Top 1,000 income tax assurance

Income tax assurance

The Top 1,000 income tax assurance program ratings and observations.

• Tax risk management and governance
• Significant or new transactions, specific tax risks, and tax risks flagged to market
• Alignment of accounting and income tax outcomes
• Income tax next actions program

From the commencement of the Justified Trust approach in 2016 and until 30 June 2025, we have completed a total of 1,746 income tax assurance reviews covering 1,271 taxpayers.

As the size and composition of the population has changed since commencing the assurance approach for the Top 1,000 in 2016, we have recalibrated our approach to defining the population, bringing the focus of the assurance program back to the largest 1,000 taxpayers from the largest economic groups.

For taxpayers currently in the program, as of 30 June 2025 we have completed a total of 1,176 reviews, covering 794 taxpayers in the population. Unless otherwise stated, any reviews completed on taxpayers that are not in the current population are not included in our statistics in the detailed sections below.

In 2025 alone we completed 221 reviews, of which 72 were on taxpayers reviewed for the first time.

Population coverage

Graph 1 below shows the review status of taxpayers in the population as of 30 June 2025.

Graph 1: Population review status for current Top 1,000 taxpayers, as of 30 June 2025

When looking in greater detail at the taxpayers in the population, we have completed assurance reviews for 82% of the current population, with 18% yet to have a review completed. In respect of the different pools of taxpayers, just 11% of the significant pool are not yet assured as compared to 21% of the general pool. This discrepancy in pool review coverage is a product of the more stable presence of significant taxpayers.

A taxpayer in either pool may have not yet been assured for a variety of reasons, including the following.

• 4% of the population that are not yet assured did not meet the metrics for inclusion in the Top 1,000 assurance program prior to 2025 and will be considered for selection in upcoming years.
• 2% of the population that are not yet assured did not previously meet the metrics for inclusion in the Top 1,000 assurance program prior to 2025 but are part of an economic group with an ongoing population presence. These will be considered for selection in upcoming years.
• 5% of the population that are not yet assured are currently considered not yet suitable for selection, due to various reasons (for example where other ATO compliance activity is in progress, or a related party in the group has an assurance review underway). These taxpayers will be considered for review in upcoming years.

As shown in Graph 1 above, 7% of the population are not yet assured, but have a first review in progress that is not yet complete as of 30 June 2025.

Health of the system

The below table shows the population by latest assurance rating (from any review year in the program since 2016) and 2023 tax figures.

This table demonstrates that while taxpayers not yet assured comprise 18% of the population, these taxpayers cover a proportionally lower share of total business income, tax paid, tax losses carried forward and tax losses deducted. We expect the levels of coverage by the assurance program for each category to increase in the future as we increase the review status of the population.

Population review status by latest rating and 2023 tax figures (nearest hundred million $)

Population status	Latest rating (%)	Total business income (%)	Tax paid (%)	Tax losses carried forward (%)	Tax losses deducted (%)
Assured	82%	$1,152bn (88%)	$31.1bn (95%)	$98.1bn (89%)	$14.9bn (88%)
High	26%	$319.4bn (28%)	$7.8bn (26%)	$44.5bn (45%)	$1.5bn (13%)
Medium	63%	$733.3bn (64%)	$21.7bn (68%)	$40.6bn (42%)	$12.1bn (80%)
Low	11%	$99.3bn (8%)	$1.6bn (6%)	$13bn (13%)	$1.3bn (7%)
Not assured	18%	$162.2bn (12%)	$1.7b (5%)	$12.2bn (11%)	$2bn (12%)

This table outlines the tax positions reported and paid in the 2023 year by the current population, based on their rating as at their last assurance review. The assurance ratings of individual taxpayers may not have been attained in respect of the 2023 year (i.e. the 2023 year may not yet have been assured through reviews), but instead uses the latest assurance rating (which could relate to a different year) as a proxy for the population coverage of key tax figures.

Ratings

The overall level of assurance is based on an assessment, having regard to objective evidence, as to whether the taxpayer is considered to have paid the right amount of tax.

We apply consistent rating categories when considering the overall level of assurance.

Ratings categories for overall levels of assurance on income tax

Colour indicator	Rating	Category description
	High	We obtained assurance that the taxpayer paid the right amount of Australian income tax for the income years reviewed.
	Medium	We obtained assurance in relation to some but not all areas reviewed. For those areas not yet assured, further evidence or analysis will be required before we obtain assurance that the taxpayer paid the right amount of Australian income tax.
	Low	We have specific concerns around the taxpayer's compliance with the Australian income tax laws and the amount of Australian income tax paid for the income year(s) reviewed.

Obtaining overall high assurance rating

In the Top 1,000 program, we apply a principled approach to reaching overall high assurance (justified trust). This is based on 2 elements:

1. A quantitative threshold of more than 90% tax assured and economic activity correctly reported.
2. An objective assessment of 7 qualifying factors.

The 7 qualifying factors

1. Tax risk management and governance

When rated, tax risk management and governance is at least at stage 2.

2. Tax risks flagged to market and significant transactions

Any material or significant tax risks flagged to market (Practical compliance guidelines (PCGs), tax alerts, public rulings, including those set out in the Reportable Tax Position (RTP) Category C disclosures) have received at least a medium level of assurance and are not identified as requiring further action based on the information provided.

3. International related party dealings and controlled foreign companies (CFCs)

Any material or significant international related party dealings, profit attribution to permanent establishments and CFCs have received at least a medium level of assurance and are not identified as requiring further action based on the information provided.

4. Losses

Losses, if applicable, have received at least a medium level of assurance. This includes that the commerciality of losses has been appropriately verified.

5. Effective Tax Borne (ETB) / Book to Tax

The ETB calculation and any underlying assumptions or proxies have been verified with the taxpayer. Completion of an ETB calculation will be viewed favourably by the ATO. Where the ETB calculation has not been prepared by the taxpayer, a high assurance rating for alignment between accounting and tax results will be required.

6. RTP schedule

There are no inconsistencies in RTP schedule disclosures that are identified between lodgment of the tax return and finalisation of the review.

7. Cooperative and collaborative behaviour

It has been a cooperative and collaborative process and in working with a taxpayer we have not observed any non-cooperative behaviour.

