Under its newly released approach, the ATO expects taxpayers to “proactively engage” with the tax office, and disclose significant transactions and material business changes, before they occur.
Last week, the ATO released guidance on its approach to monitoring and maintenance among the Top 100 Justified Trust Program, which will see large public, multinational businesses, and superfunds subject to ongoing engagement with the tax office, and comprehensive reviews every third year. Firms that meet the program’s criteria will be approached for an initial evaluation to determine their ability to pay the correct amount of income tax, after which they will be scored on a three-tiered assurance spectrum: low, medium, or high.
Shaun told Accountants Daily that while the ATO will certainly engage with high-value targets, the benefit of achieving a high assurance rating is probably how the ATO will engage with you.
“If you follow the ATO guidance and are on-board with the concept of demonstrating your level of compliance — and being proactive in the way in which the ATO engages with you — then your group will likely be met with a softer touch,” he said.
“But if you resist what the ATO’s proposing in terms of demonstrating your group’s compliance, for example through the development of an appropriate tax governance framework, you’ll probably experience a harder edge from the ATO.”
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If you require more information about the ATO’s private wealth compliance programs, you can visit our Tax Disputes Portal.