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  • Next 5,000 private groups tax performance program

    The Next 5,000 tax performance program is funded by the Tax Avoidance Taskforce and seeks to give the community confidence that Australia's largest privately owned and wealthy groups are paying the right amount of tax.

    Engagements under this program focus on providing certainty of the tax treatment in relation to significant transactions, activities or events and/or potential tax risks specific to your business. Another focus of the program is to provide advice and guidance on relevant issues to help you get things right. By working with Next 5,000 groups, we aim to increase ongoing and willing participation in the tax and super system.

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    Who is covered by this program

    We use data matching and analytic models to identify Australian resident individuals who, together with their associates, control wealth of more than $50 million. We then consider all entities within a group.

    Our private group approach helps us to better understand private group businesses and provide you with a tailored experience.

    The Next 5,000 program does not include private groups in our Top 500 private groups tax performance program.

    See also

    How we tailor our approach to you

    To better tailor our approach and develop strategies to address and mitigate tax risks, we identify trends and priority issues specific to Next 5,000 groups. We work with you by:

    • letting you know about issues that attract our attention
    • publishing public advice and guidance on issues relevant to you
    • sending you information specific to your business about potential risks we have identified.
    • providing certainty on significant commercial deals through early engagement and pre-lodgment agreements
    • engaging through tailored reviews and, where appropriate, audits.

    Our tailored approach includes working with groups to provide certainty on the tax treatment of significant events, transactions, or complex tax issues. A key focus of all our engagements is early resolution (where appropriate). This may involve correcting tax errors and improving existing processes to help you get things right and avoid similar errors going forward.

    Where groups are unwilling to work with us in an open and transparent way, we take firmer action, such as traditional reviews and audits and consider the option to use our formal information gathering powers, if necessary.

    Types of engagement you can expect

    We select the most appropriate type of engagement for your group based on the size and structural complexity of your operations, and results from our data analytics and risk models.

    Broadly, we use 3 types of engagement in the Next 5,000 program:

    • streamlined assurance reviews based on our justified trust methodology
    • reviews on risks specific to your business
    • pre-lodgment compliance agreement for your commercial deals and restructure events.

    Streamlined assurance reviews

    For large groups with complex structures or multiple potential tax issues, we take an assurance approach through a streamlined assurance review to gain confidence that your group has paid the right amount of tax.

    Specific reviews are where we have identified an issue or potential risk which we believe we can work with a group to resolve quickly.

    Engaging on risks specific to your business

    For some groups, we may identify only specific areas of concern that need to be resolved.

    Using the data that you have provided in your tax return or BAS matched against other data reported to us, we can identify potential tax risks specific to your business or group. We will contact you about the risks we have identified, by either:

    • sending you information about potential tax risks for your group and what action you can take to prevent tax errors or get further advice
    • sending you a letter with details of a discrepancy that we have identified in your tax return and what you can do to review or correct the potential error
    • commencing a review.

    Reviews on risks specific to your business

    These reviews focus on specific potential tax risks which we believe we can work with a group to resolve quickly. They do not involve an assurance approach and do not use our justified trust methodology.

    In most cases, we complete these reviews within 90 or 120 days. Reviews generally focus on issues that can be resolved by getting further information from you, or by you completing some specific action, such as lodging an outstanding schedule.

    Some issues that are the focus of these reviews are:

    • where we have identified income from third-party information attributable to you but did not see this income reported on your tax returns
    • where an entity in your group has not lodged their tax returns resulting in a shortfall of income tax paid
    • late or incorrect lodgments of tax returns, statements or schedules
    • instances where you do not appear to have enough income to cover your expenses or to acquire the assets that you own
    • inappropriately accessing tax concessions, credits and offsets that you are not entitled to
    • large, one-off, or unusual transactions, including the transfer or shifting of wealth
    • trust structures and Division 7A, such as written loan agreements or minimum yearly repayments.

    See also

    GST-integrated reviews

    We will also undertake a number of GST-integrated reviews as part of the Next 5,000 program. This may be as part of a streamlined assurance review or a review on specific potential tax risks.

    Where we consider GST, we will seek objective evidence from you in support of your GST treatment.

    We complete GST-integrated reviews within the normal review timeframes.

    Findings report – Next 5,000 tax performance program

    We have published our first Findings report Next 5,000 tax performance program. This is based on our findings, current as at 31 August 2022.

    The report includes:

    • our observations and insights on the tax performance of Next 5,000 private groups that we have engaged with through streamlined assurance reviews
    • common tax issues, risk themes and behaviours and the importance of good tax governance
    • the profile of a typical Next 5,000 group and the characteristics that define the Next 5,000 population
    • an outline of how we engage with a Next 5,000 group and how we apply the justified trust methodology in our streamlined assurance reviews
    • our observations on the GST issues we have observed arising from significant activities, events or transactions
    • our approach to resolving issues and our focus for 2021–22.
    Last modified: 20 Jun 2022QC 60504