Provisional high assurance rating

An overall provisional high assurance rating may be possible in limited circumstances. Such circumstances may include where the taxpayer has provided an undertaking and is actively working on addressing a specific design gap in their tax governance framework or there is ongoing compliance activity. Where there is ongoing compliance activity, provided the quantitative threshold is met (inclusive of that unassured issue), the availability of a provisional rating will depend on the nature and stage of the compliance activity.

Overall levels of assurance

The latest assurance rating for current top 1000 taxpayers is included in graph 2 below.

Graph 2: Overall assurance ratings for Top 1,000 taxpayers reviewed, as at their latest review as of 30 June 2025

As at their last review, 26% of taxpayers have achieved overall high assurance. This means we have assurance that these taxpayers have paid the right amount of Australian income tax for the income years reviewed. Most taxpayers (63%) have achieved overall medium assurance, which gives confidence regarding the tax paid.

The below table shows each taxpayer's latest rating by population pool.

Latest assurance rating by population pool

Assurance ratings	Significant pool	General pool	All Top 1000 taxpayers
High	32%	24%	26%
Medium	58%	64%	63%
Low	10%	12%	11%

Whilst the above includes all reviews done for these taxpayers and does not represent reviews done under the differentiated approach, it is evident that significant pool taxpayers have a higher prevalence of high assurance than general pool taxpayers.

Of the 221 taxpayers reviewed in 2025, 29% obtained an overall high assurance rating, with 65% obtaining a medium assurance rating, and 6% obtaining a low assurance rating. This compares to 159 reviews done in 2024, where 27% obtained an overall high assurance rating, 63% obtained a medium assurance rating, and 9% obtained a low assurance rating. This represents a continued trend where more taxpayers are obtaining high assurance and fewer taxpayers are obtaining low assurance.

Comparison of overall ratings for first and second review

We have reviewed 394 taxpayers in the population more than once. Graph 3 shows the ratings for all taxpayers after their first review, compared to the latest rating for the 394 taxpayers in the population reviewed more than once.

Graph 3: Overall assurance ratings for first review of Top 1,000 taxpayers and overall ratings for Top 1,000 taxpayers after their latest review as of 30 June 2025

This shows that, at a total population level, there is improvement in assurance outcomes for entities reviewed more than once. That is, there is a 10% increase in high assurance and 7% decrease in low assurance.

Graph 4 below compares the latest assurance rating and first rating for only the taxpayers in the population that have been reviewed more than once. Graphs 5 and 6 show this same comparison for the significant pool and general pool taxpayers respectively.

Graph 4: Comparison of first and latest overall assurance rating for Top 1,000 taxpayers reviewed more than once as of 30 June 2025

Graph 5: Comparison of first and latest overall assurance rating for significant pool taxpayers reviewed more than once as of 30 June 2025

Graph 6: Comparison of first and latest overall assurance rating for general pool taxpayers reviewed more than once as of 30 June 2025

Graph 4 shows that taxpayers in the population reviewed more than once are more likely to achieve an improved assurance rating. Strong improvement is observed in the significant pool population (graph 5) and some improvement is observed in the general pool population (graph 6). This trend is expected to continue in the years ahead as taxpayers that maintain status in the population settle into more regular review cycles.

Overall assurance rating for reviews completed by industry

Graph 7 shows overall assurance ratings for first time reviews of the population by industry type, as well as the latest result for taxpayers reviewed more than once. High assurance ratings for first time reviews are broadly consistent amongst industries, whilst manufacturing, construction and agriculture, and wholesale, retail and services, continue to have the highest levels of low assurance for first time reviews.

Outcomes for latest reviews for those reviewed more than once are more positive across all industry populations.

Graph 7: Comparison of first and latest overall assurance rating for Top 1,000 taxpayers by industry as of 30 June 2025

You can also view the overall assurance ratings for reviews completed by industry in table format.

Note that these groupings:

• align with the industry segments used by the ATO as part of the Corporate Tax Transparency Reporting, except where we have amalgamated the Banking, Finance and Investment (BFI), Insurance (ISR) and Superannuation (SUP) segments into a Financial Services (FS) segment
• are  
  • banking, finance and investment, superfunds and insurance (FS)
  • manufacturing, construction and agriculture (MCA)
  • mining, energy and water (MIN)
  • wholesale, retail and services (WRS).

Tax risk management and governance

Tax risk management and governance continues to be a key focus area under the justified trust methodology for large public and multinational businesses.

Documented tax control frameworks that are designed effectively provide a key foundation for our ability to assure that the right amount of tax has been paid. A stage 2 rating for income tax risk management and governance gives us confidence that the tax control framework is designed effectively and is required to obtain overall high assurance.

We look to see whether a fit-for-purpose tax risk management and governance framework is in place, is applied in practice, and tested regularly to ensure it is operating as intended.

We use the following guidance material to consider the existence, design and operation of a tax control framework for income tax, focusing on the 7 key justified trust controls:

• Tax Risk Management and Governance Review guide
• Income tax risk management and governance guidance for top 1,000 taxpayers (the Supplementary Guide).

The 7 key justified trust controls for income tax are:

1. Board-level control 1 – Formalised tax control framework
2. Board-level control 3 – Board is appropriately informed
3. Board-level control 4 – Periodic internal control testing
4. Managerial-level control 1 – Roles and responsibilities are clearly understood
5. Managerial-level control 3 – Significant transactions are identified
6. Managerial-level control 6 – Documented control frameworks
7. Managerial-level control 7 – Procedures to explain significant differences.

Ratings

We apply a consistent rating system when reviewing and assessing tax risk management and governance. For more information about how we review tax risk management and governance, refer to Reviewing tax governance for large public and multinational businesses.

Stages

Colour indicator	Stage	Category description
	Stage 3	The taxpayer provided evidence to demonstrate that a tax control framework exists, has been designed effectively and is operating effectively in practice.
	Stage 2	The taxpayer provided evidence to demonstrate that a tax control framework exists and has been designed effectively.
	Stage 1	The taxpayer provided evidence to demonstrate a tax control framework exists.
	Not evidenced or concerns	The taxpayer has not provided sufficient evidence to demonstrate a tax control framework exists or we have significant concerns with the taxpayer's tax risk management and governance.

Ratings for income tax risk management and governance

Graph 8 shows the income tax risk management and governance rating for the Top 1,000 taxpayers that have been reviewed, as at their most recent review.

Graph 8: Overall income tax risk management and governance ratings for Top 1,000 taxpayers reviewed in their latest review, as of 30 June 2025

We continue to see positive shifts in governance ratings, with 57% of the 221 reviews completed in 2025 achieving a stage 2 or stage 3 rating as compared to 52% of all taxpayers at stage 2 or stage 3 as shown in graph 8 above.

