Compliance program 2011-12

Phoenix arrangements

Phoenix activity is the evasion of tax and or superannuation guarantee liabilities through the deliberate, systematic and sometimes cyclic liquidation of related corporate trading entities. We continue to focus on reducing fraudulent phoenix activity through a coordinated program of reviews, audits and prosecutions. We anticipate enactment of new legislation this year. This will increase our ability to address this behaviour by making directors more accountable for the pay as you go withholding tax and superannuation debts of their companies.

In the 2011-12 federal budget, the government provided $22.1 million in extra funding over the next four years to help us address phoenix behaviour. In addition, 2010 legislation now allows the demand of payments of a 'security bond'. To date, we have issued 10 'security bonds'.

We will implement a number of new strategies to ensure we detect potential phoenix activity sooner and treat it appropriately. We have an integrated program of raising awareness, compliance and debt collection to address this risk. This will be augmented by the proposed changes to the director penalty regime. We will establish an ATO-wide phoenix database to support the ongoing and timely scrutiny of phoenix operators in their interactions with us, involving registration, lodgment, reporting and payment.

We will work closely with other government agencies to improve the exchange of information in relation to phoenix activity.

Sections within Small-to-medium enterprises

• Private groups
• Highly wealthy individuals
• Wealthy Australians
• $100 million - $250 million segment
• Employer obligations
• Lodgment compliance
• Trusts
• Phoenix arrangements
• Overseas interests and international dealings
• Division 7A
• Capital gains tax
• Foreign residents
• Capital and revenue losses
• Restructuring by professional firms
• Fringe benefits tax
• Taxation of financial arrangements (TOFA)
• Small business and general business tax break
• Goods and services tax (GST)
• Refund integrity
• Property
• Retirement villages
• Integrity of business systems
• Financial supplies
• International and cross-border transactions
• GST serious evasion
• Excise
• Excise equivalent goods
• Tax reporting of exports including excisable goods
• Wine equalisation tax
• Alternative fuels
• Superannuation
• Managing business tax debt