We work with taxpayers and their advisers across all markets, assisting and encouraging them to recognise, reject and report tax avoidance arrangements.
Reporting tax avoidance arrangements to us can prevent taxpayers becoming involved in inappropriate arrangements and ensure a level playing field by eliminating a competitive advantage that less scrupulous tax intermediaries may otherwise enjoy. Some people, including tax professionals, have provided us with information on arrangements they have seen. People may provide information to us by phoning 1800 177 006. We welcome this information.
Where we have concerns about particular arrangements, we will continue to warn the community - for example, by promptly issuing and following up on taxpayer alerts. We will continue to issue taxpayer alerts on a range of income tax, goods and services tax and superannuation issues as they arise. This keeps us on the front foot in protecting honest taxpayers.
We have published a guide for tax intermediaries, Good governance and promoter penalty laws and written to prominent entities in the law, accounting and financial product industries to help them understand the laws and highlight the need for improved governance. We have met with a number of these entities and will continue this program of engagement this year.
We strongly encourage entities involved in financial products being offered widely to seek product rulings from us. Rulings provide certainty about the tax consequences of participation in the arrangements. Where product issuers do not seek rulings, we will follow up. And where we have concerns about a product, we will take appropriate action, such as adjusting the claims of investors, issuing taxpayer alerts, seeking modification of the product by the entity and, in the most serious cases, applying the promoter penalty laws. We will also check the arrangements of some products with rulings to ensure they have been implemented in accordance with information provided to us in product ruling applications.
We will also ask advisory firms to encourage their clients to more fully engage with us through the private or class rulings system.
Where widely offered products, or boutique arrangements, offer tax benefits not available at law, we will encourage the issuers of these arrangements to modify or remove these features. Where these entities do not self-correct we will issue them with warnings highlighting the risks they run if they continue with their conduct. For the most serious cases involving the highest levels of risk and lowest levels of self-correction, we will consider applying sanctions available under the promoter penalty laws, including civil penalties and Federal Court injunctions.
In our ongoing assessment of key law and accounting advisory firms and financial institutions we have identified a number of firms and individual advisers with histories of advocating or supporting tax avoidance arrangements. We are now including this as one factor in our overall risk assessment of taxpayers.
We will commence reviews of higher risk advisory firms and financial institutions, and their clients, to determine whether they have participated in the same or other aggressive arrangements. We will also commence targeted reviews of individual advisers to ensure tax compliance in respect of their own affairs. Our assessments have shown that the higher risk advisers and promoters may also be higher risk taxpayers.
In addition, we will use our access and information-gathering powers to resolve enquiries faster and take more effective corrective action against scheme promoters and their clients.
Sections within Abuse of the taxation and superannuation systems
Last Modified: Friday, 1 July 2011