- On 12 July 2013 the US Department of Treasury published a media release announcing a six month extension to the start of the Foreign Account Tax Compliance Act, (FATCA) which is contained in sections 1471 - 1474 of the Internal Revenue Code and will impose detailed reporting and due diligence obligations on foreign (non-US) financial institutions (FFIs) including Australian institutions. The media release explains that the "six month extension to the start of the Foreign Account Tax Compliance Act (FATCA) withholding and account due diligence requirements will be provided to allow more time to complete agreements with foreign jurisdictions. The six-month extension, to July 1, 2014, will also provide foreign financial institutions (FFIs) with the time necessary to comply with FATCA while helping to ensure efficient implementation of the law." In a previous development, on 11 June 2013 the ATO stated that the Australian Government was continuing ongoing negotiations with the US Administration over an 'intergovernmental agreement', after formal discussions began in November 2012. The intention of the "is to facilitate Australian compliance with FATCA in a way that reduces its overall burden on Australian business."
- On 12 July 2013 APRA released the results of its third survey of stakeholders, with 312 regulated entities responding. The survey, conducted as part of APRA's service charter commitments, "was based closely on a questionnaire developed by both APRA and ASR [Australian Survey Research]" and "contained 45 rated items which used a five-point rating scale, plus a number of multiple choice and open-ended questions." APRA concludes that:
"When compared with previous and very similar surveys conducted in 2009 and 2011, stakeholders' perceptions of APRA have changed very little in terms of item ratings. Overall this is a positive result and on-going validation of APRA's prudential framework, its staff and its approach to supervision."
On 15 July 2013 ASIC registered Class Order [CO 13/752]. According to the Explanatory Statement, "the purpose of this class order is to extend the maximum period of the operation of the principal class order [CO 10/630] for a further 12 months [to 19 July 2014] so as to allow additional time for the proposed amending regulations to be made to implement the refinements announced by the Minister." The refinements to the long term performance reporting regime, found in Regulation 7.9.20AA of the Corporations Regulations 2001 (Cth) and announced by the Minister in February 2010, include:
- the exclusion of exit statements from the regime;
- the exclusion of 'traditional' funds of an insurance nature from the regime; and
- permission for approved deposit funds and pooled superannuation trusts to provide annual reports online.
On 19 July 2013 APRA updated its website to include the following new FAQS in relation to MySuper generally and MySuper insurance issues:
- FAQ 50: What are APRA's requirements in relation to changes in policies associated with a MySuper authorisation application? Are they required to be submitted to APRA when a change is made by the RSE licensee?
- FAQ 51: Can permanent incapacity insurance on an ‘own occupation’ basis be used to support the provision of permanent incapacity benefits to a MySuper member under s 68AA of the SIS Act?
- FAQ 52: If the insurance policy includes additional benefits (e.g. benefits for loss of limb, even where this does not result in permanent incapacity on an ‘any occupation’ basis), can the policy be used to support the provision of permanent incapacity benefits to a MySuper member under s 68AA of the SIS Act?
- FAQ 53: If an insurance policy in respect of permanent incapacity provides for a waiting period (e.g. that in order to be considered for a permanent incapacity benefit, the MySuper member has to be unable to work for a qualifying period of X months), and this is reflected in the terms and conditions upon which the benefit is provided by the fund, will this be a ‘reasonable condition’ within the meaning of s 68AA of the SIS Act?
- FAQ 54: Is it possible for an RSE licensee to satisfy s 68AA in respect of MySuper members by providing self-insured death or permanent incapacity benefits?
- FAQ 55: Where non-conforming insurance is grandfathered by SIS regulation 4.07D, because the member was covered by the insurance prior to 1 July 2014 and continues to be so covered, can the amount of coverage be increased?
- FAQ 56: If the member is covered by non-conforming insurance in fund A prior to and after 1 July 2014 on a continuing basis, and is successor fund transferred to fund B after 1 July 2014, will the non-conforming benefit continue to be grandfathered in fund B under regulation 4.07D?
The ATO has released its Compliance in focus 2013-14 (NAT 74689) document, along with a media release summarising the highlights. According to the media release, "More than 640 million transactions are reported to us annually … we use this to pre-fill returns and detect people trying to avoid their tax and superannuation obligations." The ATO has indicated the following key compliance monitoring areas:
- The superannuation compliance focus for 2013-14 will be "re-engaging people with their superannuation and fund reporting, data and payment standards."
- On-going compliance will focus on the "superannuation guarantee, self-managed superannuation funds and approved auditors."
- Planned activities for 2013-14 include 1,100 checks for SMSF income tax obligations, 15,100 for SMSF regulatory obligations, 160 compliance checks for SMSF auditors, 4,200 audits regarding high risk employers for the superannuation guarantee and 19,500 investigations into complaints from employees about non-payment of super entitlements.
The ATO has also updated the following on its website:
- Rollover Transition-in Timetable
- Ready for super reform - a guide for APRA-regulated super funds. [The page provides guidance for APRA-regulated superannuation funds and their administrators in relation to the implementation of the Stronger Super reforms]
- the Taxation of termination payments page