Australian Tax Agents Face Tough Penalties Under New Laws
15 August 2005
Accountants and tax professionals promoting offshore tax avoidance schemes are facing heavy penalties under the Australian government's latest crackdown on abusive tax schemes.
Under draft laws unveiled for public comment last week, those who sell tax abusive tax schemes face fines of up to AS$550,000 or twice the amount gained by selling the scheme, whichever is the greater.
"The proposed promoter penalties regime is not designed to affect ordinary tax advisers," explained Mal Brough, Minister for Revenue and Assistant Treasurer.
Mr Brough added that:
"The intent is to catch tax exploitation schemes that promise taxpayers tax benefits that are not allowable under the existing tax laws. It is aimed at the promoters of schemes that exploit the tax system for personal gain, without facing the risks of tax shortfall penalties and interest charges to which they are exposing scheme participants."
"The promoter penalties framework will support the Governmentâs announced changes to self assessment that are aimed at improving taxpayer certainty as well as provide enhanced confidence, fairness and integrity to the tax system. The measures will deter the promotion of tax exploitation schemes without creating significant compliance burdens for legitimate investment arrangements."
The proposals come amid reports of an investigation by the Australian Crime Commission and Australian Taxation Office into a British-based tax scheme which has involved hundreds of tax agents and individuals.
The new crackdown follows hot on the heels of an announcement by Taxation Commissioner Michael Carmody that the Australian Tax Office is embarking on a major offensive against tax evasion at all levels of the economy in the coming year.
In particular, large corporations, medium-sized businesses, property-related tax issues, failing to lodge returns, and outstanding debt will come in for close attention from the ATO, according to Carmody.
