ATO Practice Statement

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FOI status: This Corporate Management Practice Statement is issued under the authority of the Commissioner and must be read in conjunction with PS CM 2003/01.

1 FOI status: This Corporate Management Practice Statement is issued under the authority of the Commissioner and must be read in conjunction with PS CM 2003/01. Corporate Management Practice Statements are endorsed corporate policy and must be followed by ATO staff. In circumstances where the anticipated impact is likely to result in unintended consequences, matters are to be escalated to the ATO Executive. SUBJECT: PURPOSE: Compliance by ATO Employees with Taxation Obligations To outline the expectation that ATO employees will conform to a high standard with their taxation obligations, and the action that can be taken where this standard is not met. DIRECTION TO EMPLOYEES In accordance with the purpose stated above, all employees in the ATO are directed, for the purposes of subsection 13(5) of the Public Service Act 1999, that they are to comply with their taxation obligations. A failure to comply with this direction may expose an employee to action for breach of the APS Code of Conduct. SUMMARY OF MAIN POINTS There is an expectation that all ATO employees, both existing and prospective, have complied carefully with all their tax obligations and will continue to do so. For prospective employees it will be made a specific condition of engagement that they have: (i) (ii) (iii) lodged income tax returns where there is an obligation to do so (or advise us appropriately that there is not an obligation); lodged an activity statement (where the employee's affairs require this); and discharged all taxation debts, or entered into and comply with an arrangement with the ATO for the discharge of any such debt(s) For employees, existing and future, the Practice Statement formally reinforces the requirement that they carefully comply with all their taxation obligations. Failure to comply, being a breach of the law, could result, in addition to any penalties imposed under taxation laws, in proceedings to determine if there has been a breach of the Code of Conduct. This Practice Statement applies to all taxation obligations of ATO employees including, for instance, those relating to trusts, partnerships and companies where the employee Page 1

2 has obligations. Consideration will be given to the circumstances of the particular situation ATO Employees will, as taxpayers, be treated consistently with the Taxpayers' Charter and Compliance Model, and with our general enforcement approaches as detailed in the ATO Receivables policy. In relation to potential misconduct proceedings, ATO employees will be treated in accordance with normal public service misconduct processes. This Practice Statement does not apply to situations where there is a genuine dispute over the interpretation of the law. Tax staff are entitled to the same rights of objection and review as taxpayers generally. Under Privacy legislation, the Commissioner is not able to use information he has access to as tax administrator, in his role as employer. However, once the tax affairs of an employee become public knowledge, for example, through legal action, the Commissioner can take further action to determine if there has been a breach of the Code of Conduct. Any publicly listed prosecutions for breaches of tax laws by employees will be referred to the Commissioner for consideration in his role as employer. STATEMENT As for all taxpayers, ATO employees have obligations under taxation and other laws administered by the ATO, obligations they generally meet with a high degree of care. As an organisation we must be able publicly to demonstrate our commitment to a high standard of compliance. This includes demonstrating that employees are aware of the implications of their particular employment and ensuring that all outstanding lodgements or debts involving our own employees are actively pursued ATO employees are in a special position of responsibility, trust and service. Because of this, their individual compliance with taxation obligations takes on a new dimension. ATO employees must be careful to comply with their tax obligations to a high standard, not just because they are taxpayers, but because the administration of the tax laws, and the integrity of the tax system, would be undermined if it were otherwise. There is a community and government expectation that those charged with the enforcement of taxation laws for the public good, comply to the best of their ability with these same laws in relation to their personal affairs. There would be a substantial potential for tax compliance in the general community to be eroded if there were to be a perception that the tax administrators themselves do not adhere to these tax laws. More specifically, if an ATO employee was making decisions about things like remission of penalties, where they were also in breach of the same law, there would clearly be a likelihood that the community would see a conflict of interest. 12. Accordingly, this Practice Statement sets out the ATO s policy on this matter. Page 2

