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Draft Legal Professional Privilege Protocol | Australian Taxation Office

LPP is a fundamental right of all clients, including taxpayers, who seek legal advice. The Tax Institute recognises that the ATO requires access to certain information in order to effectively administer the tax system. It is important for the Draft Protocol to ensure the right balance is achieved between these principles in a way that will support taxpayers to exercise their rights, while facilitating ATO access to relevant information, where appropriate. 

Taxpayers must be able to trust that LPP will generally remain inviolate, so that they can seek legal advice with full transparency. If this assurance is not provided, taxpayers may be discouraged from seeking advice, or from being fully transparent with their legal advisers. This may lead to taxpayers adopting incorrect or more aggressive tax positions, withholding important information from advisers, or taking actions without the benefit of advice on the legal implications. 

In addition, to strike a balance with the compliance burden imposed on taxpayers by the Draft Protocol, it is important that only necessary information is requested for the purposes of determining whether to challenge an LPP claim, and that reasonable time is allowed to provide it. 

As a fundamental premise, information requests should not result in taxpayers waiving LPP, or being required to provide information that would not otherwise be required by a court when determining an LPP claim.

It is therefore important that any steps recommended in the Draft Protocol do not amount to, and importantly are not perceived as, overreach, or cause LPP claims to become excessively burdensome. 

Submission prepared by:

The Tax Institute

Submitted to:

Faith Harako
Assistant Commissioner
Public Groups & Internationals
Australian Taxation Office

For more information, contact:

Julie Abdalla, FTI
Tax Counsel, The Tax Institute
(02) 8223 0058

Tagged
  • 2021
  • Tax administration
  • Disputes
  • Legal Professional Privilege