The ATO has revealed details of its proposed program to allow medium-risk companies with turnover of between AUD 100million and AUD 5billion to use their own auditors to assure facts in tax matters in cases where the law is clear.  If implemented, the program will free up considerable resources for the ATO.  We will continue to monitor the progress of the proposed program.

On 16 January 2014, the Australian Taxation Office released a discussion draft detailing a proposed program, the External Compliance Assurance Process (ECAP), which would allow large companies to use their own auditors for assurance of facts in tax matters. Key drivers for the proposed program include increased taxpayer participation and the freeing up of ATO resources.

At this stage, the ATO has proposed that the program be available to taxpayers rated medium-risk with turnover between AUD 100million and AUD 5billion, and that review by a company’s own auditor be limited to factual matters in cases where the law is clear and will not supplant the Commissioner’s determination and application of his view. In the case of an audit or other ATO inquiry concerning an issue of concern, companies would have the option of an ATO review or review by their own auditor.

 The ATO has indicated that it is currently in blueprinting stage and may consider a pilot of the program.