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Understanding ATO's Approach to Tax Law Enforcement

Updated: Sep 4, 2022

Like many countries, Australia follows a “self-assessment” system where taxpayers are expected to make filings and seek the help of tax professional where they are unsure of the tax treatment of any of their transactions.

To ensure compliance with the tax laws, the Australian Taxation Office (ATO) operates an tax law enforcement framework that is multi-layered including a range of reviews, audits, pre-assessment and pre-transaction clearance. The ATO encourages early engagement from taxpayers prior to undertaking significant transactions, and will make real-time enquiries of transactions identified from market intelligence or the media

All taxpayers may be subject to review. The probability or extent of review depends on the size and complexity of the taxpayer. Larger groups are subject to the most extensive reporting obligations and reviews. Audits initiated by the ATO of large corporate groups can extend several years.

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