Additionally, the table below shows the breakdown of latest governance rating by population pool, demonstrating that significant pool taxpayers are more likely to have achieved a higher governance rating as at their most recent review, with 62% of significant and 47% of general taxpayers reaching a stage 2 or stage 3 rating for governance.

Latest governance rating by Top 1,000 pool

Governance ratings	Significant pool	General pool	All Top 1000 taxpayers
Stage 3	11%	2%	5%
Stage 2	51%	45%	47%
Stage 1	35%	50%	45%
Red flag	1%	2%	2%
Not Rated	2%	1%	1%

Positive progress in ratings is observed when comparing the outcomes for all first-time reviews and the latest review for those covered more than once, as shown in graph 9 below.

Graph 9: Overall income tax risk management and governance ratings for first review of Top 1,000 taxpayers, and overall ratings for Top 1,000 taxpayers after their latest review, as of 30 June 2025

Graph 10 below provides this comparison in respect of the taxpayers that have been reviewed more than once. Of these taxpayers, 28% obtained a stage 2 rating in their first review, and 57% obtained a stage 2 rating in their latest review.

Graph 10: Comparison of first and latest income tax risk management and governance ratings for Top,1000 taxpayers reviewed more than once as of 30 June 2025

For both comparisons in graph 9 and graph 10, we are seeing increases in stage 2 and stage 3 and a decrease in stage 1 ratings. The increase in taxpayers achieving a stage 2 rating is a trend that has been observed since the introduction of the Supplementary Guide, with many taxpayers now having a Board endorsed commitment to conduct periodic internal controls testing.

We are also observing taxpayers now undertaking periodic internal controls testing, resulting in an increase in stage 3 ratings. We anticipate that the number of taxpayers achieving stage 3 ratings will increase as taxpayers meet their commitment to undertake period internal control testing. Where we observe that taxpayers have not met that commitment, we will consider whether this is appropriate in their circumstances (for example, where there has been a change within the business that requires the governance framework to be updated prior to testing). Alternatively, we may need to consider whether, in the absence of testing being undertaken as per the commitment, BLC4 has in fact been effectively designed or whether a stage 1 rating is more appropriate.

Graphs 11 and 12 demonstrate the same comparison shown in graph 10, but for the significant pool and general pool taxpayers respectively. The trend identified above is observed for both the significant and general pool taxpayer subsets in the population, with significant taxpayers making substantial increases in rating between prior and latest review.

Graph 11: Comparison of first and latest income tax risk management and governance ratings for significant pool taxpayers reviewed more than once as of 30 June 2025

Graph 12: Comparison of first and latest income tax risk management and governance ratings for general pool taxpayers reviewed more than once as of 30 June 2025

 Industry comparison

Graph 13 shows the ratings for income tax risk management and governance, for first review rating and the latest rating for those reviewed more than once, on an industry basis. This shows an improvement in governance ratings across all industries.

Graph 13: Comparison of first and latest income tax risk management and governance ratings for Top,1000 taxpayers by industry, as of 30 June 2025

You can also view the overall income tax risk management and governance ratings for all assurance reviews completed by industry in table format.

Areas of focus

The following are the key issues that are arising in our recent reviews and the subject of discussion with taxpayers in their ongoing focus on tax risk management and governance. They build on the comments in prior years about specific board and management level controls, and taxpayers should consider these in conjunction with our Supplementary Guide, and ensure the controls are 'fit for purpose'.

BLC 4: Periodic internal control testing

Whilst we continue to focus on whether taxpayers have effectively designed tax risk management and governance frameworks, now that more taxpayers are achieving a stage 2 rating, we expect an increasing focus on periodic internal control testing in line with the commitment undertaken.

Periodic internal control testing must be undertaken by a suitably qualified reviewer, who is independent of the tax control owner. This can include the internal audit function where that function sits outside of the tax function with separate reporting lines.

Alternatively, the testing may be undertaken by a third party. Determining whether a third party is independent for the purposes of undertaking internal control testing will be a question of fact and degree. It is relevant to consider whether the third party has undertaken any of the responsibilities of the control owners, including where the third party has undertaken the design of any of the tax controls, or the third party has undertaken the income tax preparation work. If they are not considered independent, the taxpayer will not have met the requirements for a stage 3 rating.

In assessing whether a taxpayer has effectively designed and operating tax controls (i.e. has attained a stage 3 rating), we will look to understand the scope and the outcomes of the testing. The scope should be set out in a document put together by the appropriately qualified independent reviewer which has been signed off by the control owners.

To evidence the outcomes of the testing, we need to be provided with:

• the testing methodology and sample size selected
• the types of source documents relied upon by the tester
• the final testing results
• if issues are identified in the testing, an outline of the steps taken to address those issues
• board (or board delegate) acknowledgement of the test results and actions taken to address issues identified.

A taxpayer must have completed the testing to achieve a stage 3 rating and have addressed any issues identified.

Governance over third-party data

Governance over third-party data continues to be a key focus area for investment industry entities. Documented third-party data tax control frameworks that are designed effectively provide a key foundation for our ability to assure that:

• the right amount of tax has been paid
• the right amount of tax attributes have been reported to members or beneficiaries of managed funds.

The Governance over third-party data supplementary guide was published in 2022. For reviews commenced after 1 July 2024, we have provided a rating for governance over third-party data to relevant investment industry entities. We expect a stage 2 rating to be the industry standard i.e. all investment industry entities should have effectively designed controls in place.

We have completed 19 reviews that have assessed governance over third-party data. Excluding some where the funds have been, or will be, wound-up and therefore not rated, approximately 70% of those assessed have achieved a stage 2 rating.

We recognise that some entities within the investment industry perform investment and administration functions ‘in-house’ and do not have a traditional outsourced service provider relationship. However, our expectations for third-party data tax controls apply equally to these entities.

Outlined below are the particular areas of focus and issues we have identified during our reviews.

BLC 3: The Board is appropriately informed

We expect regular reporting to the Board on the performance of outsourced service providers, including whether there have been any material breaches of the service level agreements. We have observed that some reporting templates include limited or no information about the breaches. The Board should be briefed on how the breach was rectified and what controls have been put in place to prevent such a breach from occurring again.

