Annual Compliance Arrangements with Large Corporate Taxpayers
Identifying taxpayers suitable for an ACA
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| Identifying taxpayers suitable for an ACA Risk Differentiation Framework 3.5 The compliance strategy for large corporate taxpayers is based on a risk‐management approach that the ATO has adopted to form a view of relative taxpayer risk of noncompliance and determine the intensity of its compliance response in a coherent and considered way. The relative risk profile of the population of large corporate taxpayers is assessed primarily through the Risk Differentiation Framework (RDF), which is a risk modelling tool. In assessing risk, the RDF considers the likelihood of a taxpayer’s noncompliance in meeting their tax obligations and consequence of noncompliance on tax revenue, given the turnover of the taxpayer, influence on other taxpayers and impact on community confidence. 3.6 Using the RDF, the ATO places large corporate taxpayers into one of four broad risk categories or quadrants, according to likelihood and consequence risk ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers 56 3.3 As previously discussed, ACAs are voluntary arrangements that offer large corporate taxpayers potential benefits, such as greater practical certainty of their tax positions, concessional treatment for penalties and interest, and higher levels of accessibility to the ATO. In return, these taxpayers are required to have good governance and risk management processes as assessed by the ATO and to disclose tax risks in real time. Despite the recognised benefits, only 24 taxpayers had an ACA in place as at July 2014. 3.4 To assess the ATO’s processes for selecting taxpayers for an ACA, and the role of ACAs in the ATO’s compliance framework for large corporate taxpayers, the ANAO examined the current approaches to identifying taxpayers for an ACA; efforts to encourage participation in the arrangement since its inception in 2008; and strategic positioning of ACAs in the compliance framework for large corporate taxpayers. Download 1.48 Mb. Share with your friends:
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