deputy Commissioner Superannuation, James O’Halloran, gave a speech to the ASFA National Superannuation Conference on the Gold Coast on 10 November 2016 where he spoke on the ATO’s perspective on risk and compliance. Some of the points he made included:

  • In relation to the major superannuation reform Bills introduced last week, he said the ATO has already provided advice to the software industry and funds details of the reporting obligations and possible systems changes that may be required for reporting to the ATO. While this reporting information will allow for some scoping work, any final system changes will need to be checked against the final legislation.
  • From the ATO’s perspective, the accuracy of taxpayer accounts and registry information are central to how the ATO works with organisations like ASFA to manage risk and compliance in its role as a co-regulator and administrator and this is an ongoing focus.
  • The risks the ATO is seeking to mitigate through early engagement and behavioural changes include:
    • a risk that super funds fail to fulfill their reporting obligations causing delays and incorrect ATO assessments, culminating in both reduced individual benefits and government revenue;
    • poor or outdated information;
    • the risk to member benefits, and their correct calculations and obligations, be it in the application of superannuation law or income tax law.
  • The ATO continues to review claims for Foreign Income Tax Offset with a specific focus on, but not limited to, TR 2014/7. In particular, characterisation of income; nature of deductions for FITO; and claims of FITO (including apportionment).

In 2015, the ATO sought to move from an approach based on auditing to one of sharing its observations on the accuracy of fund-held data. With the introduction of Fund Diagnostic Reports, Mr O’Halloran said the ATO provided a detailed and personalised report, which measures 13 benchmarks for 261 large superannuation funds. This was followed-up this year by an enhanced Diagnostic Report that incorporated industry feedback. The Deputy Commissioner said 2 highlights of this year’s results are:

  • 55% of funds improved their own diagnostic benchmarks results compared with 2015, and
  • 2 high-risk funds actively engaged with the ATO to reduce their categorisation to being a key taxpayer that demonstrates a willing participation and good governance.

[ATO website – O’Halloran Speech] [LTN 222, 16/11/16]