Individuals & groups who fall within this program
Medium and Emerging private groups include:
What does the Medium and Emerging private groups program look like?
The Medium and Emerging private groups program supports medium and emerging private groups to meet their tax obligations. With this program, the ATO is improving its understanding of a private group’s business and the environment that the private group operates in. This is achieved by using improved data and analytics to identify trends and priority risks specific to medium and emerging private groups.
With this increased understanding, the ATO can better tailor its approach and develop strategies to help the group address and mitigate tax risks. The ATO will work with you by:
- letting you know about issues that attract its attention
- publishing public advice and guidance on issues relevant to medium and emerging private groups
- partnering through early engagement and pre-lodgement agreements for commercial deals to provide certainty on significant transactions and events
- conducting risk-based reviews and audits, where appropriate.
The Medium and Emerging private groups program will not be as intensive nor as involved as the ATO’s approach to the Top 500 or Next 5000 group of taxpayers.
The ATO is likely to focus its attention on engaging with:
- larger or higher risk private groups and entities
- private groups experiencing rapid growth, looking to expand offshore or where controlling individuals are transitioning to retirement.
Timeframe of a review?
The timeframe of any review will depend on the type of engagement with the ATO. For example, an early engagement on a specific transaction may be completed within three months, whereas a risk review or audit may take longer than 12 months.
What should you do?
Private groups within the Medium and Emerging private groups program should engage with their accountants and legal advisers to:
- prepare or update group structure diagrams and organisational charts
- ensure that all contemporaneous documentation and advice has been retained and collated that supports the tax treatment of your significant or new transactions
- collate all trust deeds, trustee distribution resolutions, company constitutions and other constituent documents
- collate financial accounts/materials, tax and accounting reconciliations and real property records
- review any recent significant transactions, related party transactions and restructures.
What’s attracting the Commissioner’s attention?
- Inter-generational family wealth transfers, or the transfer of control of businesses from one generation to another, including partial and complete business exits.
- Poor tax governance and record-keeping.
- Tax or economic performance dissimilar to comparable businesses.
- Low transparency of tax affairs and aggressive tax planning.
- Large, one-off or unusual transactions, including the transfer or shifting of wealth.
- Tax outcomes inconsistent with the intent of the tax law.
- Choosing not to comply, or regularly taking controversial interpretations of the law, without engaging with the ATO.
- Lifestyle not supported by after-tax income.
- Accessing business assets for tax free use.
Contact our tax team
ABL is the tax controversy sector leader in end-to-end management of taxation disputes and litigation arising from ATO compliance activities and audits.
If you have identified issues or would like assistance in reviewing risks or uncertainties, please contact one of our team members below.