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  • Entering into an ACA

    To enter into an ACA, your CEO or CFO must first write a 'tax governance letter' that confirms your framework is aligned to the better practices set out in Tax Risk Management and Governance Review Guide.

    The letter must also show us that:

    • you have good tax risk management procedures and they align with our guide
    • you are willing to work with us to establish the ACA, and will engage with us throughout the term of the ACA
    • you will fully and truthfully identify and disclose all material transaction and risks.

    As ACAs are collaborative arrangements, we will then develop the supporting documentation with you – this includes the terms of the arrangement. Once developed, this is signed by both parties.

    Costs of entering into an ACA

    Our approach is to ensure that entering into an ACA is at minimal cost to you and for us. The incurrence of costs can be incurred at different stages of the ACA process such as during the negotiation stage, disclosures and implementation of mitigation strategies.

    What your ACA will look like

    Generally, your ACA will have two main documents: the tax governance letter from your CEO or CFO, and the Terms of arrangement (ToA).

    The ToA establishes the general operating and relationship terms, including the expectations and obligations of both parties – it provides a written record of:

    • details of your representatives and ours, including the steering committee established under the ACA
    • the role of the steering committee in providing joint governance for the arrangement
    • the years to which the ACA applies, including how to exit the ACA
    • written commitments provided under the ACA, for example, the tax governance letter
    • guidance for continuous, full and true disclosures under the ACA
    • the penalty and interest concessions
    • the points of contact and escalation
    • the disclosure obligations applicable to each party so they can operate in a transparent environment
    • our commitment to provide prompt advice to ACA participants
    • how unresolved issues will be managed
    • the dispute resolution process, should one arise
    • the schedules for the taxes covered in the ACA, with each providing more specific information relating to the tax under an ACA.
      Last modified: 08 Nov 2018QC 21312