ATO’s Medium and Emerging Private Groups Tax Performance Program – Are You Prepared?
The Australian Taxation Office (ATO) has intensified its focus on medium and emerging private groups through its Medium and Emerging Private Groups (MEPG) Tax Performance Program.
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This initiative targets businesses and private groups with turnovers between $10 million and $500 million or those with significant net wealth. Understanding how this program affects you is crucial for ensuring compliance and optimizing your tax position.
Who Is Included?
The program primarily includes:
- Medium and Emerging Private Groups: Those with turnovers between $10 million and $500 million.
- High Net Wealth Individuals: Private groups linked to Australian resident individuals who, together with their associates, control wealth between $5million and $50 million.
Key Focus Areas
The ATO’s program is concentrated on several critical areas, including:
- Larger and Higher Risk Groups: Entities with complex structures or significant economic activities.
- Private Groups in Transition: Businesses experiencing rapid growth, planning offshore expansion, or where controlling individuals are transitioning to retirement.
- Foreign Investment and Wealth Extraction: Especially where there’s a focus on acquiring high-value assets in Australia and structured wealth extraction.
- Income vs. Expenses: Instances where income does not appear sufficient to cover expenses or asset acquisitions.
- Unusual Transactions: Large, one-off, or unusual transactions, including the transfer or shifting of wealth.
- Trust Structures: Particularly the use of trusts in tax planning.
- Wealth Extraction: Areas such as Division 7A, focusing on verifying complying loan agreements and genuine repayments.
Importance of Good Tax Governance
The ATO is placing increased emphasis on the importance of strong tax governance, internal controls, and documented business processes and procedures. Ensuring that these areas are robust can help mitigate risks and demonstrate your commitment to compliance.
What This Means for You
This is the perfect time to review your current tax position and governance practices. Our team is here to help you:
- Assess Risks: Identify areas of potential risk under the ATO’s scrutiny.
- Enhance Compliance: Strengthen your tax governance and ensure your processes are documented and up to date.
- Plan Strategically: Explore options to optimize your tax position and plan for the future.
Don’t wait for the ATO to come to you—proactive engagement is key. Reach out to us today to discuss how we can support you in navigating these challenges and securing the best outcomes for your business.