BLC 4: Periodic internal control testing and Principle 4 – Independent assurance of the control environment of outsourced service provider

We observed most entities have commenced or are about to commence their periodic internal control testing or have included third-party data tax controls in the scope of their internal control testing plans.

Providing a copy of the GS007/ASAE 3402 report that does not contain sufficient tax control objectives in scope of the independent assurance report will not meet design effectiveness criteria. Seeking assurance from independent parties in relation to the accuracy of the data received and processed by outsourced service providers under Principle 4 requires the entity to not only obtain a high-quality independent assurance report, but also demonstrate through objective evidence that it reviews and understands the findings. Further, meeting Principle 4 requires evidence of findings and exceptions being reported to the Board, with a remediation strategy if exceptions are identified.

MLC 1: Roles and responsibilities are clearly understood

We have observed a lack of oversight of changes to the IT systems or process improvement activities of outsourced service providers by some entities. We expect the entity's tax function or its external tax adviser to consider the impact of any changes to the systems or process improvements that provide data for tax reporting or tax calculations.

MLC 3: Significant transactions are identified

We have observed that most entities have definitions of 'significant' or 'complex' investments, including both qualitative or quantitative factors. However, criteria as to how the complexity of each investment will be assessed, as well as the escalation and sign off processes, need to be clearly defined.

While most entities have a robust on-boarding tax due diligence process for new investments, exit or dissolution of complex or significant investments may often be overlooked. We recommend a post closure review is conducted to ensure the appropriate tax treatment.

We expect documented controls and processes for the planning, testing and migration of data, as well as a post-implementation check in relation to significant transactions or events where data migration occurs due to, for example:

• a change in outsourced service provider
• outsourcing of in-house functions
• migration of investment platform by outsourced service provider
• successor fund transfer.

Entities need to understand any differences in tax policies and the impact to tax data, and document any changes to the tax return procedures, tax controls and checklists.

MLC 6: Documented control frameworks

Entities need greater processes and controls to ensure the tax policy of the administrator is prepared in accordance with the tax law and reflected in the tax reporting relied upon by the entity, particularly for more complex entities.

We have identified an increase in international investments. Some entities have implemented additional tax controls for complex foreign investments. However, where a custodian provides tax reporting on these foreign investments, the entity needs to understand the custodian's tax controls (the gaps) to review the information provided by offshore investment managers.

Significant or new transactions, specific tax risks, and tax risks flagged to market

We seek to understand and review the income tax treatment of a taxpayer’s business activities, particularly atypical, new or significant transactions. We also review specific tax risks and determine whether concerns we have communicated to the market are present.

Ratings

We apply a consistent rating system when reviewing and assessing the income tax treatment of business activities including significant or new transactions and tax risks flagged to the market.

Ratings categories for tax risk management and governance on income tax

Colour indicator	Rating	Category description
	High	We obtained a high level of assurance that the right Australian income tax outcomes were reported in the taxpayer's tax returns.
	Medium	More evidence or analysis is required to establish a reasonable basis to obtain a high level of assurance.
	Low	More evidence or analysis is required to determine whether a tax risk is present.
	Red flag	Likely non-compliance with the income tax law.
_	Out of scope	We have not evaluated this item or have not expressed a rating.

Observations

Outcomes from the review of significant or new transactions and specific tax risks tend to have a significant impact on overall assurance ratings of Top 1,000 taxpayers and are the areas that need the most time and effort in our reviews. The number of areas assured will vary between taxpayers, and the quality of objective evidence provided can have a significant impact on the overall assurance rating.

Obtaining a low assurance rating for a particular risk does not mean that the taxpayer will automatically achieve overall low assurance. The overall rating will be influenced by several factors, including all ratings, nature of the issue and materiality. However, as outlined in our criteria for obtaining high assurance, a low assurance rating for some assurance areas will prevent a taxpayer from being able to achieve an overall high assurance rating. That is, taxpayers with low assurance ratings for these assurance areas will only be able to achieve an overall medium or low assurance rating, depending on the impact of that issue on the tax paid by the taxpayer.

As part of our review, we consider whether there are any public rulings or guidance, including practical compliance guidelines or taxpayer alerts, relevant to the significant or new transaction or specific tax risk. We consider the transaction or risk with respect to the rulings or guidance, and this may impact the intensity of our review.

Our reports outline our view on the tax treatment adopted for each significant or new transaction and specific tax risk and outline any recommendations we have on steps the taxpayers should take to address concerns identified. In some cases, we have escalated our concerns for further investigation by way of an ATO next action.

The latest Findings report Reportable tax position schedule Category C disclosures provides the aggregated disclosures made by companies for the 2024 income year. The report provides insights into the types of arrangements large companies are entering into, including arrangements in addition to the following information. We will verify a taxpayers disclosures made in the Reportable Tax Position (RTP) Schedule when assuring the relevant tax risks in our review.

The following sections outline common areas of concern and items that attract our attention. The statistics provided are based on combined assurance review data but are broadly consistent with the outcomes from the Top 1,000 tax performance program.

Transfer mispricing

Transfer pricing is a natural feature of the international tax system, requiring entities to deal with related parties on arm’s-length terms. Our concern is where arrangements or transactions are mischaracterised or mispriced, which may result in the tax base being shifted from Australia.

Failure to maintain adequate information to support transfer pricing positions is one of the most common reasons for a taxpayer obtaining a low or medium assurance rating for transfer pricing. Taxpayers need to maintain contemporaneous support for the positions adopted. It should clearly outline the source and evidence relied on to identify the actual circumstances of the related party dealings, including the functions performed, assets used, and risks borne by the entities involved in the transaction.

Concerns arise in respect of an international related party dealing where:

• the taxpayer's functional characterisation or the methodologies they have applied are not appropriate based on the substance of their arrangement resulting in inappropriate profit and tax outcomes
• artificial structuring, bifurcation and risk allocation of the taxpayer that are misaligned with commercial substance and result in the application of inappropriate transfer pricing methodologies
• the taxpayer's comparable data is not reflective of arm's-length outcomes in the facts and circumstances of their arrangement
• there have been changes to the taxpayer's transfer pricing policy or methodologies without an underlying change to the taxpayer's functional characterisation or related party arrangements.

Transfer mispricing (other than financing)

In the combined assurance reviews, about 66% of taxpayers had non-financing related transfer pricing arrangements reviewed. This is the most common assurance area.

