Active engagement promotes willing participation

When a taxpayer is open with us, we can understand their circumstances, offer the right services, and work with them where needed to get things right.

In March 2016, we published a Corporate tax transparency report that included tax information about 321 private companies. This helps the community understand what tax is being paid by private companies and how they contribute to the tax system.

Private groups are groups of companies, trusts, partnerships, super funds and other entities that are connected with each other and have common ownership. They include those groups controlled by high wealth individuals.

We analyse private groups and their associated entities using sophisticated data matching and analytic models. We typically engage on a whole-of-group basis, with the head of the group or their tax adviser rather than the separate group entities. This approach enables us to get a clear understanding of the group's overall tax performance and areas of potential concern, enabling us to tailor our engagement accordingly.

We engaged with over 10,000 clients, to share our profiles or discuss their tax position.

During our conversations, we get a better understanding of the commercial drivers and governance framework of the group. Where our view is different to that of the taxpayer, we aim to reach a shared understanding on any contentious issues, and provide the explanation or evidence needed for us to reach agreement.

We have held one-on-one engagements with the 140 largest private groups, including those controlled by high wealth individuals, to discuss their tax affairs with them as they occur. This is part of improving transparency and building strong relationships – so that tax positions are correctly reported by the time tax returns are lodged.

Due to improvements in the information we receive and our ability to analyse it faster, we were able to contact over 34,000 other privately owned businesses to let them know they had met their obligations. This represents about $1.6 billion of income tax correctly paid by these private businesses. Our aim is to improve our processes further, so that more private businesses are supported to correctly determine their tax position, and our systems can independently assure this.

In May 2016, we published detailed guidance on tax governance for private groups, based on extensive consultation with them and their advisers. This information will provide guidance on what good governance looks like and what attracts the ATO's attention.

For those seeking early advice, we have provided a single entry point through our Early Engagement for Advice initiative, to ensure the right people are there at the first contact to help provide the certainty needed.

In 2015–16, we implemented a number of initiatives to make better use of digital channels, such as using social media (including Facebook, Twitter and LinkedIn) for messages about fringe benefits tax lodgment, and continuing to improve the format of the Division 7A calculator on the ATO app.

We also worked with AusIndustry and provided guidance to agent groups through digital channels, enhancing their understanding of the Research and Development program and raising awareness about the risks of fraud.

During the year, we redeveloped the What attracts our attention information on our website to better:

  • inform the market of where unscrupulous advisers can put taxpayers at risk in tax planning schemes
  • alert taxpayers about areas where we commonly see mistakes, errors or poor tax governance (and where they may want to seek advice from the ATO or other trusted advisers).