3 EXPLANATION 13. Under the terms of this Practice Statement, all ATO employees at any point in time, including SES officers, are required to carefully comply with all relevant taxation matters on an ongoing basis. ATO strategies to examine compliance by employees with taxation laws will take into account this Practice Statement. 14. Compliance with taxation laws includes in particular, having: (i) (ii) (iii) lodged income tax returns where there is an obligation to do so (or advised us appropriately that there is not an obligation); lodged an activity statement (where the employee's affairs require this); and discharged all taxation debts, or entered into and complied with an arrangement with the ATO for the discharge of any such debt(s) These conditions are expected to continue to be met during the entire period of any employment by the ATO. Under Privacy legislation, the Commissioner is not able to use information he has access to as tax administrator, in his role as employer. However, once the tax affairs of an employee become public knowledge, for example, through legal action, the Commissioner can take further action to determine if there has been a breach of the Code of Conduct. Any publicly listed prosecutions for breaches of tax laws by ATO employees will be referred to the Commissioner for consideration in his role as employer. The APS Code of Conduct is set out in s13 of the Public Service Act It requires employees to behave at all times in a way that upholds the APS Values and the integrity and good reputation of the APS. The APS Code of Conduct can be found at Suspected breaches may be investigated and, if they are proven, the employee can be subjected to the misconduct processes set out in s15 of the Public Service Act Under s15(1), the sanctions that may be imposed for a breach of the Code of Conduct are as follows: (a) a reprimand; (b) (c) (d) (e) (f) deductions from salary, by way of fine; reduction in salary; re-assignment of duties; reduction in classification; and termination of employment. Page 3

4 ATO Practice Statement In relation to potential misconduct proceeding, to ensure the processes are implemented with fairness and consistency, and to appropriately protect privacy, suspected breaches of the Code of Conduct for failure to comply with tax obligations will be referred in the first instance to the Official Conduct Team. The Official Conduct Team will coordinate action in accordance with ATO Procedures for Determining Breaches of the Code of Conduct. Sanctions invoked under Code of Conduct investigations, will take into account the express expectations set out in this Practice Statement. The ATO s policy on Determining Breaches of the Code of Conduct can be found on the intranet at As noted in paragraphs 5 and 6, employees maintain the right to request a review of actions relating to a breach of the Code of Conduct, as provided for under Regulation 5.24 of the Public Service Regulations. Details on procedures relating to the Code of Conduct are contained in the current ATO policy, Managing Misconduct - ATO Procedures for Determining Breaches of the Code of Conduct, which can be found through the link in paragraph 21. Prospective ATO Employees, including existing APS employees transferring or being promoted into positions within the ATO Under the terms of this Practice Statement, all offers of employment made on or after 22 September 2003 with the ATO on either an ongoing or non-ongoing basis, will be subject to a condition of engagement that applicants have met the specific tax obligations detailed in paragraph 2. This requirement includes APS employees, (not including current ATO staff and compulsory transfers from other areas of the APS), either transferring into or being promoted into positions in the ATO. Prior to commencement, successful applicants will be required to confirm in writing that they satisfy the conditions in paragraph 2 and that they understand the ongoing expectations. Where any of these requirements are outstanding and there is a legitimate resolution process in place, as provided for in the ATO debt collection policy, it would not necessarily inhibit the employment process. For example, where there is a disputed debt or an extension of time to lodge an income tax return or activity statement, or minor or inadvertent errors, the employment process might not be affected. Ultimately in these situations, the ATO as employer would determine if employment is to proceed. Where during their probation period, new recruits are found not to have met their tax obligations, they will not be employed beyond the probation period. Once employed, breaches of this undertaking and any subsequent breaches will be treated as breaches by an existing employee (discussed above) with the process to consider a possible breach of the Code of Conduct taking into account the undertaking given by the employee prior to engagement. Page 4

5 Contact areas: HR People Systems Management People Active Compliance APPROVAL Approved by: Michael Carmody COMMISSIONER Endorsed by the ATO Executive on 10 September For further information relating to this Corporate Management Practice Statement contact Corporate Directions by addressed to CMPS in Outlook. Page 5

6 DOCUMENT INFORMATION Security Classification: Unclassified Date of Endorsement 10 September 2003 Date of Effect: 10 September 2003 Contact Officer: John B Turner BSL: ATO Relations Section: HR People System Management Office: Waymouth, SA ATO Reference: T2001/ Page 6

Practice Statement PS CM 2004/05 (RM)

Practice Statement PS CM 2004/05 (RM) FOI status: May be released This Corporate Management is issued under the authority of the Commissioner and must be read in conjunction with PS CM 2003/01. Corporate Management s are endorsed corporate