When faced with an ATO Indirect Tax Review, CFOs and other tax professionals have several questions and concerns as to whether their organisation is prepared and compliant.
Over the next few weeks we’ll be answering the top questions we get asked regarding Indirect Tax Reviews.
These include, but are not limited to:
- Why were we selected for an Indirect Tax review?
-
- Is it random, industry-specific, or due to certain triggers?
2. What is the scope of the audit?
-
- Which years or periods are covered?
- Are specific transactions being targeted?
3. How long is the audit expected to last?
4. What types of documents and information will the ATO require?
-
- Do we need to provide electronic records, contracts, or correspondence?
5. What are the potential financial implications if discrepancies are found?
-
- Administrative Penalties and Interests.
6. How does the ATO determine penalties?
-
- Can we mitigate them?
7. What rights and obligations do we have during the audit process?
-
- Can we negotiate or challenge findings?
8. Who within our company should be the primary point of contact for the ATO during the Indirect Tax Review?
-
- Often, companies will have a dedicated tax professional or team handle communications.
9. How should we communicate with the ATO to ensure clarity and maintain a cooperative relationship?
10. Are there any industry-specific issues or common pitfalls that we should be aware of?
11. How does the ATO handle voluntary disclosures?
-
- If we find mistakes ourselves during the audit process, will coming forward proactively reduce penalties?
12. Have there been recent changes in the tax law or ATO’s approach that might impact the review?
13. How can we best prepare internally?
-
- Do we need external tax or legal advisors?
14. What are the likely outcomes at the conclusion of the audit?
-
- Clear, minor adjustments, major adjustments, or potential legal action.
15. How do we ensure that we are compliant moving forward?
-
- Implementing processes, technology, or training to avoid future audit issues.
16. Are there any red flags or issues we should proactively address with the ATO to simplify the review process?
17. What lessons have other companies in our industry learned from their Indirect Tax Reviews?
It’s important for companies to approach an Indirect Tax Review with a proactive, cooperative, and organised mindset. Preparing thoroughly and understanding the potential implications and areas of focus can help streamline the process and mitigate risks.
BTG can help.
BTG International has helped some of the worlds most respected companies prepare for and/or manage Indirect Tax Reviews. Call us on 1300 650 258, email contact@btgi.com.au or leave your details and we will be in touch.
To view more articles from our ATO Indirect Tax Reviews mini-series, click here