What a high assurance rating means for income tax
An overall high assurance rating for income tax means that we've obtained assurance that the taxpayer paid the right amount of Australian income tax or reported the right Australian income tax outcomes for the income year reviewed.
Where a taxpayer receives a high assurance rating for a significant or new transaction, a transaction with respect to a tax risk flagged to market, or a specific tax risk, this means that with respect to this issue, we obtained assurance that the right Australian income tax outcomes were reported in the taxpayer's income tax return.
The taxpayer can therefore rely on a high assurance rating to mean we won't initiate any additional review of the income year return (including assurance or audit activity), other than any issues listed in the future assurance plan or similar work plan noted as requiring further review, unless in exceptional circumstances. Similar work plan includes a taxpayer specific justified trust maintenance plan, issues register or annual review plan.
Only in exceptional circumstances will we apply compliance resources to review any of the relevant issues in the income year reviewed. The following circumstances are likely to constitute exceptional circumstances:
- Legislation is enacted, a final decision of the court or tribunal is made, or there is a precedential ATO view that applies retrospectively to the income years reviewed.
- A review is required to complement compliance activity or give effect to a determination of another government agency or regulator.
- There's a self-amendment or objection to the return for the income year reviewed (we'll review the return in relation to the issue covered by the self-amendment or objection and related issues).
- The taxpayer has subsequently notified us of a disclosure issue or error that should be corrected. Relevant factors for consideration include materiality, potential risk to revenue, likely proliferation in the market or consistency with the policy intent.
- There's a change of tax treatment or position by the taxpayer, or a taxpayer related to them in that year or in subsequent years (other than due to a retrospective change in law or a precedential ATO view). Particularly where the change in treatment means some amounts are never taxed or double benefits will be obtained for expenditure.
- It becomes apparent to us that full and true disclosure was not made.
- There is potential application of the general or specific anti-avoidance rules.
- Fraud or evasion becomes evident to us.