This area relates to many dealings, ranging in varying complexity, and covers areas such as:

• inbound and outbound sale and purchase of tangible goods (largest category reviewed)
• management and administration services
• intellectual property and royalties
• licence fees
• sales marketing procurement and shipping arrangements
• provision and receipt of technical services
• research and development services.

The following ratings were issued for transfer pricing (other than financing).

Transfer mispricing (other than financing) – all CARs

Assurance rating	CAR program outcomes
High	19%
Medium	56%
Low and red flag	25% (2 red flag rating)

Taxpayers continue to achieve higher assurance ratings in subsequent reviews, with taxpayers considering the concerns raised in the earlier review and addressing them.

The following ratings were issued with a transfer mispricing (other than financing) assurance area reviewed more than once.

Transfer mispricing (other than financing) – matters reviewed twice

Assurance rating	Rating – first review	Rating – second review
High	15%	18%
Medium	53%	55%
Low and red flag	32% (4 red flag rating)	25% (2 red flag rating)

About 24% of the ATO next action audits, escalated either directly from a Top 1,000 review or from an ATO next actions review, include transfer mispricing issues (other than financing).

Licence fees and royalties continues to be the area that raises the most concern in our reviews, with the outcomes for this sub-category having the highest proportion of low assurance as compared to other sub-categories. In reviews completed in 2025, we continue to have concerns with licence fee and royalty arrangements reviewed, with just 4% achieving high assurance and 40% achieving low assurance. When reviewing this sub-category, we consider whether genuine economic benefits are received by Australian entities in relation to licensed assets for which payment is made to international related parties.

We will also consider the functions performed, assets used, and risks assumed by the relevant entities in connection with the activities that develop, enhance, maintain, protect, and exploit the licenced assets. We will request any analysis undertaken by the taxpayers in their transfer pricing documentation with respect to the Australian operations to determine the level of assurance over these arrangements.

We also continue to identify concerns with arrangements regarding the inbound and outbound supply of goods and services. We will consider these arrangements, where relevant, with regard to Practical Compliance Guideline PCG 2019/1 Transfer pricing issues related to inbound distribution arrangements, including taxpayers' self-assessment of the transfer pricing risk of their arrangements.

Financing (including related party financing)

In the combined assurance reviews, 54% of taxpayers had a financing area of assurance with the majority involving related party arrangements.

The following ratings were issued for financing (including related party financing).

Financing (including related party financing) – all CARs

Assurance rating	CAR program outcomes
High	24%
Medium	48%
Low and red flag	28% (1 red flag rating)

The most common financing arrangements that attracted low or red flag ratings related to interest bearing loans, Redeemable Preference Shares, cash pooling and convertible notes.

We continue to observe higher risk arrangements where pricing and conditions aren't consistent with third-party transactions. We continue to see arrangements that are structured to avoid interest withholding tax or entities that don't meet the eligibility criteria for claimed exemptions from withholding tax. Financing arrangements constitute a key area resulting in ATO next actions.

Other than transfer pricing on license fees and royalties, financing continues to be an area of the highest proportion of low and red flag assurance ratings as compared to other assurance areas.

For taxpayers that have been reviewed more than once, we have observed that there is an improvement in their financing assurance ratings, with less taxpayers being rated as low or receiving a red flag rating in subsequent reviews. The following ratings were issued with a financing area assured more than once.

Financing (including related party financing) – matters reviewed twice

Assurance rating	Rating – first review	Rating – second review
High	22%	23%
Medium	43%	56%
Low and red flag	35% (2 red flag)	21% (1 red flag rating)

Some of the reasons for improvement include implementing recommendations from the previous review. Taxpayers routinely provide their self-assessment against Practical Compliance Guideline PCG 2017/4 ATO compliance approach to taxation issues associated with cross-border related party financing arrangements and related transactions and supporting documentation. In some cases, taxpayers have refinanced out of or terminated higher risk arrangements.

We continue to apply the risk assessment framework published in PCG 2017/4 and consider the analysis prepared in transfer pricing documentations to review the arm’s length nature of financing arrangements. We expect taxpayers to provide contemporaneous evidence to support the commercial nature of their arrangements.

Approximately 42% of our combined assurance reviews covered an assurance area/s that related to PCG 2017/4. Where assurance areas covering PCG 2017/4 are reviewed more than once, we are witnessing overall improvement in assurance ratings. The ATO was recently successful in the Full Federal Court in relation to the Singtel related party financing case. The favourable decision provides further support to the ATO’s existing compliance approach to related party financing and will reinforce the positive assurance trend.

Hybrid mismatch

The full scope of the hybrid mismatch rules are now applicable for most income years being assured. In the combined assurance reviews, 48% of taxpayers have had at least one assurance area covering the hybrid mismatch rules.

The following ratings were issued for the hybrid mismatch rules.

Hybrid mismatch

Assurance rating	CAR program outcomes
High	46%
Medium	33%
Low and red flag	21% (2 red flag ratings)

Since the introduction of the hybrid mismatch rules and the commencement of our assurance of these rules, we have gradually seen the number of taxpayers achieving high assurance increasing. In respect of the reviews completed in 2025, a high assurance rating was achieved for 55% of areas covering hybrid mismatch arrangements. This increase is attributable to preparation, application and retention of appropriate processes and procedures.

When undertaking our assurance reviews, we refer to PCG 2021/5 Imported hybrid mismatch rule – ATO’s compliance approach and request evidence to support the processes and procedures taxpayers are taking to ensure compliance with the imported hybrid mismatch rule in Subdivision 832-H. It's important that this evidence is retained and provided when assuring this area.

Inability to provide this evidence is the most common reason for taxpayers achieving a medium or low assurance rating for the hybrid mismatch rules.

