How to disclose your entity's reportable tax position in the RTP schedule to the company tax return.
About the RTP schedule
The reportable tax position (RTP) schedule is a schedule to the Company tax return. It gathers information on uncertain tax positions from the largest companies.
The RTP schedule has expanded to include disclosures of arrangements that pose a risk to the corporate tax base. This often involves questions related to tax avoidance, profit shifting, or both.
The schedule has expanded to private companies that:
- were notified of the requirement to lodge in 2021, and
- meet the lodgment criteria from 2022.
The RTP schedule categories
The RTP schedule contains the following 3 categories.
Category A
Category A requires disclosures of material positions that are either:
- about as likely to be correct as incorrect, even if they are reasonably arguable
- less likely to be correct than incorrect.
Category B
Category B requires disclosures of both:
- material tax-related provisions
- current or contingent tax liabilities recognised or disclosed in accordance with accounting principles in financial statements.
Category C
Category C requires disclosures of:
- specific arrangements of concern
- self-assessed risk ratings for arrangements covered by our Practical Compliance Guidelines (PCGs).
Each year we publish what we've learned from Category C disclosures for public and multinational businesses.
How to lodge the RTP schedule
You need to self-assess your large business against the lodgment criteria listed in the RTP schedule instructions for the relevant year. You are required to lodge even if your entity has no disclosures to make.
The tax positions that are reportable have changed over income years. When completing your company's tax return, refer to the RTP schedule instructions for the relevant income year:
- Reportable tax position schedule instructions 2023
- Reportable tax position schedule instructions 2022
Penalties may apply if you don't make a full and true disclosure under the RTP schedule.
For assistance with your entity's RTP lodgment obligations, email ReportableTaxPosition@ato.gov.au.
How we use RTP disclosures
RTP disclosures help us understand and assess changes in tax positions and arrangements, including new arrangements taxpayers are entering into. It also allows us to prioritise our assurance activities.
Taxpayers who have achieved justified trust (high assurance) will have a less intensive engagement approach during the monitoring and maintenance period. This enables us to effectively monitor changes in arrangements supported by disclosures in the RTP schedule and to adjust our actions accordingly.
RTP and our assurance programs
We have full coverage of the most systemically important corporate taxpayer groups through our assurance programs, allowing us to check the accuracy of disclosures. Our assurance programs include:
- Top 100 program and Top 1,000 tax performance programs, covering the largest public and multinational groups.
- Top 500 and Next 5,000 tax performance programs, covering the largest private groups. This allows us to check the accuracy of disclosures.
We continually monitor taxpayer disclosures in the Top 100 and Top 500 populations and assess disclosures on an annual basis. Our high coverage levels through our assurance activities mean we will ordinarily already be aware of arrangements before disclosures are made.
We review the Top 1,000 taxpayers on a 4-year cycle. This means not all arrangements related to the most recent RTP schedule disclosures made have been assured by us yet.
We review the larger Next 5,000 taxpayers through comprehensive risk reviews that target the key priority focus areas, together with any new emerging issues impacting private groups. This means that only some arrangements related to the most recent RTP schedule disclosures made would be assured.
How we use RTP disclosures in our compliance program
We tailor our compliance approach to the risk rating disclosed by taxpayers. For example, our activity for low-risk disclosures is limited to confirming the arrangement is within the low-risk zone and the methodology in our Practical Compliance Guideline (PCG) is correctly applied.
We apply more intensive scrutiny for high-risk disclosures to determine if they comply with the relevant legislative provisions. If we can’t gain this assurance at the review stage, we may undertake an audit or more intensive investigation through our Top 1,000 Next Actions Program or large business assurance programs.
Disclosures enable us to understand and assess changes in tax positions and arrangements, including new arrangements taxpayers are entering, and to prioritise our assurance activities. Importantly, taxpayers who have achieved justified trust (high assurance) will have a less intensive engagement approach during the monitoring and maintenance period. This enables us to effectively monitor changes in arrangements supported by disclosures in the schedule and adjust our action accordingly.
We review all disclosures to monitor the performance and assess and prioritise our engagement with the large business population. Where we identify new high-risk arrangements or arrangements of concern, we prioritise the taxpayer for review.
RTP disclosures also inform how we conduct the assurance review. For example, a taxpayer who has self-assessed in the green zone will be reviewed on whether the PCG has been correctly applied to obtain confidence of the tax outcome. This is typically a less resource intensive process.
We monitor and determine if disclosures in the RTP schedule are incomplete or inaccurate through our assurance programs and analysis of other data sources, for example country-by-country reporting.
RTP and governance
For taxpayers in the medium and emerging populations (as well as the smaller Next 5,000 taxpayers), we take a risk-based approach to allocating compliance resources. This means we review the highest risk arrangements where these are material.
Given the lack of materiality thresholds for most Category C disclosures, we may not apply compliance resources to review in detail every high-risk arrangement disclosed. Instead, we will concentrate our efforts on arrangements that have a material impact on the taxpayer’s tax outcomes.
The RTP schedule can play an important role in the tax risk governance framework of large companies. It is a useful tool for tax functions, risk committees, chief financial officers (CFOs) and boards to understand the tax risk profile of your organisation across key system risks.
RTP schedule disclosures can highlight potential areas of dispute with us. To reduce your level of tax risk, we encourage you to review and amend RTP disclosures that have either:
- a high-risk rating for an arrangement
- an arrangement with the same or similar characteristics to those within a Taxpayer alert.
This will improve your own and our confidence in those tax positions.
Our RTP findings report will allow large companies to understand your risk profile across key system risks relative to that of your peers. This provides an important sense check to organisational thinking as to the relativity of your tax risk profile.
How to disclose your entity's reportable tax position in the RTP schedule to the company tax return.