About the program
We use a risk-based approach to:
- identify groups with higher risk and consequence tax reporting
- support you to meet your tax obligations
- apply compliance approaches to deal with non-compliant behaviours.
By doing this we also strengthen community confidence that privately owned and wealthy groups are paying the right amount of tax.
The information and findings we gather from working with private groups improves our awareness of the population and risk environment. It also complements our development of a range of differentiated response strategies.
Through our risk management and compliance approaches, we have improved our knowledge and understanding of:
- business operating environments
- tax risks and issues that are present or may be emerging.
We have learned from our work across the different industries and risks over the past few years. We're well-positioned and capable to respond to existing and emerging risks and issues with effective strategies and tailored activity.
For more information, see Risk reviews.
Who is covered by the program
The private groups tax performance program (program) covers both:
- private groups linked to Australian resident individuals who, together with their associates, control wealth of more than $5 million
- businesses with an annual turnover of more than $10 million, that are not public or foreign owned.
The program has a significant focus on high-wealth private groups. These groups are defined as Australian resident individuals who, together with their associates, control wealth of more than $50 million. The high-wealth income tax gap estimate provides an indication of high-wealth private groups' compliance and participation in the tax system.
Our focus is on engaging with:
- high-wealth private groups that exhibit risky behaviours or characteristics
- private groups
- that are experiencing rapid growth
- that are increasing foreign links
- that are looking to expand offshore
- where controlling individuals are transitioning to retirement
- foreign investment focused on acquiring high-value assets in Australia and structured wealth extraction
- private groups with identified risks or issues aligned to our priority areas of focus.
The program doesn't cover private groups or businesses that are already part of the Top 500 private groups tax performance program.
We use data-matching and analytic models to identify wealthy individuals and link them to associated entities. We consider the group of entities together.
The private group approach helps us understand your business better. It enables us to provide a tailored experience, including focusing on specific potential areas of risk and entities within the group.
For more information, read about the:
How we tailor our approach to you
We continue to improve our understanding of your business and the environment within which you operate.
To support our understanding, we use sophisticated data and analytics techniques. We use intelligence and insights gathered through our engagements to identify trends, priority and emerging risks specific to private groups.
Through our increased understanding, we tailor our approach and develop strategies to support you to identify and mitigate tax risks within your private group.
We'll work with you by:
- letting you know about issues that attract our attention
- publishing public advice and guidance on tax issues for private groups
- providing certainty on significant commercial deals through early engagement and pre-lodgment agreements
- conducting risk-based leveraged strategies, reviews and, where appropriate, audits.
Types of engagement you can expect
Our engagement with you may include:
- reviewing areas of correct tax reporting risk specific to your business
- leveraged engagements for areas of potential risk that are generally more easily resolved.
We'll work with you to resolve any concerns or issues that arise from our risk modelling and analysis of data from:
- income tax returns
- business activity statements (BAS)
- third party data sources.
Reviews
We use a combination of comprehensive and specific reviews. Typically, we use:
- comprehensive reviews where we have identified multiple potential issues or risks, usually across multiple related entities, within your group
- specific reviews where we have identified 1 or 2 potential issues or risks within your group, that often relate to a single entity.
Reviews generally focus on issues that can be resolved by getting more information from you.
We base case selection on our profiling and data analytics. These relate to:
- the presence of key risks and issues
- any new emerging issues affecting private groups.
We're transparent about priority areas where we'll be directing our attention and investing additional compliance resources. See what attracts our attention and areas of focus for more examples.
We encourage and support good tax governance as it helps taxpayers to meet their tax obligations.
Where groups are unwilling to work with us in an open and transparent way, we:
- take firmer action, such as audits
- use our formal information gathering powers.
See risk reviews for more information on our reviews.
GST integrated reviews
We also undertake goods and services tax (GST) integrated reviews as part of the program.
These reviews consider potential GST risks or issues. We'll request information and documentation from you in support of your GST treatment.
Voluntary disclosure
When we notify you of your review, we encourage you to:
- review your records and recent significant transactions or business events
- correct any mistakes by making a voluntary disclosure.
When reviewing your records you may wish to contact your adviser and discuss any tax risks you identify. You can make a voluntary disclosure at any time during a review.
Tax governance and reporting
Effective tax governance means having oversight frameworks with clear processes and procedures. This supports decision making and ensures you meet your tax and super obligations.
When we engage with you as part of the program, we may discuss and review your tax governance processes. This is because good tax governance helps you meet your tax and super obligations.
To ensure your risks are mitigated and to improve certainty that the group is paying the right amount, you need:
- good tax governance
- internal controls
- business processes and procedures.
Clearly defining and documenting the roles and responsibilities within a group and sharing them with advisors is a key governance requirement.
To ensure correct tax treatment and reporting, it's important you maintain:
- oversight and independent approval of the preparation of tax returns and BAS
- segregation of duties with review
- checking of material transactions.
Well-designed control systems and reporting frameworks with good governance, checking and review are key to:
- ensuring accurate treatment
- record keeping
- identifying mistakes and correcting them.
In broad terms, a business with a focus on ensuring risk and issue mitigation will apply:
- well-designed and documented corporate and tax governance frameworks
- internal controls and compliance practices appropriate to the size and complexity of the business
- systems that respond to business growth and increasing complexity through improvement in governance focus and sophistication, internal controls, recording and reporting
- use of automated and integrated business systems that are regularly reviewed for suitability and accurate performance
- suitably capable and skilled personnel with regular development and ongoing responsibility to understand, manage and report tax and super obligations
- segregation of duties across reporting and approval functions
- regular review and reconciliation of business systems reporting
- review of the tax treatment of large, unusual and irregular transactions
- established procedures for monitoring tax reporting and correcting mistakes and errors
- ensuring that large, unusual and irregular transactions, including those between group members and associates, are properly recorded and included in tax returns
- seeking advice as the business grows and for the treatment of new, unusual, one-off and large transactions.
More information and support
For more information you can:
- read about corporate governance and tax governance
- work out how to correct a mistake.
For more support, see: