ato logo
Search Suggestion:

Mutual arrangements for certainty

Read about the arrangements we offer to provide you with certainty on high-risk arrangements before you lodge.

Last updated 23 January 2019

You can:

Commercial deals

We engage early with privately owned and wealthy groups to offer a pre-lodgment compliance agreement for commercial deals and restructure events.

We define a commercial deal as any significant business transaction that may affect the structure of your business.

See also:

Annual compliance arrangements

An annual compliance arrangement (ACA) is a voluntary administrative arrangement between us and you to govern our compliance relationship.

An ACA provides a level of practical certainty for you by mutually resolving tax risks as soon as possible, generally prior to lodgment. ACAs complement other products and services we offer, such as our rulings program.

These arrangements are most suited to Australia's largest businesses. ACAs can apply to income tax, goods and services tax, excise, fringe benefits tax, petroleum resource rent tax, or any combination of these taxes.

To be considered for an ACA you must have in place an effectively designed and operating tax control framework which:

  • is aligned as appropriate with the best practices outlines in the Tax Risk Management and Governance Review Guide
  • is supported by a robust approach to tax risk management that can be evidenced at both the strategic and operational levels, and
  • a genuine commitment to continuous disclosure of all material risks.

See also:

Advance pricing arrangements

An advance pricing arrangement (APA) is an agreement with us on the future application of the arm's length principle to your dealings with international related parties.

APAs provide certainty by:

  • ensuring the fair application of the arm's length principle to related party international dealings
  • eliminating or reducing the risk of double taxation on related party international dealings (particularly in bilateral and multilateral APAs)
  • eliminating the risk of a transfer pricing audit on the related party international dealings covered by the APA.

APAs may be:

  • unilateral, which involves your business in Australia and us
  • bilateral or multilateral, which involves an agreement between two or more tax administrations and their respective taxpayers.

APAs generally cover a period of three to five years and may be reviewed if the trading circumstances materially change. APAs have an annual reporting requirement.

See also:

Mutual agreement procedures

International transactions can expose your group to double taxation. For example, a transfer pricing adjustment arising from an audit in one country may result in the same income being taxable in two jurisdictions.

If you believe you have been or will be subject to double taxation, you can apply for relief to the tax administration of your jurisdiction. If your application is accepted we will discuss your case with the other tax administration and try to resolve it in accordance with the relevant double tax agreement. This process is known as a mutual agreement procedure.

A mutual agreement procedure is part of the dispute resolution process and is in addition to your objection and appeal rights.

See also:

QC44828