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Tax governance: Preparing for a Streamlined Assurance Review

Preparing for a Streamlined Assurance Review

Phillip Beswick, Claire Haley and Peter Mortimore discuss Streamlined Assurance Reviews – a business compliance program managed by the Australian Taxation Office – and how best to prepare for the tax governance questions as part of the reporting process.

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Streamlined Assurance Reviews (SAR) are one of the compliance ‘products’ the Australian Taxation Office (ATO) is running, focused on the Top 1000 program. As of October 2018 some 200 tax assurance reports have been issued; of the 1000 reviews to be completed by June 2020 – many groups, as a result, are yet to go through the process.

What are some of the lessons we have learnt from the experience to date in how best to prepare for the tax governance questions in particular?

What is the ATO is looking for?

Aligned to the guidance provided by the ATO in June 2018 on the considerations applied by them when providing stage ratings, in reviewing tax governance frameworks as part of a SAR, the following is taken into consideration:

  • Presence of a documented tax control framework to identify and manage tax risk.
  • Evidence that the design of the framework is effective (alignment with ATO Guide through undertaking a gap analysis).
  • Evidence to demonstrate that the framework is operational (that is it ‘lived’).

An important theme that runs through the Justified Trust framework as developed by the Organisation for Economic Cooperation & Development (OECD) and applied by the ATO is the expectation of evidence; of documents and other evidence of controls existing and operating.

 

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