Annual Compliance Arrangements with Large Corporate Taxpayers

ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers
94
Conclusion
4.74 The ATO’s ACA process map sets out high level tasks and activities for the administration of all ACAs, irrespective of tax type or BSL. The process involves three phases relating to the implementation and annual management of ACAs: negotiation administration throughout the year and end‐of‐year review.
4.75 By design, there are necessarily some differences across ACAs to tailor terms and conditions to the individual circumstances of taxpayers. As noted by
ATO reviews and this audit, there is a need for the ATO to have a process in place to manage and monitor deviations from the generic ACA during the negotiation phase. The ANAO also found some inconsistencies in the process that is followed throughout the year and at the end of the year. There is scope for the ACA Oversight Committee as well as individual BSLs to monitor and manage these differences more clearly and purposefully.
4.76 ACA guidance states that the two main requirements of an ACA are that an ACA taxpayer’s governance and tax risk management is sound and an
ACA taxpayer works with the ATO in an open and collaborative way, including through disclosure and ongoing dialogue about material tax risk. Despite this, the ATO does not retain information related to disclosures in a consistent manner and does not analyse disclosure information to monitor the performance of ACAs.
4.77 The recording of information related to ACAs is problematic as documents maybe in a variety of locations, not only in the enterprise wide case management system. This means that the ATO does not have assurance that ACAs are properly managed and that all requirements have been met. Nor does it have the capacity to analyse the data provided by ACA holders to assess their effectiveness. Administration of Annual Compliance Arrangements
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4.78 An analysis of the time taken to complete various stages of the ACA process also shows that in many instances the ATO is not meeting its own timeliness targets and the ANAO’s analysis suggests that some of these targets are not realistic. Currently there is no systematic quality assurance review of
ACA cases. They should be included in the ATO’s enterprise wide quality assurance processor included in quality assurance processes at the BSL level. Ian McPhee
Auditor‐General Canberra ACT
6 November 2014

ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers
97

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