Structuring and arrangements designed to reduce Australian tax

We continue to see a small number of arrangements that are structured to reduce or avoid Australian tax in our assurance reviews. In those cases, the low assurance ratings and red flags are sometimes associated with related party transactions or other structured transactions (including third party back-to-back transactions) promoted or designed to achieve Australian tax savings, including the following:

• contrived related party financing arrangements, including the use of financing transactions with special terms designed to either  
  • artificially defer or avoid interest withholding tax while having obtained annual Australian income tax deductions
  • avoid or reduce dividend withholding tax upon repayment or redemption of contrived related party financing arrangements
  • otherwise obtain deductions or avoid assessable income including using arrangements designed to circumvent specific thin capitalisation debt and equity classification and hybrid mismatch rules
• related party arrangements designed to recognise costs through recharges or risk shifting
• intangibles arrangements designed to reduce or avoid Australian taxable income and/or reduce or avoid royalty withholding tax, including
  • arrangements of the kind described in Taxpayer Alert TA 2018/2 Mischaracterisation of activities or payments in connection with intangible assets or within the scope of Draft Tax Ruling TR 2024/D1 Income tax: royalties – character of payments in respect of software and intellectual property rights
  • intangible migration arrangements falling within the higher risk zones of PCG 2024/1 Intangibles Migration Arrangements
• arrangements or variation of arrangements of the kind described in Taxpayer Alert TA 2020/4 Multiple entry consolidated groups avoiding CGT – these arrangements broadly involve the transfer of assets to an eligible tier-1 (ET-1) and an ET-1 company exiting, or anticipating exit from, the multiple entry consolidated (MEC) group
• arrangements designed to avoid income being attributable to an Australian permanent establishment
• ‘inversion’ or the interposition of partnerships or other entities, designed to  
  • shift recognition of income or change or mischaracterise the nature of income
  • facilitate related party transactions to obtain Australian tax deductions
  • reduce or eliminate withholding tax
  • avoid the application of targeted or general anti-avoidance measures
• arrangements of the kind described in Taxpayer Alert TA 2020/5 – Structured arrangements that provide imputation benefits on shares acquired where economic exposure is offset through use of derivative instruments
• arrangements of the kind described in draft Tax Determination TD 2024/4 – Income tax: hybrid mismatch rules – application of certain aspects of the ‘liable entity’ and ‘hybrid payer’ definitions.

Where we have identified such arrangements and have concerns, the matters have generally attracted low assurance or red flag ratings and have been escalated for further ATO intervention through appropriate compliance activity.

Anti-avoidance issues escalated either directly from a Top 1,000 review or from an ATO next action review are present in approximately 67% of ATO next action audits, which reflects an increase from prior years.

Tax consolidation including MEC group changes

Our review of tax consolidation including MEC group structuring, acquisitions and disposals resulted in the following assurance ratings during the combined assurance reviews.

Tax consolidation

Assurance rating	CAR program outcomes
High	64%
Medium	26%
Low	10%

Anti-avoidance issues (including MEC restructuring) escalated either directly from a Top 1,000 review or from a next actions review are present in approximately 27% of ATO next action audits, which remains consistent with our observation in recent years.

Some of the issues that we have seen in relation to tax consolidation include changes in membership of Australian tax groups through internal transactions or decisions designed to:

• increase or accelerate deductible losses or depreciation
• generate Australian tax deductions for anticipated asset write offs
• avoid tax on anticipated terminations or disposals
• generate foreign tax credits.

Key issues for acquisitions in relation to the entry allocable cost amount (ACA) calculations and the tax cost setting amount, include:

• inadequate documentation to support the ACA calculations
• acquisition costs incorrectly excluded from the Step 1 amount and treated as blackhole expenditure
• asset characterisation for the purposes of allocating the entry ACA, including other intangible assets that would more appropriately be classified as goodwill but being classified as separate assets for tax consolidation purposes.

Thin capitalisation

The new thin capitalisation provisions contained in Subdivisions 820-AA and 820-EAB of the ITAA 1997 apply for income years commencing on or after 1 July 2023. In addition, the new debt deduction creation rules in Subdivision 820-EAA apply for income years commencing on or after 1 July 2024.

As the new thin capitalisation and debt deduction creation rules are likely to have a significant impact on Top 1,000 taxpayers, this will be a key focus area in combined assurance reviews.

We expect taxpayers are implementing strong processes to deal with the new thin capitalisation provisions, including appropriate consideration of the matters set out in the following guidance products:

• PCG 2025/2 Restructures and the thin capitalisation and debt deduction creation rules – ATO compliance approach
• Draft TR 2024/D3 Income tax: aspects of the third-party debt test in Subdivision 820-EAB of the Income Tax Assessment Act 1997.

Thin capitalisation continues to be an ongoing focus area for the CAR program, noting that 52% of taxpayers reviewed had a thin capitalisation risk.

The following ratings were issued for thin capitalisation which largely relate to the operation of the thin capitalisation rules prior to introduction of the above amendments.

Thin capitalisation – all CARs

Assurance rating	CAR program outcomes
High	76%
Medium	14%
Low and red flag	10% (1 red flag rating)

This area had a higher proportion of high assurance than other review areas. Most taxpayers relied on the safe harbour debt test.

In relation to the 10% of reviews with low or red flag ratings for thin capitalisation, the outcome continues to be attributable to some of the following reasons:

• unable to provide evidence for the safe harbour calculations or incorrectly calculated the safe harbour
• concerns with the application of the arm’s-length debt test, including contrary interpretative positions, inadequate documentation and evidence
• concerns with the application of the worldwide gearing method.

For taxpayers that have been reviewed more than once, we have observed that there is an improvement in their thin capitalisation assurance ratings. The following ratings were issued for the combined assurance reviews with a thin capitalisation assurance area reviewed more than once.

Thin capitalisation – matters reviewed twice

Assurance rating	Rating – first review	Rating – second review
High	68%	78%
Medium	20%	15%
Low and red flag	12% (2 red flag rating)	7% (0 red flag rating)

Losses

Revenue and capital losses continue to be an area that we commonly review. We seek to understand the origin of the losses and focus on utilisation of losses (continuity of ownership and business continuity tests), transfer of losses and available fraction calculations.

For the combined assurance reviews, the following ratings were issued for losses.

Losses – all CARs

Assurance rating	CAR program outcomes
High	69%
Medium	22%
Low	9%

Low assurance ratings continue to arise because of insufficient evidence to support the utilisation of the losses (in particular, satisfaction of the business continuity test) and available fraction calculations (including market valuations of entities that joined the TCG or MEC group).

For taxpayers that have been reviewed more than once, we have observed that there is an improvement in their losses assurance ratings.

Uniform capital allowances (UCA)

When assuring capital allowance claims, we consider the systems and governance processes adopted, as well as the supporting evidence provided.

For the combined assurance reviews, the following ratings were issued for UCA.

UCA – all CARs

Assurance rating	CAR program outcomes
High	48%
Medium	41%
Low	11% (2 red flag rating)

For taxpayers that have been reviewed more than once, we have observed that there is an improvement in their UCA assurance ratings. Most of the UCA reviews that obtained low or red flag assurance included recommendations for client next actions. The common issues identified include:

• inadequate documentation to support self-assessed effective lives of Division 40 assets and disclosure errors in tax returns
• incorrect asset classification and deductions claimed in relation to Division 40 and Division 43
• capital improvements versus repairs and maintenance
• incorrect low-value pool deductions.

