We work with taxpayers to resolve disputes as early as possible. As part of good administration, we regard settlement as an important mechanism for resolving disputes.
The Independent Assurance of Settlements (IAS) program, implemented in 2016, reviews and advises on our largest and most significant settlements. This is to provide the Australian community with confidence that our settlements and settlement processes are fair and reasonable. To date, 84 settlements have been reviewed through the program.
Settlements selected for review
The program involves 5 former Federal Court judges who provide a view on whether the settlements are fair and reasonable. Settlements selected for review include those involving:
- multi-national enterprises
- those arising from Corporate Tax Avoidance Taskforce
- operations income tax or indirect tax (GST, excise).
The criteria for a settlement to be automatically selected for review are where the:
- pre-settlement position is greater than $50 million
- settlement amount is greater than $20 million
- variance is greater than $20 million.
Any other case considered significant (for example, potential reputational significance or media interest) will be approved for review by a Deputy Commissioner.
During the 2021–22 year, the assurers reviewed 15 settlements and found that all provided a fair and reasonable outcome for the Australian community.
Australian National Audit Office report findings
In the 2017 report, The Australian Taxation Office's Use of SettlementsExternal Link by the Australian National Audit Office (ANAO), the IAS program was found to be contributing to the ATO’s improvement of its enterprise approach to settlements, with the ATO having the highest level of reporting around settlements compared to other national revenue authorities internationally.
The findings of the ANAO report also indicate that the ATO’s use of settlements is effective and positive. It found the IAS program gave valuable assurance that settlements entered into with large businesses and multinational enterprises resulted in fair and reasonable outcomes for the Australian community.
The ANAO also noted in their review that the ATO had the highest level of transparency and public reporting around settlements compared to other national revenue authorities.