Accountants respond to ATO plan to broaden its ‘reportable tax position’ for those who control businesses with more than $250m revenue

This article is more than 10 months old

This article is more than 10 months old

Rich Australians lobbied the tax office to exempt some of their companies from increased scrutiny, according to submissions from their accountants seen by the Guardian.

The calls were contained in submissions to an Australian Taxation Office consultation into the broadening of its “reportable tax position” (RTP) program.

The RTP program already requires large public companies and multinationals to reveal their exposure to a laundry list of issues – including offshore sales hubs, exotic financing arrangements and R&D spending.

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Under the broadened program, rich Australians who control businesses with total revenue of more than $250m a year will be required to provide information about any of their companies with turnover of $25m a year or more.

In submissions provided to the Guardian by the ATO, accountants painted their clients as dependent on tax advisers to prepare their returns and grappling with complex corporate structures that included multiple companies, trusts and family members with differing interests in the underlying business.

Accounting group CPA Australia and accounting firm Pitcher Partners said the $25m threshold should be doubled to $50m a year.



However, in its submission accounting firm BDO told the ATO the move was “reasonable as it aligns it with public companies and foreign owned groups and creates a level playing field for similar sized entities/groups”.

The ATO is believed to have a similar position.



Big four accounting firm KPMG said the ATO should provide more guidance on how the threshold would apply, complaining that the current reporting arrangement might result in double-counting of income from a family trust.

Rival big four outfit EY also pointed to complex structures as a problem, and sought to exempt the top-level investment companies through which many rich families receive income from their holdings from the program.

The firm gave as an example a family structure with three individuals controlling varying stakes in four companies through two different trusts.

However, it is believed that the ATO has little sympathy for this complaint.

Large private groups have long fought moves to increase transparency in the sector, including by claiming public disclosure of tax information would put the rich at risk of kidnapping.

Following the consultation process the ATO decided to put off the extension of the RTP program into the large private sector by a year.

However, the deputy tax commissioner, Tim Dyce, told the Guardian the decision to put back the program a year was made by the ATO because it needed more time to prepare the questions it wanted to ask.

He said large private groups would now face additional questions on tax topics that fall under the ATO spotlight during the coming year.

“We’re keen to get this going as soon as practical but it’s not practical yet,” he said.

“We want it to work properly, right from the beginning.

“It’s starting next year, bigger and better.”

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All of the submissions to the consultation said the start date should be pushed back a year.

The ATO’s consultation paper “underestimates some of the challenges (for possibly a significant group of large private businesses) in just working out if they will need to file an RTP or not,” accountancy body Chartered Accountants Australia and New Zealand said in its submission.

The large private sector is a focus for the ATO, due in part to community concerns that rich Australians might not be paying any tax.

As the Guardian revealed last month, a company controlled by Australia’s richest man, Anthony Pratt, has paid little tax since 2013 despite making profits of about $340m since then.

It is understood the ATO will release tax gap data, showing the difference between the amount of tax paid by the sector and the ATO’s estimation of how much should be paid, in the new year.