Significant global entities – penalties
Increased penalties apply to all significant global entities (SGEs).
Administrative statement penalties have now 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 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.
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:
- make false or misleading statements
- fail to have a reasonably arguable position
- fail 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 2017
|
Intentional disregard
|
120 penalty units ($25,200)
|
Recklessness
|
80 penalty units ($16,800)
|
No reasonable care
|
40 penalty units ($8,400)
|
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:
Failure to lodge on time (FTL) penalty
The base penalty amount is multiplied by five hundred where the entity is a significant global entity. FTL penalties for significant global entities apply to an entity that fails to lodge a taxation document required to be given at a date that is on or after 1 July 2017.
FTL penalty for an SGE
Days late
|
SGE penalties
|
28 or less
|
$105,000
|
29 to 56
|
$210,000
|
57 to 84
|
$315,000
|
85 to 112
|
$420,000
|
More than 112
|
$525,000
|
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.
More information
Practice statements about imposing and remitting penalties
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:
- Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard – MT 2008/1
- Shortfall penalties: administrative penalty for taking a position that is not reasonably arguable – MT 2008/2
- Administration of penalties for failing to lodge documents on time – PS LA 2011/19
- Administration of penalties for making false or misleading statements that result in shortfall amounts – PS LA 2012/5
- Administration of penalties for making false or misleading statements that do not result in shortfall amounts – PS LA 2012/4.
- Administration of transfer pricing penalties for income years commencing on or after 29 June 2013 – PS LA 2014/2
- Administration of the penalty imposed under subsection 284 75(3) of Schedule 1 to the Taxation Administration Act 1953 PS LA 2014/4
Other information
Contact us
If you have any questions, email us at: SGE@ato.gov.au
This page provides information to help you understand increased penalties, which apply to all significant global entities.