One of the terrific things about living in a parliamentary democracy like Australia is that there are safeguards in place to facilitate transparency of the Australian Government and public services. One powerful tool is the Freedom of Information Act, or FOI, which provides individuals or organisations with the right of access to documents held by many government agencies. By law, most public authorities have to respond to an FOI request within 30 days. Their response will either contain the information requested, or give a valid legal reason why it must be kept confidential. Note that the government agencies may levy charges for locating and making the information available, based on prescribed rates.
Here at Fix the Tax Treaty!, we’ve often wondered whether the Australian Government adequately considered the impacts on Individuals (vs businesses) when negotiating and entering into the Australia – US tax treaty agreements and the FATCA Intergovernmental Agreement (IGA).
We decided to find out!
We recently submitted a number of FOI requests to both Treasury and the ATO in an attempt to learn:
- When last updating the Australia – US Tax Treaty in 2001, what was Treasury thinking in terms of US tax treatment of individual taxpayers? Most importantly, did the negotiators consider possible US double taxation of Superannuation, given compulsory superannuation (ie. the modern Superannuation Guarantee) was introduced in 1992, nearly a full decade before the Treaty update renegotiations took place?
- Has Australia ever sought to clarify the US taxation status of Superannuation; particularly using the treaty processes such as Article 24, Mutual Agreement Process?
- Did the coincident “Australia – US Agreement on Social Security”, the so-called Totalisation Agreements, consider superannuation?
- In 2012, during the review and consultation period prior to entering into the FATCA IGA, the Privacy Commissioner recommended that Treasury conduct a Privacy Impact Assessment (PIA). Was this ever done (we think not)? If not, was there an internal response or close-out?
- Now that the mandated reporting of account information of Australian taxpayers to the US IRS under the FATCA IGA has been in place for several years, is there statistical information available in regards to the depth and breadth of this reporting?
See below for the actual wording of the various FOI requests.
We should hear a response back on the FOI requests before Christmas. We’ll let you know what transpires.
Treasury FOI Requests
FOI 2231 Documents detailing the Australian negotiation objectives, progress, decision making and outcomes of the 2001 amendment (protocol) of the Australian – USA Tax Treaty (effective 1 July 2003). Our interest is only on subject matter pertaining to US tax treatment of individual taxpayers, not businesses. Within this scope, documents of interest include: 1) Negotiation framing, strategy and preparation documents, 2) Proposal evaluations and recommendations, 3) Meeting minutes, 4) Any documents evaluating the impact of the Savings Clause on Australian residents (Article 1, Paragraph 3&4); and 5) Any documents pertaining to discussion of the US tax treatment of Superannuation in regards to the 2001 Tax Treaty amendment process.
FOI 2232 Any documents relating to the clarification of the US tax treatment of Australian Superannuation undertaken pursuant to Article 24, Mutual Agreement Procedure of the Australia – USA Tax Treaty.
FOI 2233 Any documents pertaining to the US income tax treatment of Superannuation in regards to the 2001 Australia – US Agreement on Social Security (Totalisation Agreement).
FOI 2234 Any documents pertaining to a Privacy Impact Assessment (PIA) of the US Foreign Account Tax Compliance Act (FATCA), particularly in regards to actions, response or close-out taken on the specific recommendations, Items 26-29, made to Treasury by the Office of the Australian Information Commissioner (OAIC) submission on FATCA, September 2012. (Reference: https://www.oaic.gov.au/engage-with-us/submissions/intergovernmental-agreement-to-implement-fatca).
Australian Tax Office (ATO) FOI Requests
Any available documents summarising the extent of, or providing statistics or estimates on, the annual ATO report / disclosure of Australian taxpayer information provided to the United States Internal Revenue Service (IRS) as part of the Foreign Account Tax Compliance Act (FATCA) requirements. This includes non-identifying information, by year, such as number of taxpayers reported on, number of accounts, aggregate amounts, average / range of values, country of residence, etc. Ideally, this would be broken down by individual versus entity account.
This is a start. One request may lead to another.
Perhaps: certification documentation of the extent the tax treaty prevents double taxation for Australian tax residents (individuals, not corporations).
The above to the ATO as well
The FOI process facilitates the release of existing documents only. It does not compel the agency to answer questions or create new material. Do you believe that such documentation exists within the ATO and why?
Treasury, not the ATO, was responsible for negotiation of the latest tax treaty in 2001 and one would also think conducting analysis on treaty implications. Request FOI 2231 above should pick up if there was any analysis on the tax treaty impacts on individuals.
Of course, Government could always instruct Treasury to undertake this analysis; talk to your MPs!
I don’t believe such documentation exists. Yet confirmation of that may be useful.