Does the ATO think your client is risky? The Tax Institute Does the ATO think your client is risky? Adrian Abbott Senior Consultant – Tax Advisory Crowe Horwath Michael Cranston Deputy Commissioner Australian Taxation Office

Improving the tax and super experience Every year counts

Improving transparency Being upfront – online resource Previously Tax compliance for small-to-medium enterprises and wealthy individuals NOW Relevant and up-to-date information, including ‘Recent developments’ Guidance on the kinds of issues that draw the ATO’s attention Find out more at www.ato.gov.au/privategroups

Improving transparency Understanding the Risk Differentiation Framework Risk Tolerance Threshold

Improving transparency What attracts the ATO’s attention Tax or economic performance not comparable to similar businesses Lack of transparency in tax affairs Large, one-off or unusual transactions, including transfer or shifting of wealth History of aggressive tax planning Choosing not to comply or regularly taking controversial interpretations of the law Lifestyle not supported by after-tax income Treating private assets as business assets Poor governance and risk-management systems

Improving transparency What attracts the ATO’s attention – current issues Retirement planning arrangements involving SMSF’s Capital verses revenue distinction Research and development tax offsets Wealth extraction through private companies and trusts Pre- and post-CGT assets on transition or exit from a business International tax issues including residency, profit shifting and asset disposals by non-residents

Recent developments Corporate Tax Transparency Breakdown of the 321 companies subject to transparency reporting for 2013-14

Recent developments High wealth individuals Australian-resident individuals who, together with their associates, effectively control an estimated net wealth of $30 million or more Recent developments: Confirming high wealth individuals Find out more at www.ato.gov.au/how-we-identify-wealthy-individuals

Tailoring engagement Income Tax Assurance Notification

Tailoring engagement Income Tax Profile

Tailoring engagement Early engagement We’re having one on one conversations with our largest private groups and market leaders to establish ongoing working relationships. Our conversations are based on real time issues, tax performances and Income Tax Profiles. We’re also working towards providing whole-of-client experience service with visits focused on both income and indirect taxes.

Tailoring engagement Early engagement for advice For clients seeking early engagement for advice on complex transactions we have provided a ‘single entry point’ to ensure the right experts and decision makers provide the certainty needed. You can request a call back or advice request by visiting www.ato.gov.au and searching early engagement for advice.

Tailoring engagement Tax governance – online guide Practical benefits for business Importance of governance Key principles of effective tax governance Working with us – client engagement Key governance steps and processes Tailored guidance for business events and complexity Find out more at www.ato.gov.au/taxgovernance

Questions?

© June 2016 Crowe Horwath and Australian Taxation Office, Commonwealth of Australia Disclaimer: The material and opinions in this paper are those of the author and not those of The Tax Institute. The Tax Institute did not review the contents of this presentation and does not have any view as to its accuracy. The material and opinions in the paper should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests.