Show download pdf controls
  • Mutual arrangements for certainty

    You can:

    Commercial deals

    We engage early with privately owned and wealthy groups to offer a pre-lodgment compliance agreement for commercial deals and restructure events.

    We define a commercial deal as any significant business transaction that may affect the structure of your business. Some examples of this may include:

    • demergers
    • divesting
    • financing and refinancing
    • initial public offerings
    • mergers and acquisitions
    • private equity
    • restructures
    • sale of business (partial or complete) or business assets
    • sale of commercial property
    • share buybacks.
    • takeovers

    You can use our early engagement service to receive practical certainty for these significant events while they are being planned or before lodgment.

    Next steps:

    Gaining certainty on your commercial deal

    We know your tax and super affairs can be complicated. We want to work with you directly to gain a clear understanding of your circumstances and address any issues for you as soon as possible. You can contact us to seek a pre-lodgment agreement for any commercial deal you are considering or have recently completed.

    If you contact us, we can:

    • help resolve tax technical issues relating to the deal
    • work towards agreement on the tax position you intend to take
    • help you meet your tax obligations and avoid a transaction audit.

    We may sometimes approach you about your involvement in a commercial deal or restructure event. Your participation is voluntary, and includes the option of deferring the engagement interactions with us to a more suitable time prior to lodgment.

    Working transparently with us can achieve a mutual resolution of any tax issues arising prior to lodgment. This enables potential tax disputes to be avoided post lodgment.

    If agreement can be reached and lodgement received as agreed, we will not conduct a review or audit for the commercial deal transaction

    This can increase certainty around how the tax law applies to your individual circumstances.

    Approach us pre-deal

    We can look over your proposed deal and discuss the tax implications of the proposed transactions. If time allows before the deal is completed we can provide practical certainty on the tax outcomes of the proposed deal.

    Approach us pre-lodgment

    When you have completed a deal, we can work with you to reach an agreement as to how and when the transaction will be reported for tax purposes. However, we may still contact you post lodgment to confirm that you reported as agreed.

    Engage with us

    It is best to engage with us as early as possible to discuss your commercial deal and work with us to get your tax position right before you lodge your tax return. By doing so, you can avoid potential tax disputes that can occur post lodgment as well as penalties and interest where amendments are required to correct reporting.

    You can request this service and talk to us about your commercial deal.

    See also:

    Annual compliance arrangements

    An annual compliance arrangement (ACA) is a voluntary administrative arrangement between us and you to govern our compliance relationship.

    An ACA provides a level of practical certainty for you by mutually resolving tax risks as soon as possible, generally prior to lodgment. ACAs complement other products and services we offer, such as our rulings program.

    These arrangements are most suited to Australia's largest businesses. ACAs can apply to income tax, goods and services tax, excise, fringe benefits tax, petroleum resource rent tax, or any combination of these taxes.

    Large businesses considering an ACA will need to confirm good tax governance processes are in place and be committed to working openly with us by making full and true disclosures of major transactions and tax risks.

    See also:

    Advance pricing arrangements

    An advance pricing arrangement (APA) is an agreement with us on the future application of the arm's length principle to your dealings with international related parties.

    APAs provide certainty by:

    • ensuring the fair application of the arm's length principle to related party international dealings
    • eliminating or reducing the risk of double taxation on related party international dealings (particularly in bilateral and multilateral APAs)
    • eliminating the risk of a transfer pricing audit on the related party international dealings covered by the APA.

    APAs may be:

    • unilateral, which involves your business in Australia and us
    • bilateral or multilateral, which involves an agreement between two or more tax administrations and their respective taxpayers.

    APAs generally cover a period of three to five years and may be reviewed if the trading circumstances materially change. APAs have an annual reporting requirement.

    See also:

    Mutual agreement procedures

    International transactions can expose your group to double taxation. For example, a transfer pricing adjustment arising from an audit in one country may result in the same income being taxable in two jurisdictions.

    If you believe you have been or will be subject to double taxation, you can apply for relief to the tax administration of your jurisdiction. If your application is accepted we will discuss your case with the other tax administration and try to resolve it in accordance with the relevant double tax agreement. This process is known as a mutual agreement procedure.

    A mutual agreement procedure is part of the dispute resolution process and is in addition to your objection and appeal rights.

    See also:

    Last modified: 18 Oct 2018QC 44828