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  • Tailored Engagement with privately owned and wealthy groups

    Privately owned and wealthy groups, including groups controlled by high-wealth individuals, are influential to some of Australia’s most successful businesses who make significant contributions to Australia's economy. We recognise their importance to community confidence in the tax and super systems and seek to assure their taxes are correct.

    We tailor our ongoing engagement with the private group having regard to their risk profile.

    Our interactions may range from either:

    • streamlined pre-lodgement engagements for low risk groups with effective tax governance and assessed as paying the correct amount of tax through to intensive review
    • formal reviews and audits for high risk groups involved in tax avoidance schemes, with unexplained poor tax performance or with no or ineffective tax governance arrangements.

    We engage with private groups in real time so that we can be clear about our view of the law as it applies to their business circumstances; to deliver appropriate services such as technical advice and to mitigate tax risks early, preventing disputes.

    For example, if commercial arrangements such as trade sales, corporate restructures or transactions are being undertaken by a group, we may contact you during the event or before you lodge your tax return to discuss and confirm with you our view of the law as it applies to the transaction.

    Through our contact, we want to establish a productive and professional working relationship built on transparency.

    For the Top 320 largest privately owned and wealthy groups our engagement activities are directed at dealing with all the group's tax and superannuation obligations including income tax, GST and excise.

    Our aim is to reach a position of justified trust in order to assure the correct amount of tax has been paid and to provide greater certainty to the group about our future compliance engagements.

    If we have established justified trust and clients have effective tax governance arrangements in place our aim is to streamline our interactions to reduce the client's cost of compliance, while continuing to assure compliance with tax laws into the future. Where we are unable to establish justified trust and tax risks remain high our engagements will be more intensive including formal reviews and audits.

    To establish justified trust we will outline the 4 principles.

    • tax performance
    • correct application of the law
    • abnormal transactions
    • the effectiveness of tax governance.

    We undertake an initial engagement to confirm our understanding of the private group's business and industry, we discuss perceived risks and what needs to be done to mitigate these risks.

    The pre-lodgment engagement is aimed at raising and resolving potential tax risks as they occur and before the tax return is lodged to prevent costly disputes.

    The engagement will typically involve:

    • the identification and assessment of tax risks during the year of income, including understanding the facts upon which a decision was made
    • building an understanding of your business, including a review of your tax governance processes – for example, your decision-making framework, policies, processes and systems.

    It aims to ensure transparency through the:

    • identification, assessment and evaluation of potential areas of concern, areas of interest (for example, new business) and tax risk
    • early engagement
    • building and maintaining of ongoing open dialogue.

    See also:

    Last modified: 26 Sep 2018QC 44843