A general update on e-invoicing was provided with a focus on the history, benefits and relationship to GST and the role the ATO plays as both an accredited network user and the Australian Network Administrator. Topics discussed included:
- benefits of e-invoicing
- the security that underpins the system
- adoption of the Pan-European Public Procurement On-Line (PEPPOL) – an open source framework that allows ‘machine to machine’ transactions and time and cost efficiencies
- how to obtain further information.
The members discussed the role of the ATO, benefits and costs.
Treasury and ATO update
A general discussion about the GST system in operation took place focusing on:
- GST on sales of Australian accommodation by offshore sellers
- GST transitional sun-setting regulations
- update on OECD Working Party Number 9 (GST/VAT).
Member discussion focused on the OECD item, noting:
- the success of the Global OECD Forum in Melbourne in March 2019
- the implications of the ‘sharing’ economy
- the value for consumption tax in the crossover with OECD Working Party 10 and Working Party 2 (Collecting and Sharing Data).
GST International Landscape
Discussion about the ATO’s International Landscape included:
- all major platforms and large e-commerce entities are complying in relation to digital products and services and low value goods legislation
- large online market places account for a high proportion of the GST on taxable sales.
- the need for the ATO to continue to monitor compliance with the legislation to ensure a level playing field
- the need for the ATO to communicate the success of the program
- how this work linked into the GST Gap work.
The VAT/GST compliance burden
The Diagnosing the VAT Compliance Burden: A Cross Country Assessment paper, published by the University of New South Wales Business School, was discussed at the meeting. The overview of the paper included:
- the four factors developed to assess a country’s VAT/GST compliance burden
- the survey used to grade each country via the four factors
- the result and country-by-country comparison.
Members considered the insights from the report including the following points:
- the reasons why questions were not focused on monetary values or ratios e.g. VAT:GDP – figures mainly talk to the revenue agencies’ efficiency, rather than the entity burden outlined in the four factors
- could the model include “benefits” adjustment – for example, adding up quarterly GST returns may make annual Income tax returns easier to finalise
- the survey measured ‘relativity’, rather than ‘absolutes’
- is there potential to expand this to include positive impacts on management
- frequent changes of rates (rather than multiple rates) was an indicator of high burden
- it would be interesting to see the revenue office burden compared to the taxpayer burden
- there could be value in looking at event-based burdens (e.g. hiring an employee) to see if certain events had higher burdens.
Risk landscape, ATO measures and GST efficiency
A discussion occurred on risks, macro performance measures, the ATO’s four pillars approach and other risk-based efficiency indicators used in the GST system. The presentation discussed:
- interactions with other agencies and the states and territories
- the percentage of taxpayers that voluntarily comply with their GST obligations
- estimates of the additional tax revenue generated through the ATO’s client engagement activities
- the proportion of the tax reported that the ATO is confident is accurate (tax assured).
- an overview of the trends in taxpayer perceptions of the GST system since 2011 (Kantar Research). The research investigates attitudes, perceptions and behaviours of businesses, tax agents and BAS agents to discover key drivers and barriers for GST compliance.
- There was discussion on the inclusion of end dates on all GST private rulings. The ATO advised members that it expected tax officers to work closely with taxpayers to agree end dates. Members to provide details where this was not occurring.
- Discussion on the issue of GST and tax law partnerships and the adequacy of current public guidance. Another meeting is likely to take place to look further at the complexities and possible solutions regarding this issue.
The next meeting is scheduled for 3 March 2020 in Melbourne.