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Reportable Tax Position deadline looms

Reportable Tax Position deadline looms

Time is running out to consider Reportable Tax Positions for 30 June year-end companies.

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Time is running out to consider Reportable Tax Positions (RTP) for 30 June year-end companies.

Companies that have received a notification by the Australian Taxation Office (ATO) are required, by 15 January 2019, to lodge a RTP schedule with their tax return for the year ended 30 June 2018. This is the first year in which the RTP schedule has been extended to include companies with a turnover of greater than $250 million.

Given the broad RTP categories, impacted companies need to carefully consider each of the categories and form a view as to whether a disclosure is required. Where it is considered unnecessary to disclose, it is important to record both the tax technical and evidential basis for that view, as there is the risk of penalties being applied or broader adverse impacts on the ATO’s risk assessment of the company.

Where a disclosure is made, the company should manage the risk of an ATO review. This will include being prepared to explain the position to the ATO and deal with a critical examination of the position by the ATO by reference to key documentation. It may also require one of the following tax risk mitigation strategies:

  • obtaining advice from a professional tax adviser or senior counsel
  • collating a contemporaneous evidence file to support the position, or
  • engaging with the ATO.

 

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