ATO announces changes to Top 500 program

The ATO has announced that starting from this month, its Top 500 tax performance program will no longer include private groups with over $250 million turnover, regardless or net asset value.

It will also be increasing the turnover threshold from $100 million to $200 million for groups with net assets over $250 million.

The Tax Office said that groups that were previously included in the Top 500 program will undergo an exit process after any current issues under enquiry are finalised and it has achieved a requisite level of assurance.

"Groups will have the option to remain in the Top 500 program where they are in justified trust or close to achieving justified trust," the ATO said.

The ATO will also introduce new categories, categorising groups in the program as either significant or general.

"When full tax assurance is achieved by a group in the general category, they can benefit from a one-year monitoring and maintenance period and streamlined future engagements," the Tax Office said.

"We will notify groups of their categorisation after the finalisation of their current engagements."

The ATO also announced that it will widen its provisional justified trust approach, which was previously only available to predominantly passive investor groups.

"It will include all groups that achieve full tax assurance," it said.

The ATO said it will contact groups impacted by these changes and advise them of the next steps.

Assistant Commissioner for the Private Wealth Top 500 tax performance program, Glenn Cooper said the changes were aimed at ensuring that the focus of the program is on the wealthiest groups, with these groups having the biggest impact on the tax system.

Cooper said that groups classified as significant groups under the new categories will continue to undergo ongoing annual assurance engagements and need to achieve Justified Trust before entering a 3-year monitoring and maintenance period.

"It’s important to bear in mind that these groups have the highest impact on the tax system and make up about a third of the groups in the program," he said.

When groups classified as general groups achieve full tax assurance, Cooper said they will enter a one-year monitoring and maintenance period, followed by an assurance refresh engagement.

The ATO said it will still continue to assess the 4 principles of Justified Trust in its engagements and that effective tax governance will continue to be encouraged for all groups in the population.

"We know that some groups have proven they’ve paid the right amount of tax by achieving full tax assurance, even without the requisite tax governance for Justified Trust," said Cooper.

"The changes we’ve made to the Top 500 mean that we will continue to meet the program’s objective of ensuring that the wealthiest groups are paying the right amount of tax, and that significant groups will continue to pay the right amount of tax in the future, while also providing a streamlined engagement approach where appropriate.

"Make sure you’re on top of these changes and are clear about the implications for your group."