Compliance program 2011-12

Overseas interests and international dealings

Currently, over 32% of small-to-medium enterprises are involved in international activities. Increasing globalisation raises a number of compliance issues, ranging from transfer pricing to simple errors.

We match data received under tax treaties, through automated exchange-of-information requests, and from AUSTRAC. We use this information to target our awareness-raising campaigns and select higher risk cases for review.

International profit shifting remains an area of concern. We will continue to promote our program of transfer-pricing advanced pricing arrangements. These arrangements allow businesses to obtain certainty and reduce ongoing costs. We offer 'simplified' arrangements where we will assist businesses with turnovers up to $250 million with arm's-length benchmarking analysis. We will undertake 25 reviews and 10 audits where we identify a significant risk of profit-shifting, particularly for companies with a history of profit performance consistently below industry averages.

We will be contacting over 600 taxpayers across a range of support and compliance campaigns focusing on:

• foreign source income derived by Australian residents
• international shipping companies operating in Australian waters
• non-resident withholding tax, with respect to payments of interest, dividends and royalties - with a specific focus on franchising and governance controls
• thin capitalisation, with respect to non lodgment of thin capitalisation schedules and reviewing calculations of safe-harbour limits
• the use of preferential tax regimes to evade income tax obligations.

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