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  • Trio penalised $9.4 million for tax exploitation scheme

    The ATO is dedicated to identifying and disrupting tax exploitation schemes. In March 2021, a solicitor, financial planner and accountant were penalised more than $9.4 million for promoting an illegal tax avoidance scheme, following an investigation that spanned several years.

    Our investigations found that Dr Bruce Rowntree, Mr Rinaldo Manietta and Mr Peter Donkin had exploited their positions as advisers to promote a scheme in which they marketed Emissions Reduction Purchase Agreements to clients to wrongfully claim a full deduction on credits that didn’t exist. We identified over 200 participants who attempted to claim in excess of $55 million in deductions through this mass marketed scheme.

    The scheme involved investors paying an initial sum for the investment, usually a 15% non-refundable deposit. In return, the promoters promised an immediate reduction to the client's taxable income and a consequential tax saving that far exceeded their initial deposit.

    Rowntree, who was central to the creation, operation and marketing of the scheme, has been ordered to pay $7.75 million. Manietta has been penalised $1.455 million for his role, while Donkin – who has appealed the decision – was ordered to pay $210,000.

    This case demonstrates the action we will take against enablers of tax schemes, whether they are lawyers, tax agents, financial advisers or other professionals. The $9.4 million penalty reflects the serious risk tax avoidance schemes pose to the integrity of the tax system, and the impact on investors who followed and trusted the advice.

    We want to help individuals and businesses avoid being unwittingly caught up in illegal schemes like this one. To avoid getting involved in a tax avoidance scheme:

    • Seek independent, written tax advice on deductions for your own circumstances. A trusted registered tax agent is a good first point of contact.
    • Remember that just because someone is qualified, it doesn’t guarantee that they’re doing the right thing.
    • Consider running a background check on anyone who is giving you financial advice – for example, by doing an Australian Financial Security Authority (bankruptcy) search.
    • Check with the ATO if you’re unsure about the advice you receive or the tax consequences of an investment opportunity. You can get general advice or request a private binding ruling.

    If you think you've been approached by a promoter of a scheme, or you're inadvertently involved in a tax avoidance scheme, contact us right away.

    For information on how to recognise a dodgy tax scheme, visit ato.gov.au/taxplanning

    Last modified: 08 Apr 2021QC 65259