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  • Seven principles of effective tax governance

    Accountable management and oversight

    Roles and responsibilities are clearly defined and understood in terms of accountability for tax administration and decision-making.

    You understand your tax and super obligations, including registrations, lodgment, reporting, payment and record keeping obligations.

    Where responsibility for tax governance is shared with your tax advisers, ultimately you as the business owner are confident that you understand the tax risks and are meeting your tax and super obligations.

    Recognise tax risks

    Appropriate controls and processes are in place to support compliance with tax and super obligations and identify, assess and mitigate commercial and tax risks.

    Tax considerations are included in your decision-making processes and you're alert to the consequences of decisions made. Material transactions are well documented and subject to appropriate review and sign-off for tax risk purposes. Where commercial and tax risks have been identified, there is a plan to manage the risks and limit the impact on your business.

    A thorough review process considers the ATO's published view and identifies potential differences of opinion that may give rise to a dispute. Risk of dispute with the ATO over a difference in law or factual interpretation is identified early and steps are taken to engage with us.

    Seek advice

    Clearly defined arrangements are in place for escalating tax issues and seeking tax advice. Consulting published ATO guidance and advice helps you assess tax outcomes for your business in adopting a particular position. You get advice from tax professionals and advisers, and engage with us early for tailored advice where more certainty is needed.

    Integrity in reporting

    Owners or managers are able to form the view that the financial records of the business, including tax reporting, reflect a true and fair view of that business. Tax positions align with the law. Tax outcomes either reflect economic performance or are understood and can be explained by other factors.

    Systems and controls are in place to ensure accurate reporting, and these controls are reviewed periodically to ensure they remain effective. Good record keeping practices are followed to maintain important documentation for the relevant periods so that it is easily accessible.

    Professional and productive working relationship

    You have an open, transparent, respectful and professional working relationship with the ATO.

    Through our engagement with you or your advisers we aim to create a seamless working relationship to resolve any issues and avoid disputes.

    Timely lodgments and payments

    Effective tax governance is demonstrated by meeting obligations including lodgment and payment obligations in full and on time. Timeframes are set for tax lodgments and payments.

    Tax liabilities are well managed and paid on time. Efforts are made to engage with us when you're unable to pay on time.

    Ethical and responsible behaviour

    Acting ethically and responsibly – with honesty, integrity and in a way consistent with the reasonable expectations of the broader community and the taxpayers' charter.

    Ethical and responsible behaviour involves more than mere technical compliance with the law. Effective tax governance not only ensures accurate reporting, but helps avoid behaviours associated with tax manipulation, avoidance and schemes.


    Last modified: 31 May 2016QC 49162