Annual Compliance Arrangements with Large Corporate Taxpayers
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| Recommendation Nob b 4.42 To support ongoing assessment of the effectiveness of ACAs to identify and mitigate tax risks in real time, the ANAO recommends that the ATO enhance its record keeping of taxpayers disclosures of contentious tax positions, and the strategies developed to deal with these disclosures. ATO response Agreed. Administration of Annual Compliance Arrangements ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers 85 4.43 The ATO recognises the need to ensure transparency of its processes through improved record keeping, as well as maximising the benefits of the ACA program through more sophisticated use of the information collected. 4.44 Monitoring disclosures and the effectiveness of the mitigation strategies to address these risks will help to highlight any similarities and differences between BSLs in the extent and nature of disclosures, which would also help the ATO to better tailor ACAs to the different taxes covered. 4.45 Consistent with the ANAO’s findings, the ATO’s 2012 Review of Annual Compliance Arrangements also identified that, although there was relative consistency in the wording of disclosure clauses, there have been inconsistent levels of disclosure from taxpayers under an ACA. This inconsistency related to the timing and nature of disclosures and the concept of materiality. In response to this finding, the ATO has modified the wording of the ToA to help clarify the conditions surrounding disclosures and reviewed the guidance provided to ATO officers in relation to disclosures. Relationship and governance arrangements 4.46 The governance arrangements for an individual ACA involve ACA communication representatives, a steering committee and a working group. The communication representatives are the primary points of contact for each party for matters relevant to more than one tax. The steering committee involves representatives from the ATO and the taxpayer. It is established to provide governance oversight of the operation of the ACA and it has ultimate responsibility for the operation of the ACA. The seniority of members of this committee varies across ACAs. Most ACAs do not specify the membership of the steering committee, instead stating that the members should have the necessary authority, seniority and level of independence from ACA working groups to enable appropriate oversight of the operation of the ACA. Others had nominated specific positions as being on the steering committee. 110 4.47 In addition to a steering committee, a working group is established for each active tax schedule to provide support to the steering committee. Membership of the working groups) is determined at the discretion of the 110 Four ACAs required Assistant Commissioners to be on the steering committee, one required a National Director and the ACA representatives to be on the steering committee, one required two Deputy Commissioners and one required three Senior Executive Service members to be on the steering committee, including the Second Commissioner. ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers 86 parties and usually includes members from the ATO’s compliance team and senior officers from the taxpayer’s tax area. 4.48 In terms of managing multi‐tax ACAs that cross BSLs, four taxpayers advised that they would prefer to see a more unified approach from the ATO. One ATO officer responsible for 11 GST ACAs (of which five include cross BSL ACAs) also advised that there is scope to work more closely across BSLs where there are multiple taxes included in the ACA that are administered in separate BSLs. This was also part of the rationale for establishing the ACA Oversight Committee in June 2012. 4.49 The ATO’s 2012 Review of Annual Compliance Arrangements also found that there was scope to improve the real‐time engagement approach where ACAs were being managed across BSLs. The review stated that real‐time engagement should occur as one ATO and not replicated for each arrangement. The review noted that although client teams are monitoring the media and Australian Securities Exchange announcements to varying degrees, and irrespective of other ACAs, the LB&I now PG&I] team should liaise with their Indirect Tax business line colleagues to be briefed on any movements or irregularities in the monthly Business Activity Statements lodged. Any irregularities could instigate a proactive real time discussion with the client and may elicit disclosures that may not have otherwise been initiated by the taxpayer at that time. It would further demonstrate to the taxpayer that we the ATO] have areal time engagement with them. 4.50 In this light, there would be merit in the ATO continuing to enhance the role of the ACA Oversight Committee in coordinating ACAs across BSLs. The ATO could also identify better ways of working more closely across BSLs at the individual team level. This might include formalising meetings between ATO compliance officers that are not in the same BSL or enhanced information sharing arrangements regarding ACA holders. Currently meetings between ATO compliance officers indifferent BSLs only occur on an ad hoc basis and information sharing across BSLs occurs predominantly at the ACA Oversight Committee or the steering committees rather than at the compliance team level. Download 1.48 Mb. Share with your friends:
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