Capital gains tax (CGT)

CGT events were assured in 41% of combined assurance reviews.

The following ratings were issued for CGT.

CGT – all CARs

Assurance rating	CAR program outcomes
High	67%
Medium	22%
Low	11% (1 red flag)

Of those that achieved a low assurance, the key issues included:

• concerns of the rollover exemptions or reductions
• active foreign business asset exemption – Subdivision 768-G
• market valuations supporting the cost base of assets (such as goodwill and intangible assets)
• the calculation (or evidence) of proceeds and insufficient evidence to support the CGT calculation.

Collective Investment Vehicle (CIV) specific issues

MIT/AMIT Eligibility

A fit-for-purpose tax risk management and governance framework is one area where we have continued to identify frequent specific issues for managed investment trusts (MITs) and attribution managed investment trusts (AMITs) that have an impact on specific tax issues. These include MIT and AMIT annual eligibility testing as part of the annual tax return preparation, lodgment and self-assessment process and documented controls for the management of Unders and Overs for AMITs.

Documented processes, procedures and controls within an entity’s tax control framework are needed to ensure these critical CIV specific risks are managed and mitigated consistently year on year.

Distribution reporting

We have maintained a strong focus on beneficiary reporting, to increase our level of assurance that these flow through vehicles are reporting the right amount of tax attributes to members such that they are able to report the right amount of income tax. Specific attention was dedicated to the identification of errors in AMMA statements/SDS and AIIR data and subsequent rectification.

Losses

We also scrutinized and highlighted the need for Funds to maintain appropriate records regarding loss generation, carry forward and utilisation with a focus on ensuring sufficient information is maintained to facilitate assurance in future years.

Superannuation fund specific issues

Structured arrangements that provide imputation benefits

Through our assurance activities, we have observed that certain large superannuation funds utilise derivative instruments to rebalance their economic exposure to Australian equities. In some instances, we are concerned that taxpayers may adopt a position that their short derivative exposures relate to all shares held in a company, whereas the facts suggest the exposures relate only to a subset of those shares.

In reviewing these arrangements, we consider the following factors:

• whether Australian shares were acquired contemporaneously with the establishment of short positions
• whether derivatives were used to shift economic exposure from Australian equities to other asset classes, and
• the pattern and duration of the derivative positions.

Our review of large superannuation funds found that while some funds had used derivatives to reduce exposure to Australian equities, this was broadly limited in scale and/or typically short-term or sporadic in nature.

To promote interpretative clarity and voluntary compliance, we are developing:

• a draft Taxation Determination outlining our views on when a derivative has a sufficient nexus to a parcel of shares for the purposes of determining whether the taxpayer maintains the requisite risk exposure to be entitled to franking credits, and
• a draft Practical Compliance Guideline providing guidance to large superannuation funds and collective investment vehicles (with total business income exceeding $250 million) on risk indicators associated with the use of derivatives that may attract our attention.

 

Project costs

We have observed many superannuation funds have either no, or insufficient, documented tax policies to correctly identify and characterise costs relating to projects that provide enduring benefits. This results in outgoings being treated as deductible under section 8-1 of the Income Tax Assessment Act 1997 rather than forming part of a cost base or claimed under black hole expenditure provisions. We have concerns some project costs of a capital nature are on-charged to superannuation funds by way of an increase in administration expenses.

We have also observed that where some funds do have documented tax policies, these policies don't always reflect the Commissioner’s view on labour costs related to creating capital assets as expressed in Taxation Ruling TR 2023/2 Income tax: application of paragraph 8-1(2)(a) of the Income Tax Assessment Act 1997 to labour costs related to the construction or creation of capital assets.

Of funds reviewed in 2025, 47% included project costs as an area of assurance, with 67% achieving a low assurance rating. Where we have low assurance over the claiming of outgoings relating to project costs, we have recommended clients implement or amend tax policies on project costs. We will follow up on the steps taken to address our recommendations before, or at the time of, our next review.

Corporate limited partnership distributions

We have observed an over reliance on third-party data to treat the components of corporate limited partnerships according to distribution statements, often where the characterisation of the distribution may not match the underlying economic activities. The distribution statements appear to display a potential over representation of return of capital characteristics. We expect superannuation funds to take steps to ensure amounts reported as capital and income reflect the underlying economic activities.

Over 68% of funds reviewed in 2025 included corporate limited partnerships as an area of assurance, with 31% achieving a medium assurance rating, and 69% at low assurance.

The release of the Third Party Data Supplementary Guide, and our assurance activities are intended to mitigate the risk by demonstrating better practices for obtaining relevant information to appropriately characterise distributions. We will consider further ATO engagement where appropriate, and follow up on the steps taken to address our recommendations before, or at the time of, our next review.

Alignment of accounting and income tax outcomes

We analyse the differences between the accounting and income tax results and seek to understand and explain any variances.

Ratings

We apply a consistent rating system when reviewing and assessing the alignment of accounting and income tax outcomes.

Ratings categories for alignment with income tax

Colour indicator	Rating	Category description
	High	We understand and can explain the various streams of economic activity and why the accounting and income tax results vary.
	Medium	Further analysis and explanation are required to understand the various streams of economic activity and/or why the accounting and tax results vary.
	Low	We identified concerns from our analysis of the various streams of economic activity and/or why accounting and tax results vary.
	Red flag	We do not understand and cannot explain the various streams of economic activity and/or why accounting and tax results vary.

Graph 14 shows the overall alignment of accounting and income tax ratings for the Top 1,000 taxpayers that have been reviewed, as at their most recent review.

Graph 14: Overall alignment of accounting and income tax ratings for Top 1,000 taxpayers reviewed, in their latest review, as of 30 June 2025

The below table shows the latest alignment rating for taxpayers in the population by pool.

Latest alignment rating by Top 1000 pool

Rating	Significant pool	General pool	All Top 1000 taxpayers
High	90%	90%	90%
Medium	9%	9%	9%
Low	1%	1%	1%

Graph 15: Alignment of accounting and income tax ratings for first reviews of Top 1,000 taxpayers and alignment of accounting and income tax ratings for Top 1,000 taxpayers after their latest review as of 30 June 2025

Graph 16: Comparison of first and latest alignment of accounting and income tax ratings for Top 1,000 taxpayers reviewed more than once as of 30 June 2025

Observations

Most Top 1,000 taxpayers achieved a high assurance rating (86%) for the alignment between accounting and income tax in their first review.

