Large Business Bulletin: April 2012

Tax exploitation schemes: know the risks, understand our approach

To help ensure a level playing field in the large business market, we continue to focus compliance activity on the promoters of tax exploitation schemes as well as businesses participating in these arrangements.

An example relating to the large business market is aggressive employee remuneration schemes, including abusive fringe benefit tax arrangements and non-complying employee shares schemes. These types of schemes are generally designed to avoid pay as you go withholding tax, superannuation guarantee and fringe benefits tax obligations. Other tax planning risks that we have identified in the large business market include international cross-border schemes, aggressive profit shifting, debt deduction generator schemes, foreign partnership arrangements and abusive thin capitalisation schemes.

Promoters of these arrangements carry significant financial and reputational risks under the promoter penalty laws which can be avoided through good governance practices as outlined in our guide.

Businesses participating in these arrangements are also exposed to financial and reputational risks with purported tax benefits potentially not available at law.

	For more information about good governance and the promoter penalty laws, refer to Good governance and promoter penalty laws.
	If you have concerns about a promoter or an investment arrangement, call us on 1800 177 006 or email reportataxscheme@ato.gov.au

Sections within In focus

• Tax exploitation schemes: know the risks, understand our approach
• Benefiting business - the R&D tax incentive
• Greater transparency through RTP schedules
• Talking openly with us
• Reforming our transfer pricing rules