Australian Taxation Office (ATO) real-time engagement with private wealth clients who are undertaking significant commercial transactions is important in these uncertain times. In the last financial year, the ATO provided assurance around the tax implications of $8.4 billion in transactions and is now well placed to assist with providing tax certainty to private groups who are positioning themselves for the future.
"The market is telling us that our Commercial Deals engagements delivers a meaningful service and in the current environment that means providing tax certainty over the large deals that might be necessary to future proof a business or a family group structure," Deputy Commissioner Timothy Dyce said.
The ATO considers a commercial deal to be any significant business transaction over $10 million that may affect the structure of a business, including the sale of a business or major assets, mergers and acquisitions, restructures, initial public offerings, or the sale of commercial property.
"Some private groups may have significant business transactions planned and others may find themselves in that situation through unforeseen circumstances. Our Commercial Deals team can provide tax certainty in real time by engaging directly with tax advisors to give assurance about whether their tax calculations are correct," Mr Dyce said.
"Nine out of ten private client advisors chose to engage with us when our Commercial Deals team approached them, and 90% agreed with our explanation of the tax treatment for their significant business transactions. This means we avoid lengthy disputes and get certainty around expected tax revenue."
"Additionally, we are seeing an increase in the number of advisors approaching us to provide their clients with certainty. It is really good to see that advisors are understanding the benefits of our focus on prevention over correction," Mr Dyce said.
"We invite tax advisers to approach us to obtain tax assurance on the significant commercials deals their clients are undertaking prior to lodgement, whether it be pre-transaction, or post transaction. All we require is clarity around the facts and a position we can work with on how the tax law applies."
