Post by Sapphire Capital on Oct 29, 2008 20:44:30 GMT 4
ATO and ANZ sign first annual compliance arrangement
Source: ITR - Joanna Faith
The Australian tax office (ATO) and ANZ bank have signed the country's first annual compliance arrangement (ACA).
Under an ACA, the tax office will issue the bank with a sign off letter confirming the outcomes of a joint risk assessment. To the extent of the disclosure, the ATO will sign off – and agree not to audit – low risk matters, and for higher risk issues, the company will know what those issues are early on.
According to an ATO statement, the agreement signals a more open and transparent approach to managing risks concerning income tax between the ATO and corporate Australia.
The signing supplements the existing compliance and risk management arrangements previously signed by the ANZ and the ATO for goods and services tax (GST) and fringe benefits tax (FBT).
"The benefits are the identification by both parties at an early stage of any tax issues so that they are not left unresolved with the prospect of interest and penalties," said Richard Snowden, a tax partner at Mallesons Stephen Jacques.
And these benefits may encourage other companies to follow ANZ's lead.
"Overseas experience suggests it may work reasonably well if a level of trust is built up between the ATO and applicant," said Snowden.
"Given the current need for transparency in financial markets, a more transparent tax position, which would be achieved via an ACA, might assist in giving shareholders greater confidence in the financial information, leading to a more robust share price," he added.
Source: ITR - Joanna Faith
The Australian tax office (ATO) and ANZ bank have signed the country's first annual compliance arrangement (ACA).
Under an ACA, the tax office will issue the bank with a sign off letter confirming the outcomes of a joint risk assessment. To the extent of the disclosure, the ATO will sign off – and agree not to audit – low risk matters, and for higher risk issues, the company will know what those issues are early on.
According to an ATO statement, the agreement signals a more open and transparent approach to managing risks concerning income tax between the ATO and corporate Australia.
The signing supplements the existing compliance and risk management arrangements previously signed by the ANZ and the ATO for goods and services tax (GST) and fringe benefits tax (FBT).
"The benefits are the identification by both parties at an early stage of any tax issues so that they are not left unresolved with the prospect of interest and penalties," said Richard Snowden, a tax partner at Mallesons Stephen Jacques.
And these benefits may encourage other companies to follow ANZ's lead.
"Overseas experience suggests it may work reasonably well if a level of trust is built up between the ATO and applicant," said Snowden.
"Given the current need for transparency in financial markets, a more transparent tax position, which would be achieved via an ACA, might assist in giving shareholders greater confidence in the financial information, leading to a more robust share price," he added.