ATO To Streamline Large Business Tax Audits

by Mary Swire, Tax-News.com, Hong Kong

01 September 2006

The Australian Tax Office (ATO) will aim to complete large company audits within two years using more efficient, open and transparent processes, Tax Commissioner Michael D’Ascenzo announced on Wednesday.

“We have worked closely with large corporates to come up with a mutually agreed way forward to streamline audits and risk assessments,” D’Ascenzo said at the unveiling of the large business and tax compliance booklet, which took place at a symposium in Sydney.

The Commissioner explained that the ATO has worked closely with large corporates to come up with a mutually agreed way forward to streamline audits and risk assessments.

He continued:

“We are committed to reducing audit timeframes to two years through more efficient processes, including better communication and agreed project plans.

“We clearly explain the stages of the audit, its scope, what we will do if we find new issues to follow up, or if we decide an issue is not worth pursuing. We will also provide an indication of information we might require, and the reasons for seeking that information."

“The aim is to smooth the way for business prosperity while maintaining a level playing field for business.”

Since the release of the first booklet in 2003, boards have shown increasing interest in improving the way tax and governance matters are handled in their businesses, including entering into forward compliance agreements with the Tax Office.

“Two large corporates are close to signing up to ‘forward compliance agreements’ and we are hopeful others will follow suit,” D’Ascenzo revealed.

These voluntary agreements between a business and the Tax Office aim to provide greater certainty for companies, and can reduce the likelihood of costly audits.

“I am confident the collaborative approach we have taken in developing this booklet heralds a new era for tax compliance with the large corporate sector,” D’Ascenzo concluded.

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