Unfortunately, a small percentage of Australians deliberately abuse the tax and superannuation systems for their financial benefit. We are committed to preventing, detecting, disrupting and bringing the perpetrators of tax and financial crime to account.
Find out more
Financial crime explained
Financial crime is not victimless and has a serious economic impact on the community. It deprives the community of funding for essential services such as health, education and infrastructure.
Financial crime also has significant direct impacts on individuals and businesses. Examples can include:
- cyber criminals who steal people's life savings or identities
- companies which are deliberately liquidated, wound up or abandoned (referred to as illegal phoenix activity) before they can pay creditors such as the ATO, honest businesses or subcontractors
- organised criminals who orchestrate illicit tobacco growing operations, robbing our community of millions in revenue and taking business from legitimate retailers.
In most cases there is a toll on victims' emotional wellbeing, physical health and relationships as well.
Thankfully, only a small percentage of people deliberately abuse the tax and superannuation systems to reap illegal financial benefits. Such activities can include:
- tax evasion (blameworthy act or omission by the taxpayer)
- tax fraud (taxpayer making a false statement to the ATO about their tax or being recklessly careless about whether what they state is true or false)
- other offences like money laundering or identity theft.
Illegally obtained proceeds from financial crime are often used to facilitate organised crime, costing Australia up to $60 billion each yearExternal Link. Organised crime harms real people and our communities, which is why we are committed to disrupting and dismantling organised crime syndicates. Under the Commonwealth Organised Crime Strategic Framework, we have a shared responsibility to tackle the financial aspects of serious organised crime.
Like any crimes, financial crimes are diverse in nature, scale and the amount of harm they cause. They are often structured in ways that combine legal and illegal transactions and payments, trying to make it difficult to unravel the full extent of the illegal activities.
Whether financial crime threats originate in Australia or offshore they are usually enabled by facilitators and technology. For example, rapidly evolving technology and platforms help cyber criminals access information and sensitive data, making it easier for them to commit crimes against:
- the government.
Indications of financial crime
When people commit financial crimes they typically misrepresent or conceal the true nature of their transactions, assets or ownership of entities. Some of the indicators we look for include:
- use of nominees or straw directors
- unexplained wealth or wealth that is at odds with their reported income
- giving false or misleading statements to the ATO
- mischaracterising the true nature of transactions
- understating income
- inflating or claiming deductions to which they aren't entitled
- keeping two sets of books or financial statements
- failing to keep records or intentionally destroying financial records
- concealing money or the source of money
- making payments in cash
- using fictitious names or names of unauthorised third parties
- failing to lodge income tax returns or business activity statements (BAS)
- failing to pay tax debts when they are due
- withholding information from a tax professional or the ATO
- ignoring legal advice or guidance from the ATO.
Tax evasion or fraud
Tax evasion involves some blameworthy act or omission by the taxpayer.
Tax fraud is more serious and involves the taxpayer making a false statement to the ATO about their tax or being recklessly careless about whether what they state is true or false.
Examples of fraud or evasion include:
- recklessly claiming deductions that the taxpayer was not entitled to
- withholding information from the Commissioner or failing to keep records
- submitting false, backdated or altered documents
- paying wages in cash and not reporting the wages paid to the ATO
- not remitting GST, Pay As You Go Withholding (PAYGW) tax or Superannuation Guarantee charges to the ATO
- making false statements
- disguising expenses intended for personal benefit as business expenses.
Where there is enough evidence to suggest that a person has acted knowingly or recklessly to dishonestly get a payment or refund from the ATO, we consider making a referral for criminal investigation and prosecution.
How we tackle financial crime
We are a key participant in many taskforces and coordination groups. Our shared goal is to identify and dismantle financial crime in Australia. Some of our key partnerships include:
Internationally, we work through alliances such as the Joint Chiefs of Global Tax Enforcement (J5), to crack these criminal enterprises wide open.
Our partnerships allow us to share intelligence and information, bringing the most serious offenders of financial crime to account.
Our financial crime case studies reinforce that those who deliberately abuse the tax and superannuation systems for financial benefit will be caught.
A small percentage of people commit financial crimes by deliberately abusing the tax and superannuation systems to gain illegal financial benefits.