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06 Feb 12 ATO's risk differentiation framework (RDF)

The ATO has published a factsheet about its risk differentiation framework (RDF). The ATO uses the RDF approach to help assess the tax risk of large business taxpayers. It determines the intensity of the ATO response in what the ATO says is a coherent, consistent and considered way. It complements the compliance model which suggests an appropriate choice of remedy.

Using the framework, the ATO places the taxpayer into one of four broad risk categories (higher risk, key taxpayer, medium risk and lower risk) for each tax type (income tax, GST and excise).

For links to other documents, see Large Business and International Income Tax - Risk differentiation framework.

The ATO advises that from November 2011 to March 2012, the Commissioner is progressively writing to large businesses about their risk categorisations under the RDF for each of income tax, GST and excise.

The ATO is also meeting with the senior tax management of the very largest businesses to explain its views and listen to their perspective.

Where applicable, the ATO will provide the business with a degree of certainty regarding the likelihood of risk reviews and audits.


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