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  • Significant global entities – penalties

    Increased penalties apply to all significant global entities (SGEs).

    Administrative statement penalties are doubled for an SGE that:

    • does not take reasonable care
    • takes a tax position that is not reasonably arguable
    • fails to provide documents when required and the Commissioner of Taxation determines the liability without the document.

    Penalties for SGEs that enter into tax avoidance and profit shifting schemes are also doubled if they do not have a reasonably arguable position.

    Failure to lodge on time (FTL) penalties for SGEs have also increased.

    From 5 December 2019 the increased penalties for SGEs mentioned above also apply to SGE subsidiary members of a consolidated group or a multiple entry consolidated group.

    On this page:

    Administrative statement penalties

    Administrative statement penalties have doubled on or after 1 July 2017 (twice the amount that applies to all other taxpayers) for an SGE that:

    • makes false or misleading statements
    • fails to have a reasonably arguable position
    • fails to provide a document when required.
    Penalty amounts

    Culpable behaviour

    Base penalty amount applicable from 1 July 2017

    Making a false or misleading statement

    50%, 100%, 150% of shortfall amount

    Making a statement which treats a law as applying in a way that was not reasonably arguable

    50% of shortfall amount

    Failing to provide a document as required

    150% of tax-related liability

    Increases for false or misleading statements that do not result in a shortfall amount

    Penalty units

    From 1 July 2020

    Intentional disregard

    120 penalty units ($26,640)


    80 penalty units ($17,760)

    No reasonable care

    40 penalty units ($8,880)

    See also:

    Scheme penalties

    From 1 July 2015, the maximum administrative penalty that can be applied to an SGE that enters into tax avoidance and profit shifting schemes are doubled. However, penalties are not doubled if an SGE has taken a reasonably arguable position.

    See also:

    • Combatting multinational tax avoidance – stronger penalties 

    Failure to lodge on time (FTL) penalty

    The base penalty amount is multiplied by five hundred where the entity is a SGE. FTL penalties for SGEs apply to an SGE that fails to lodge on time an approved form required to be given at a date that is on or after 1 July 2017.

    FTL penalty for an SGE from 1 July 2020

    Days late

    SGE penalties

    28 or less


    29 to 56


    57 to 84


    85 to 112


    More than 112


    See also:

    How an SGE can avoid increased penalties

    All taxpayers have an obligation to lodge their tax documents on time and without error.

    An SGE that takes reasonable care with their tax obligations will not incur a false or misleading statement penalty.

    It is important that an SGE reviews reporting requirements to ensure they can meet their obligations.

    If an SGE is unable to meet lodgment deadlines due to exceptional and unforeseen circumstances, they can request an extension.

    An SGE will have the opportunity to seek a remission of the penalty if imposed.

    Practice statements

    The following practice statements provide guidance on the ATO's administrative practice for the imposition and remission of penalties to which the increases for SGEs apply:

    • MT 2008/1 Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard
    • MT 2008/2 Shortfall penalties: administrative penalty for taking a position that is not reasonably arguable
    • PS LA 2011/19 Administration of penalties for failing to lodge documents on time
    • PS LA 2012/5 Administration of penalties for making false or misleading statements that result in shortfall amounts
    • PS LA 2012/4 Administration of penalties for making false or misleading statements that do not result in shortfall amounts
    • PS LA 2014/2 Administration of transfer pricing penalties for income years commencing on or after 29 June 2013
    • PS LA 2014/4 Administration of the penalty imposed under subsection 284-75(3) of Schedule 1 to the Taxation Administration Act 1953.

    More information

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    See also:

    Last modified: 17 Jul 2020QC 53380