2017 Annual investment income reporting AIIR Presented by

2017 Annual investment income reporting (AIIR) Presented by Third Party Data Management & Pre-fill Team, Australian Taxation Office / June 2017

Overview Ø Reporting requirements Ø System readiness Ø Key changes Ø Supporting documentation Ø 2017 AMMA/SDS – guidance notes for trustees Ø Pre-fill Ø More information UNCLASSIFIED – 2017 Annual investment income reporting 2

Reporting requirements Ø Available specifications: − Electronic reporting specification (ERS) version 11. 0 − Electronic reporting specification (ERS) version 10. 0 − PC spreadsheet format version 5. 0 − PC spreadsheet format version 4. 0. 2 Ø ATO Portals (Business/Tax Agent) − AUSkey for both electronic and PC spreadsheet reporting − File transfer test facility for electronic reporting only UNCLASSIFIED – 2017 Annual investment income reporting 3

Reporting requirements ERS version 11. 0 or PC Spreadsheet format v 5. 0 You must report using v 11. 0 or v 5. 0 if you are: Ø An Attribution Managed investment trust (AMIT) Ø Reporting attributions received from an AMIT Ø Reporting: − Exploration credits − Early Stage Venture Capital Limited Partnership (ESVCLP) tax offset − Early Stage Investor tax offset − credits foreign resident capital gains withholding amounts Farm Management Deposits (FMD) providers offering a loan offset account facility from 1 July 2016 must report using v 11. 0 only. UNCLASSIFIED – 2017 Annual investment income reporting 4

Reporting requirements Electronic specifications version 10. 0. 2 Reporting requirements: Ø All other reporters can continue to use version 10 Ø No longer able to report Exploration credits at Foreign income tax offset field from 2017 onwards Ø FMD reporters offering the loan offset account facility from 1 July 2016 cannot use this version. PC spreadsheet format v 4. 0. 2 Reporting requirements Ø Must have less than 1000 investments Ø FMD reporters must use the electronic reporting specifications Ø Reporters can continue to use this version if not required to move to version 5. 0. 0 UNCLASSIFIED – 2017 Annual investment income reporting 5

System readiness ATO Portals access required via the reporters AUSkey administrator: Ø AUSkey – each person lodging the reports requires their own AUSkey Ø Permissions for electronic reporting via the File Transfer function – Annual investment income report Ø Permissions for PC spreadsheet reporting via the Mail function – View and Action own mail Ø Validation reports are for electronic reporting only Testing facilities : Ø Software developers Data Transfer Test facility is for testing of software only - now available Ø Portal file transfer test function for electronic production data – now available Ø PC Spreadsheet – there are no validations in ATO portals for the spreadsheet lodgments, the data will be reviewed by our Data Quality & Integrity Team once full lodgment is received. UNCLASSIFIED – 2017 Annual investment income reporting 6

Key changes New fields and validations Investment Body Identity Data Record: Ø Investment body entity type code (7. 49) − mandatory for all reporters to complete − Validation error VR 488 – valid values are C, I, G, O, P, S or T Ø Investment body entity sub-type code (7. 50) − mandatory if Investment body entity type code is for a Trust (T) only − Validation error VR 489 – valid values are AMI, IDP, NMT, NOM or TOT − Validation warning WM 291 - Field must be blank as Investment body entity type code is not set to T. UNCLASSIFIED – 2017 Annual investment income reporting 7

Key changes New fields and validations Investment Account Data Record: Ø Type of Payment (7. 70) – New type of payment ‘AMT’ for amounts attributed from an AMIT including MIT fund payments made to non-residents – Validation warning WM 294 – valid values are AMT, DIS, DIV, FSI, INT, IRB, TDP or UTD Ø Exploration Credits (7. 104) – Valid types of payment – AMT, DIV or UTD – Validation warning WM 78 – Payment type must be AMT, DIV or UTD Ø Listed investment company capital gain deduction (7. 105) – Valid types of payment – AMT, DIV or UTD – Validation warning WM 78 – Payment type must be AMT, DIV or UTD UNCLASSIFIED – 2017 Annual investment income reporting 8

Key changes New fields and validations Supplementary Income Account Data Record: Ø Supplementary income account data record is mandatory if reporting: – attributions (Type of payment AMT) – distributions (Type of payment UTD) including when no amounts are to be reported. – Must have an Investment account data record – Validation error VR 476 - Records must be in the defined sequence. Ø Supplementary income payment type (7. 107) – New Type of payment of AMT – Validation error VR 387 - The valid values must be AMT or UTD – Validation error VR 156 – This field must have the same value as Type of payment field in Investment account data record Ø New fields applicable to AMITs and non-AMITs: – Gross cash distribution (7. 118) – Interest exempt from withholding (7. 119) – Non-assessable non-exempt amount (7. 124) – Other income (7. 127) – Share of Foreign Resident Capital Gains Withholding payments (7. 129) – Share of Early Stage Investor tax offset (7. 130) – Share of ESVCLP tax offset (7. 131) – Royalties (7. 132) UNCLASSIFIED – 2017 Annual investment income reporting 9