As shown in graph 16, we continue to see improvements in outcomes for taxpayers that have been reviewed more than once, with increased high assurance ratings from 86% (first reviews) to 93% (second reviews) as well as a decrease in low assurance ratings in latest reviews.

As compared to assurance and governance ratings, general and significant taxpayers have near-identical ratings for alignment between accounting and tax results.

We generally obtain high assurance over reported income and expenses as most taxpayers have audited financial statements and we can reconcile the financial statements with the starting profit and loss before tax disclosed in the relevant income tax return. The provision of detailed statements of taxable income has enabled us to obtain assurance over the adjustments from accounting results to calculate the taxable income and tax payable figures.

This is more challenging for MEC groups, foreign bank branches and stapled groups but we find that taxpayers have been able to provide sufficient evidence for us to understand the variances between the accounting and tax results.

For those taxpayers that don't achieve high assurance for this pillar of Justified Trust, the concerns continue to be due to the inability to provide detailed workpapers to support the permanent and timing differences.

We are also identifying CIV specific issues around alignment between accounting and tax results and the reconciliation of total net income/determined trust components to the accounting profit or loss. Accounting profit or loss is reported in the tax return before temporary and permanent adjustments for tax purposes are made to determine the total net income/determined trust components. These are undertaken for both ToFA and other arrangements for tax purposes.

Working papers are required to identify and provide details as to the purpose and reason (including the legal basis) for each adjustment made for tax purposes to enable an evidenced reconciliation.

These should include for ToFA adjustments, the applicable default or ToFA election utilised with reference to the financial accounts, and for other items the reason for the adjustment and the matching of the adjustments from the financial accounts. For example, black hole expenditure claims require evidence to support the value and incurrence of the expenditure and legal reasoning for the treatment under Division 40-880 of the ITAA 1997 for tax purposes, distinct from the identifiable deduction for accounting purposes from the financial statements and the reversal.

Where the financial accounts are consolidated, the working papers are required to provide a methodology to demonstrate the deconstruction including a breakdown of amounts applicable to each entity included within the financial statements, identifying the accounting profit or loss attributable to the entity under review and every other entity consolidated for financial accounting purposes.

Income tax next actions program

Where we identify concerns, we will notify taxpayers of our recommendations or any steps the taxpayer needs to undertake.

Client next actions

For ‘Client next actions’, we require the taxpayer to confirm the steps taken to address our concerns and recommendations. We may follow up the steps a taxpayer has taken at the next assurance review, or we may follow up a specific issue earlier. We will outline an expected timeframe for the follow up enquiry and expect taxpayers to provide further information in a timely manner.

ATO next actions

If we identify concerns that require further intervention through an ‘ATO next action’, we will indicate the matters that will be escalated for further review. We will notify taxpayers at the end of the combined assurance review if we are going to conduct further investigations through the ATO next actions program. We provide guidance to taxpayers as to how to prepare for the follow up engagement and what to expect. Preparation will assist with the earlier resolution of the matter.

ATO next actions are not assurance reviews. Next actions are a more intensive ATO investigation and can include specific or comprehensive income tax risk reviews and audits.

When the ATO engages with a taxpayer for ATO next actions, we focus on the issues that are of the greatest concern to us, such as issues that received a red flag or low assurance rating in the taxpayer’s assurance report.

ATO next action outcomes

For all combined assurance reviews completed in 2025, approximately 6% of cases had at least one issue escalated for ATO next actions. This is lower than the number escalated since the commencement of the combined assurance review program, with around 11% of reviews having been escalated. This is also a decrease in escalations from the 2024 financial year, with around 9% of reviews completed in 2024 escalating to ATO next actions.

The number of taxpayers referred under the combined assurance review program is significantly less than the number escalated in the earlier Top 1,000 tax performance program, where approximately 24% of taxpayers reviewed in a streamlined assurance review were escalated for further ATO action.

Since the beginning of the assurance program, we have completed ATO next actions engagements with over 278 taxpayers, and there are 78 engagements on hand as of 30 June 2025.

For these engagements in progress, 38% are risk reviews and 62% are audits. We continue to progress issues to audit, and we are also seeing more cases move directly to audit from an assurance review as our sophistication of detecting and knowing which issues require deep investigation has improved. In 2025, 60% of cases that have been escalated from an assurance review had progressed straight to an audit.

The risks addressed in ATO next actions engagements include transfer mispricing, related party financing, mischaracterisation with respect to payments for goods and services, structuring to avoid withholding tax, and not meeting the eligibility criteria to claim exemptions from withholding tax.

During 2025, we completed 35 ATO next actions engagements. Of these, 54% resulted financial outcomes and 11% were escalated to audit. The remaining engagements resulted in outcomes such as:

• further explanation provided by taxpayers satisfying our enquiries
• education of taxpayers and changes in taxpayer behaviour.

How to prepare for an ATO next actions engagement

We encourage taxpayers to prepare for their ATO next actions engagement. This includes preparing evidence to demonstrate they have addressed the actions noted in their assurance report and documented the steps that they have taken.

Taxpayers that choose not to adopt the recommendations in their assurance reports are encouraged to provide evidence supporting their position.

The better prepared and more open and transparent a taxpayer is, with contemporaneous evidence to support positions, the more likely the ATO next actions engagement can be resolved within a shorter timeframe. Taxpayers can also reduce their penalty exposure and it is less likely the matter will progress to an audit.

Most taxpayers do work with us to resolve identified concerns. The following are factors that are more likely to expedite resolution:

• provision of additional evidence requested in the Top 1,000 combined assurance review report
• amending the tax outcomes associated with the arrangement to reflect the ATO view, for example, moving to low-risk zones on areas covered by our practical compliance guides (provided no deeper structural issues exist).

The following are some factors which we are seeing that are more likely to entrench dispute or delay resolution:

• general statements of commercial purpose particularly where debt is introduced, or business operations are fundamentally changed
• vague or contestable evidence supporting classification of payment streams
• offers to reprice arrangements in exchange for not considering anti-avoidance rules  
  • anti-avoidance rules are not used as a negotiation point
  • where anti-avoidance concerns are raised, full and detailed analysis will be needed (supported by provision of evidence).