Large public and multinational groups with turnover above $250 million comprise what the ATO calls the ‘Top 1000’ and it has a ‘performance program’ to review the income tax affairs of those that that they do not engage with through pre-lodgment compliance reviews or annual compliance arrangements.
On 23 July 2018, the ATO uploaded a page advising that timing, of Top 1000 reviews, is determined by a number of factors, including other engagements with the ATO. In particular, they advise that they are starting to align the timing of these reviews with their ‘transfer pricing’ Advance Pricing Arrangement (APA) program (to minimise potential duplication between the programs).
They advise, that, if you are within the scope of the Top 1000 program and:
- approach the ATO, to enter into an APA, they will seek to align the timing of their review, with the APA early engagement stage.
- are currently in APA negotiations, they will seek to align the timing of our Top 1000 review with the APA negotiations.
- are at the end of the APA negotiation stage, and contemplating signing the APA, they may seek to align the timing of their review with the first annual compliance report.
- have an existing APA, they will seek to align the timing of their ‘performance’ review with their review of the (next) annual compliance report and will exclude transactions covered under the APA.
How closely they can align their activities, under the two programs, will depend on the facts and circumstances of each taxpayer.
FJM 14.8.18
[ATO website: Top 1000 Performance Reviews; LTN 141, 25/7/18; Tax Month – July 2018]
Comprehension questions (answers available)
- Does the ATO refer to large public and multinational groups with a turnover above $250m as their ‘Top 1000’?
- Does the ATO conduct ‘performance’ reviews for this Top 1000.
- When does the ATO try to commence these reviews?
- Does this include time the ATO spends on APA’s?
