Efforts to encourage participation

ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers
62 disseminated through speeches by the Commissioner and senior ATO officials at major conferences attended by large business representatives. Of these
50 taxpayers, only five had an ACA in place by 30 June 2010, of which three were previously in forward compliance arrangements (FCAs).
86
3.20 Following the initial low number of acceptances, in 2010 the ATO expanded the offer of an ACA beyond the top 50 corporate taxpayers. Different approaches were adopted by the then Large Business and International (LB&I) and Indirect Tax (ITX) BSLs, with client relationship managers visiting the top
100 corporate taxpayers by turnover and offering ACAs on a selective basis. The ITX BSL offered ACAs to taxpayers as an acknowledgment of good compliance behaviour. Concessions around penalties and interest and the extension of thresholds for correcting GST mistakes were offered in recognition of a taxpayer’s good compliance. In contrast, the LB&I BSL generally targeted taxpayers to maintain their good compliance behaviour or to improve their compliance behaviour and lower their risk profile. This approach was seen as an opportunity to influence the taxpayer’s compliance behaviour through more robust disclosure processes. Take up of ACAs increased throughout
2010–11, with 17 ACAs being in place by 30 June 2011 (seven administered by
LB&I, 12 by ITX and six by the Small and Medium Enterprises BSL).
3.21 In 2011‒12, the ATO again revised its approach to identifying those corporate taxpayers suitable for ACAs. Rather than focussing solely on turnover, the ATO also considered compliance risks, as assessed through its
RDF (as previously discussed. The ATO wrote to 35 of the 135 large corporate taxpayers then rated as key, specifically inviting them to enter into an ACA. Of these, five have subsequently entered into an ACA with the ATO.
3.22 Alternatively, entities could approach the ATO requesting an ACA. While most ACAs have been initiated by the ATO (18 as indicated in Table 3.3), six were sought by taxpayers. These taxpayers entered into ACAs for different reasons including reducing compliance costs differentiating themselves from other taxpayers requiring real‐time certainty after being subject to increasing compliance activity by the ATO; and replicating similar relationships that overseas affiliates had with their revenue authorities. Of the
86 FCAs were similar to ACAs but the process to assess a taxpayer’s governance and tax risk management was more rigorous and expensive for the taxpayer and the ATO.

ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers
62 disseminated through speeches by the Commissioner and senior ATO officials at major conferences attended by large business representatives. Of these
50 taxpayers, only five had an ACA in place by 30 June 2010, of which three were previously in forward compliance arrangements (FCAs).
86
3.20 Following the initial low number of acceptances, in 2010 the ATO expanded the offer of an ACA beyond the top 50 corporate taxpayers. Different approaches were adopted by the then Large Business and International (LB&I) and Indirect Tax (ITX) BSLs, with client relationship managers visiting the top
100 corporate taxpayers by turnover and offering ACAs on a selective basis. The ITX BSL offered ACAs to taxpayers as an acknowledgment of good compliance behaviour. Concessions around penalties and interest and the extension of thresholds for correcting GST mistakes were offered in recognition of a taxpayer’s good compliance. In contrast, the LB&I BSL generally targeted taxpayers to maintain their good compliance behaviour or to improve their compliance behaviour and lower their risk profile. This approach was seen as an opportunity to influence the taxpayer’s compliance behaviour through more robust disclosure processes. Take up of ACAs increased throughout
2010–11, with 17 ACAs being in place by 30 June 2011 (seven administered by
LB&I, 12 by ITX and six by the Small and Medium Enterprises BSL).
3.21 In 2011‒12, the ATO again revised its approach to identifying those corporate taxpayers suitable for ACAs. Rather than focussing solely on turnover, the ATO also considered compliance risks, as assessed through its
RDF (as previously discussed. The ATO wrote to 35 of the 135 large corporate taxpayers then rated as key, specifically inviting them to enter into an ACA. Of these, five have subsequently entered into an ACA with the ATO.
3.22 Alternatively, entities could approach the ATO requesting an ACA. While most ACAs have been initiated by the ATO (18 as indicated in Table 3.3), six were sought by taxpayers. These taxpayers entered into ACAs for different reasons including reducing compliance costs differentiating themselves from other taxpayers requiring real‐time certainty after being subject to increasing compliance activity by the ATO; and replicating similar relationships that overseas affiliates had with their revenue authorities. Of the
86 FCAs were similar to ACAs but the process to assess a taxpayer’s governance and tax risk management was more rigorous and expensive for the taxpayer and the ATO. Positioning of ACAs within the ATO’s Compliance Framework
ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers
63 18 ACAs initiated by the ATO, five taxpayers had previously held a FCA and one had a GST Cooperative Compliance Advance Agreement.
87

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