We will recognise reviews carried out by approved participating advisors and will appropriately limit our own compliance activities for a customer on the same compliance issues.
Participating advisor reviews check if their customers have good systems, processes and controls in place to meet their tax obligations.
Advisors who meet our requirements can apply for approval for 1 or all included review types.
For significant enterprises only
Right now, participating advisor reviews are only available to significant enterprise customers.
For this purpose, significant enterprise customers are any entity or group with annual turnover of at least $30 million or 50 employees.
Review types
Reviews can cover:
- tax governance, policy and processes
- data analytics relating to GST-specific risks
- general GST systems and processes
- data analytics relating to specific employee remuneration and benefits risks
- general remuneration systems and processes, including FBT.
Reviews do not cover:
- transfer pricing or income tax
- opinions or views on technical positions.
Advisor approval requirements
Before we give you approval, we must be satisfied that you complete reviews to the standards we expect and that these reviews will identify the appropriate tax risks for further action.
You need to meet all the following requirements for each review type you want to be approved for.
- You have a test client who also agrees to be tested by us.
- You show expertise and have internal governance policies for each review type, for example, restrictions on who can carry out or sign off a specialist review.
- You provide documented methods and approaches for each review type, for example, template checklists and questionnaires.
- You have completed at least 5 of the review type in the last 3 years.
- You can reasonably expect that you will complete at least 3 of the review type every year.
- You can share with us non-identifying high-level data about the reviews you complete each quarter. For example, industry, turnover, number of employees, most common risks identified.
Starting a review
We do not require customers to have participating advisor reviews. They are entirely the customer’s choice.
Customers may choose to have a review either:
- as part of their own tax governance policies
- because we have told them we are going to review them.
Sharing review reports
Reports from participating advisor reviews are not automatically shared with us.
When we contact a customer with tax risk questions, they can choose to share with us any previously completed participating advisor reviews relevant to our questions.
If we tell a customer we’re going to review them, they may ask for a participating advisor review to be completed instead. If we agree to this, everyone also needs to agree to an acceptable timeframe for the review.
If the customer chooses not to provide us with the review report, our normal compliance review processes will continue.
Voluntary disclosures
Normal shortfall penalty rules apply to voluntary disclosures that result from reviews. This includes whether the disclosure is made before or after an audit notification.
After your review
A review’s relevance will be assessed against any major changes for your customer after you completed it – for example, staff, data, systems, policies and processes. However, we generally expect that a review’s outcomes will be valid for 4 years.
When a relevant review report is shared with us, we will accept the review outcomes. We will not do separate testing of what your review covered.
If we already started a review and your shared report covers the same information, we will revise our original review scope and leave out work covered by your review.
We may still review:
- unresolved risks identified in the review report
- other issues that are outside the scope of your review.
Different views on technical issues
Participating advisor reviews do not cover technical positions, but you should include in the report any areas of technical uncertainty you identify. We may form a different view than yours on the correct treatment of a technical issue under review.
Applying for approval
If you meet the requirements, you can apply for participating advisor approval by email to Participatingadvisor@ird.govt.nz
When you apply, include information about each of the requirements and confirm you have arranged a customer for testing. We’ll contact you to talk through your application and the approval process.
Questions
If you have questions about participating advisor reviews, please email us.