The ATO has a clear focus on ensuring Australia's largest 500 privately owned groups are paying the right amount of tax, with ongoing one-to-one engagement supported by compliance reviews and audits where appropriate.
Through the Top 500 performance program, the ATO seeks to give the community confidence that Australia's largest 500 privately owned groups are paying the right amount of tax.
ATO Deputy Commissioner Louise Clarke said the investment by the ATO recognises the scale of these businesses. Annually the Top 500 pay over $4.4 billion in income tax and over $2.3 billion in net GST.
"Given the scale of these private operations can rival the size of large public companies, the community rightly expects the ATO to look closely at these groups," Deputy Commissioner Clarke said.
"The ATO's goal is to make sure the correct amount of tax paid, not a dollar more, or a dollar less."
The Top 500 program aims to increase willing participation, focusing on prevention rather than correction.
The ATO's engagement approach is tailored and matched to the complexity and willingness of each group.
The groups are encouraged and supported by the ATO to improve their tax governance, assuring good compliance into the future and once the group has achieved 'justified trust', the intensity of their engagement with the ATO reduces.
Only in the most extreme cases, where groups are not transparent or take high risk positions will the ATO use a more intensive approach.
In the first instance, groups are encouraged to work with the ATO on a one-to-one basis to demonstrate they are complying with their tax obligations and establish a position of 'justified trust' with us.
This work can include requesting information about a group's operations to establish an appropriate level of confidence. Any requests for information are tailored to the individual group's circumstances and activities.
In instances where the ATO suspects tax avoidance activities or non-compliance with tax laws, or where a group is not willing to engage with us on an assurance basis, this one-to-one engagement can escalate into compliance audits and reviews.
For High Wealth Individuals and their associated entities, in the 5 year period from July 2016 to June 2021, the ATO undertook more than 4,700 reviews and audits. This is an average of approximately 940 reviews and audits each year. These reviews and audits form part of the ATO's Top 500 and Next 5,000 tax performance programs.
Reviews are undertaken when further information is required and a wider understanding of single or multiple issues arising from a High Wealth Private Group's activity that may present a risk of non-compliance in relation to one or more aspects of the tax law.
Issues and concerns that are not resolved as part of the review process are escalated to an audit for deeper examination.
