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  • Category A: Tax uncertainty in your income tax return

    A category A RTP is a position where it would be concluded in the circumstances, having regard to relevant authorities, that what is argued for is about as likely to be correct as incorrect, or is less likely to be correct than incorrect.

    This does not include a position where you have exercised reasonable care and concluded in the circumstances, having regard to relevant authorities, that what is argued for is more likely to be correct than incorrect.

    For the purposes of the schedule, the phrases ‘about as likely to be correct as incorrect’, ‘more likely to be correct than incorrect’, and ‘relevant authorities’ take their meaning from MT 2008/2 Shortfall penalties: administrative penalty for taking a position that is not reasonably arguable.

    You must have regard to all matters relevant to the position – this includes anti-avoidance rules, integrity provisions, transfer pricing and market valuations.

    You must disclose a material position that does not have regard to relevant authorities, or if there are none, that is not based on a well-reasoned construction of the applicable statutory provision. You must disclose such a material position even if it is based on administrative or industry practice

    A category A RTP is material if the potential adjustment is equal to or exceeds your materiality amount. You only have to disclose a category A RTP if it is material.

    Last modified: 01 Jul 2016QC 49276