ATO administration of valuations under review

The Inspector-General of Taxation, Mr Ali Noroozi, is reviewing the ATO’s administration of valuation matters.

“Australia’s tax and superannuation laws are increasingly relying on concepts such as market value”, Mr Noroozi said. Valuations may be required for a variety of assets, transactions, businesses and liabilities for taxation purposes. For example, market valuations may be required in order to access the capital gains tax concessions for small businesses.

“Whilst there may be sound economic reasons for using such concepts, their use has resulted in a growing need for taxpayers to undertake significant valuation work”, Mr Noroozi said. The Inspector-General said the main source of taxpayer concern is the compliance burden associated with valuations. He said that, “critically, valuations are inherently subjective and can be a source of significant uncertainty leading to ATO disputes which can be frustrating, time-consuming and costly”.