In a recent speech, Deputy Commissioner Large Business and International, Mark Konza, spoke about the ATO’s compliance approach to large taxpayers. He spoke of 3 initiatives the ATO has been undertaking to increase compliance and minimise risk including:
- pre-lodgment reviews (PCRs);
- use of the reportable tax positions schedule; and
- increased guidance on information gathering and having a cooperative relationship with taxpayers.
Among other things, Mr Konza said the 2 consolidation risks the ATO is currently focusing on include the rights to future income and residual tax cost setting which have been identified through private rulings, objections, and active compliance work. He said the ATO has already contacted various taxpayers regarding their deduction claims.
In relation to profit shifting, Mr Konza said the ATO will continue its focus on restructures that erode the tax base, including the use of service hubs, alienation of intellectual property, and digital duplication. He said the ATO is currently having a “closer look” at 170 taxpayers who cover 40% of the international related party dealings in industries such as mining, banking, manufacturing, and wholesale trade.
[LTN 57, 25/3/13]