Large public and multinational taxpayers make a significant contribution to the Australian economy and play a critical role in the tax system. The ATO engages with large public and multinational taxpayers on an ongoing basis to obtain assurance they're paying the right amount of tax.
The ATO has now released 4 findings reports containing insights and observations from their key large corporate taxpayer assurance programs and information provided by taxpayers. These reports are findings for: the Top 100 program, the Top 1,000 program, the Reportable tax position schedule Category C disclosures and the Public Groups & International Advice and guidance program.
Britta Finnigan, Acting Assistant Commissioner, says that the annual findings report for the top 100 program demonstrates high levels of willing tax compliance among Australia's largest corporates.
'Four out of 5 Top 100 taxpayers have obtained either a high or medium level of assurance for income tax as of 30 June 2022,' Ms Finnigan said.
The ATO works with the concept of 'justified trust' to provide a framework which considers tax risk management a part of good corporate governance.
'The justified trust program benefits organisations, their stakeholders and the wider community by providing confidence and certainty about their tax outcomes, as well as the effectiveness of their tax governance frameworks.
'The justified trust ratings help organisations to demonstrate their community and environmental, social and governance credentials as part of their broader social licence to operate,' Ms Finnigan explained.
This is the fourth year the ATO has delivered the Top 1,000 findings report. The reporting creates transparency for the community about the outcomes of ATO assurance programs for the Top 1,000 population, according to Assistant Commissioner Megan Croaker.
'We have continued to build on our assurance engagement with the Top 1,000 and our programs have evolved. We're now completing combined assurance reviews for income tax and GST and are starting to review taxpayers for a second time.
'This year, we continue to report on the income tax and GST outcomes from our reviews and have seen an improvement in the overall assurance ratings. We're also able to show the changes within the population by looking at the taxpayers that we have reviewed a second time,' Ms Croaker said.
For the past 12 months, the ATO has focused on tax governance in their Top 1,000 reviews to improve the understanding of expectations in respect of governance.
'Governance is an important focus area as we can rely on taxpayers with good governance to continue to report correctly,' Ms Croaker explained.
'We have published additional governance guidance to assist the Top 1,000 when preparing for a combined assurance review. We're starting to see increased assurance ratings for tax governance as more taxpayers are achieving a stage 2 rating.'
'We're identifying concerns with a small percentage of the Top 1,000, which have required intervention through ATO next actions. We will continue to work with those taxpayers to resolve the identified issues.'
According to Assistant Commissioner Faith Harako, the Reportable tax position schedule report shows that high risk or arrangements of concern (such as tax avoidance schemes) are not prevalent among large public and multinational businesses.
'The Reportable tax position schedule report provides valuable insights on key corporate tax risks in the large market. It shows that low risk disclosures made by large public and multinational businesses have increased over the past 3 years. The ATO continues to monitor disclosures and have high levels of coverage over the high-risk arrangements through our compliance and assurance programs,' Ms Harako said.
The report provides aggregated data from information provided by taxpayers through the Reportable tax position schedule Category C. The schedule requires taxpayers to disclose specific arrangements of concern (including those described in Taxpayer Alerts and Practical Compliance Guidelines), and their self-assessed ratings.
'Advice and guidance is a core service the ATO provides taxpayers to help them meet their tax obligations', says Acting Assistant Commissioner Melissa Spurge. This is the first year the Advice and guidance program report will be published, which includes insights for the past 3 financial years.
'I'm pleased to deliver for the first time our key insights from the Advice and guidance program over the past 3 years. The report captures the extensive use of our program by public and multinational business taxpayers, and their advisers,' said Ms Spurge.
'It also sheds light on the complex and significant nature of the transactions and tax issues where taxpayers are seeking certainty on how the law applies to their arrangements,' she said.
The report captures the key role the Advice and guidance program plays in providing tax certainty to hundreds of large businesses and the entities that invest in them and illustrates that the nature and amount of advice requested reflects market activity, as well as changes to the law.
Ms Spurge explains, 'Significantly, the report highlights the most common topics where taxpayers are seeking certainty on the application of the law, revealing that capital management and capital gains tax issues continue to be at the forefront for public and multinational business taxpayers'.
We have released 4 findings reports containing insights and observations on large public and multinational taxpayers.