Key changes New fields and validations Supplementary Income Account Data Record: Ø Applicable to AMITs only: – AMIT cost base net amount – excess (7. 125) - Validation warning WM 519 - The AMIT cost base net amount - excess field must be zero filled when the AMIT cost base net amount - shortfall is greater than zero. – AMIT cost base net amount – shortfall (7. 126) - Validation warning WM 520 - The AMIT cost base net amount – shortfall field must be zero filled when the AMIT cost base net amount - excess is greater than zero. – Name of AMIT class (7. 128) - Multi class AMITs - Complete if more than one class of membership interests - Separate Investment account data record and Supplementary income account data record followed by Investor data record(s) for each class - Separate classes can be reported in the same AIIR report. - Validation warning WM 544 - If the Payment type is not AMT, this field must be blank filled. UNCLASSIFIED – 2017 Annual investment income reporting 10

Key changes New fields and validations Farm Management Deposit Account Data Record: Ø Interest offset account (7. 151) − Mandatory for FMD providers − Indicate Y if at any time during the year the interest was used as an offset account − Amount of interest not offset should be reported at Interest (7. 76) field − Validation error VR 593 - The valid values for this field are 'Y' or 'N' Investor Data Record Ø Gender (7. 192) − Validation warning WM 268 - The Gender field must contain one of the following values 'M' , 'F' , 'U' or 'X‘ File Total Data Record Ø Mandatory for all reporters: − Count of SLDR records in the file (7. 211) − Count of DSALESEC record s in the file (7. 215) − Report zero at these fields − Validation warning WM 537 - The Count of Security Level Data Records (SLDR) must equal the total of all SLDR records in this file − Validation warning WM 538 - The Count of Sale of securities data record (DSALESEC) records must equal the total of all DSALESEC records in this file. UNCLASSIFIED – 2017 Annual investment income reporting 11

Key changes New validation errors Error Message VR 387 The valid values must be 'AMT' or 'UTD' VR 476 Records must be in the defined sequence. VR 481 The Financial year field must be on or after 2017. VR 487 The valid values for this field are 'Y', 'N', or 'U' VR 488 The valid values for this field are 'C', 'I', ‘G’, ‘O’, ‘P’, ‘S’ or 'T' VR 489 If the investment body entity type code field is ‘T’ then must be ‘AMI’, ‘IDP’, ‘NMT’, ‘NOM’ or ‘TOT’ VR 592 Sales of securities information must not be reported before 1/7/2018. VR 593 The valid values for this field are 'Y' or 'N' UNCLASSIFIED – 2017 Annual investment income reporting 12

Key changes New validation warnings Warning Message WM 268 The Gender field must contain one of the following values 'M' , 'F' , 'U' or 'X' WM 291 Field must be blank as Investment body entity type code is not set to 'T'. WM 294 Field must contain either – AMT, DIS, DIV, FSI, INT, IRB, TDP or UTD. WM 519 WM 520 WM 537 WM 538 WM 544 The AMIT cost base net amount – excess field must be zero filled when the AMIT cost base net amount – shortfall is greater than zero. The AMIT cost base net amount – shortfall field must be zero filled when the AMIT cost base net amount – excess is greater than zero. The Count of SLDR records in this field must equal the total of all SLDR records in this file. The Count of DSALESEC records in this field must equal the total of all DSALESEC records in this file. If the Payment type is not ‘AMT’, this field must be blank filled. UNCLASSIFIED – 2017 Annual investment income reporting 13

Supporting documentation AIIR Companion guide Ø Version 3. 0 of the AIIR companion guide supports AIIR ERS v 11. 0 and PC spreadsheet v 5. 0 − New chapter for AMITs − Covers 2017 reporting of AIIR ERS v 11. 0 and V 5. 0 of the PC spreadsheet Ø expected to be published in June. Ø We will advise reporters through the AIIR news and updates bulletin when this becomes available. UNCLASSIFIED – 2017 Annual investment income reporting 14

2017 AMMA/SDS – guidance notes for trustees Ø The 2017 Attribution managed investment trust members annual (AMMA) statement and Standard distribution statement (SDS) – guidance notes for trustees is expected to be published by early June. Ø The statements align with v 11 of the AIIR ERS or v 5 of the PC spreadsheet format Ø An AIIR News and Updates bulletin will be issued as soon as the guidance notes are available on our website. UNCLASSIFIED – 2017 Annual investment income reporting 15

Pre-fill Importance of timeliness and data quality Ø Timeliness – the earlier the ATO receives the AIIR the earlier the data is pre-filled in My. Tax or the Tax Agent Portal for individual taxpayers to lodge their income tax return. Ø Data quality – the quality of the data provided determines how much we are able to make available for individual taxpayers Ø ATO website Pre-fill availability webpage will display when the data is available for individual taxpayers providing a more contemporary client experience. – https: //www. ato. gov. au/individuals/lodging-your-tax-return/in-detail/pre-fill-availability/ UNCLASSIFIED – 2017 Annual investment income reporting 16

More information Specifications: Ø The reporting specifications are available on the Software developers website: http: //softwaredevelopers. ato. gov. au/electronicreportingspecificationssummary Contact us: Ø Reporting and lodgment enquiries - email ato-dmi@ato. gov. au Ø AUSkey - phone 1300 AUSKEY (1300 287 539) Ø ATO Portals support - phone 13 28 66 Ø Any questions regarding this webinar – email AIIRspecificationupdate@ato. gov. au