Tax assurance for large privately owned and wealthy groups

Large privately owned and wealthy groups, including groups controlled by high-wealth individuals, are behind some of Australia’s most successful businesses. We recognise their importance to community confidence in the tax and super systems.

For the largest privately owned and wealthy groups our engagement activities may involve an initial engagement to confirm our understanding of the perceived risk, a pre-lodgment compliance review, a post-lodgment review or an audit. We may engage with you in real time in certain circumstances – for example, if commercial arrangements such as sales, corporate restructures or transactions are perceived to be high risk.

We may extend the use of governance and assurance workshops to larger privately owned and wealthy groups. Workshops provide an opportunity to identify and resolve potential issues openly and transparently.

When we contact you we want to establish a productive and professional working relationship built on transparency.

Pre-lodgment compliance reviews

The pre-lodgment compliance review (PCR) is generally used for the largest private groups that don't have an income tax annual compliance arrangement (ACA) with us. A PCR may be used in real time in the case of commercial arrangements, such as sales, corporate restructures or transactions that are perceived to be high risk. PCRs support our approach to raising and resolving potential tax risk concerns as they occur.

A PCR typically involves:

  • the identification and assessment of tax risk during the year of income, including understanding the facts upon which a decision was made
  • an effective and timely disclosure regime based on information and documents provided by you (this does not prevent the gathering or use of any other relevant information or documentation)
  • building an understanding of your business, including a review of your tax governance processes – for example, your decision-making framework, policies, processes and systems
  • a level of intensity and differentiation commensurate with our view of your tax risk position, allowing for flexibility in the application of the review.

A PCR 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 and building of transparency and willing participation
  • building and maintaining of ongoing open dialogue.

A PCR does not provide the same level of certainty as the ACA, where both practical certainty and sign off can be obtained. Certainty can also be provided through other mechanisms, such as the rulings system.

See also:

Last modified: 31 May 2016QC 44843