Australia

Details

  • Service: Tax, Dispute Resolution
  • Type: Regulatory update
  • Date: 21/02/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Alex Patrick

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Senior Tax Lawyer

+61 3 9838 4340

alexpatrick@kpmg.com.au

"An arrangement ending a dispute" – Are you sure? 

by Alex Patrick, Tax Law Specialist

Following our recent involvement in discussions to settle a long-term audit, we have identified the following four principles as being key to the successful outcome, and the end of the dispute for the taxpayer.

1.

Be prepared 

Understand the strengths and weaknesses of each party’s position and prioritise issues. These issues may be broader than purely short-term objectives.

 

2.

Identify key players

Who will attend the settlement discussions? It is critical that someone who has delegated authority to settle represents both parties in person. This person should participate in every subsequent communication where the written Settlement Deed is formalised so that any misunderstandings as to what was verbally agreed are identified well before the Deed is executed. 

 

3.

Consider an independent arbiter

Consider appointing an independent party (e.g. Accredited Mediator) to facilitate settlement discussions. Settlement discussions are usually led by the Assistant Commissioner assigned to the audit, who may (despite best intentions) feel obliged to support his audit team. While the Commissioner has recognised a need for independence as part of the new independent review function, it is not yet 'business as usual' for settlement discussions.

 

4. 

Undertake a detailed review of the Deed

Taxpayers should ensure that all relevant paragraphs of the ATO’s Model Deed of Settlement are included, and that both parties agree to any other alterations prior to execution.

 

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