Early Engagement and Dispute Resolution

Transcription

1 Early Engagement and Dispute Resolution Privately owned and wealthy groups experience Greg Reed Acting Senior Director, Engagement and Assurance Services, Private Groups and High Wealth Individuals Australian Taxation Office 11 February 2016

2 Outline Privately owned and wealthy groups o Who are they? Reinventing the ATO o What we heard o Our approach o What attracts our attention Early engagement o Early engagement approach o Mutual Expectations o Early engagement for advice Early Dispute Resolution o It s in everyone s interest

3 Privately owned and wealthy groups Who are they? Australian-resident individuals who, together with their associates, effectively control an estimated net wealth of $30 million or more. 4,610 High wealth Individuals 8.7% Of private groups have links to at least one HWI In revenue reported: $34.8 billion in tax revenue $20.4 billion in net GST $35.6 billion in net PAYGW a total of $90.8 billion in revenue 33.6% Of private groups have links to at least one WA There are over 150 of the largest privately owned and wealthy groups with either: Turnover of $1 billion or more and/or net assets of $500 million or more Market leaders 57.7% Of private groups have no links to an HWI or WA 155,270 Private groups Economic groups with an annual Economic groups with an turnover annual of greater turnover than of greater than $2 million $2 million that that are are not not public public groups groups or foreign-owned. 114,870 Wealthy Australians The majority (97%) of privately owned and wealthy groups are represented by a registered tax agent. Australian-resident individuals who, together with their associates (often including small business enterprises), effectively control an estimated net wealth of between $5 million and $30 million. Find out more at (search for private groups )

4 Reinventing the ATO What we heard To see better use of technology, to get quicker outcomes and reduce compliance costs More certainty and timely advice To know what the ATO knows means there are opportunities to self-correct and provide information Tailored engagement that s timely, efficient and sensitive to business needs Find out more at

5 The privately owned and wealthy group experience From what you told us, we developed the Reinventing the ATO Blueprint which includes the privately owned and wealthy group experience The Blueprint

6 Every year counts

7 Online resource for privately owned and wealthy groups Previously NOW Tax compliance for small-to-medium enterprises and wealthy individuals A new online resource dedicated to privately owned and wealthy groups: relevant and up-to-date information, including Recent developments guidance on the kinds of issues that draw our attention. Find out more at

8 What attracts our attention Current issues Retirement schemes Capital verses revenue distinction Research and development tax offsets Moving business and business assets into SMSFs inappropriately Pre- and post-cgt assets on transition and disposal International tax issues Find out more at (search for attracts our attention )

9 Risk Differentiation Framework Lower risk Considered to have acceptable tax and economic performance Engagements and service focus on making it easy to get things right and may include: Help and education initiatives Advice and guidance services Pre-lodgment support Higher risk Higher risk categorisation may warrant us asking further questions Does not assert non compliance Assurance activities may include Pre-lodgment correspondence Risk Reviews Audits Find out more at (search for how we assess risk )

10 Early engagement overview Broad principles Building and actively promoting strong working relationships It s about establishing a productive and professional working relationship built on transparency, so that we can offer the right services, assurances and engagement. Understanding the business of the private group, including tax governance With your help, we ll be timely, efficient and sensitive to the impact on the group s business and affairs. By understanding the business better, knowing the stage of the business lifecycle, we can streamline our engagement. Face to face discussions about the private group and what we know Using the private group approach, centred on the controlling mind of the group, from a whole of tax and super perspective, we ll confirm our understanding of the perceived tax risk, and engage in real time. Being transparent in our communication and decision making We ll give the level of certainty needed about tax outcomes for the duration of our engagements, clear contact points and ways to reduce timeframes to minimise impacts on business.

11 Early engagement approach Mutual expectations We will: be transparent in explaining why we have contacted you, what we know about you and any concerns, so there are no surprises provide information about what we know using an Income tax risk report ask for information that will help us understand your group structure/tax consolidated group (and changes to it) and your whole tax and super circumstances so we can provide a tailored approach ask you about your tax attributes and financial information including how the group has been financed (e.g. offshore funding arrangements and any intra-group transactions) where applicable work through any significant transactions or commercial deals so we can provide the right services to help you get things right and provide you with the level of certainty needed build an ongoing one on one relationship and point of contact with you so we can help you get things right from the start seek to understand your tax governance framework

12 Early engagement approach Mutual expectations We ask that you: be open and transparent with us so we can understand your circumstances, issues and concerns - two-way transparency. This would ordinarily include contacting us when you are contemplating a significant transaction or arrangement so we can give the level of certainty you require before or at the time of the event have the right people available for our ongoing engagements. This would ordinarily include the controlling mind / principal of the groups / high wealth individual, the tax and/or legal adviser review your tax governance including any improvements if needed

13 Early engagement for advice Making a request For private, class, and product rulings, we are adopting an early engagement model for complex matters early engagement discussions prior to seeking formal advice. For easier access to this service (what you need when you need it), use our two new entry points found in the privately owned and wealthy groups online resource: Call back request Make a call back request and one of our senior officers will call you to answer any questions you have on this approach and whether it is suitable to your circumstances. Early Engagement (advice) request START the process by submitting your completed downloadable PDF to a dedicated mailbox Find out more at (search for early engagement advice )

14 Early Dispute Resolution Our Aim

15 Alternative Dispute Resolution Types of ADR processes 1. Facilitative process (Mediation and In-house facilitation) 2. Advisory process (Neutral evaluation) 3. Determinative process (Arbitration and Expert determination) 4. Blended dispute resolution process (Conciliation and Conferencing)

16 Alternative Dispute Resolution What Why When How Dispute resolution where an independent person (an ADR practitioner) assists people in dispute to resolve or narrow the issues between them Flexible Cost effective Private and confidential Self-directed Cost of litigation out of proportion to possible benefits Wanting to narrow or clarify facts and issues in dispute or if evidentiary issues arise Maintain or improve relationship between parties in dispute By agreement between the parties Find out more (search for Alternative dispute resolution ) PS LA 2013/3: Alternative Dispute Resolution (ADR) in ATO disputes

17 Questions? COMMONWEALTH OF AUSTRALIA 2015 This presentation was current in November 2015

18 Thank you ato.gov.au/privategroups