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‘Can’t hide’: Mid-tier sounds warning on wealthy group scrutiny

The Tax Office will begin scrutinising the affairs of 1,200 top privately owned and wealthy groups after its program targeting the top 320, with one mid-tier warning of some “tough love” ahead.

Tax&Compliance Jotham Lian 14 December 2018
— 1 minute read

Speaking to Accountants Daily, BDO partner Carlo Moretti said discussions with the ATO have revealed that the agency will move to review the next 1,200 Privately Owned and Wealthy Groups (POWGs) after its successful Top 320 program.


Launched in 2017, the Top 320 program is an engagement and assurance approach under the Tax Avoidance Taskforce that involves intensive one-to-one engagement with a focus on prevention rather than correction of tax disputes for these groups.

According to the ATO, several behaviours and characteristics, including aggressive tax planning, poor governance and risk management systems, and large, one-off or unusual transactions, will attract its attention.

“What has come out of the Top 320 is a number of learnings for the Tax Office and taxpayers, including that many are not ready for the sort of intense scrutiny that they are about to undergo,” said Mr Moretti.

“There will be questions like can you please provide us with a copy of your corporate governance policy, which within that they would expect to see a tax risk management policy.

“They found that the large, private-end of town has come up short – not all but some, and they are a little bit concerned that will continue. The problem will probably be exasperated at the next tier,” he added.

“Tough love is ahead with intensive time consuming comprehensive risk reviews and audits; higher penalties and on-going engagement with the Tax Office for years.”

Mr Moretti believes it is time for taxpayers and their advisers to begin embracing early engagement with the ATO and accept the transparency of their tax affairs in today’s economic environment.

“The message for taxpayers and their advisers to probably start thinking about this and do their homework – they need to embrace early engagement with the Tax Office,” said Mr Moretti.

“That is the prevention rather than correction approach because correction causes millions of dollars in legal fees, as well as time and resources.

“They need to understand we live in a very different world – we live in a world of transparency, we live in a world of common reporting systems, we’re seeing banks and financial institutions actively passing on information about taxpayers, sending out CRS forms saying you’ve got banks accounts here in Hong Kong or Singapore or wherever it may be,” he added.

“The visibility that the commissioner is getting is unprecedented; it is a very sophisticated regime and will continue to be so. They can’t hide and they need to embrace the Tax Office and work with them.”

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‘Can’t hide’: Mid-tier sounds warning on wealthy group scrutiny
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it.