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  • Tax Avoidance Taskforce

    The ATO Tax Avoidance Taskforce scrutinises the tax affairs of multinational enterprises, large public and private groups and wealthy individuals operating in Australia. Its role is to ensure these entities pay the right amount of tax, according to law. Achieving this will increase the trust and confidence of the Australian community and other stakeholders in the ATO's effectiveness and the integrity of the tax system.

    Established in 2016, the taskforce enhances and extends our existing compliance activities. We already tackle tax avoidance – this taskforce bolsters these efforts.

    The taskforce investigates and challenges the most aggressive tax avoidance arrangements, including profit shifting. We are working with our partner agencies and other jurisdictions to ensure the fairness of our tax system for all Australians.

    The Australian Government has funded the taskforce with $679 million over four years.

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    First year of the Taskforce

    The government's strengthened compliance framework and funding provided additional resources for greater scrutiny to investigate and challenge tax avoidance strategies.

    Our engagement and assurance work is already having an impact. Voluntary disclosures to correct tax positions were received from a number of taxpayers during 2016-17. This work will continue, by June 2020 we will review the top 1000 public groups and top 320 private groups to ensure they are paying the right amount of tax in Australia. This is the first time we are providing the community with this level of assurance.

    Since the introduction of the Multinational Anti-Avoidance Law (MAAL), around $6.5 billion in sales has returned to the Australian tax base because taxpayers have restructured their arrangements in response to the MAAL.

    The Diverted Profits Tax (DPT) applies from 1 July 2017. It is a major deterrent to profit shifting by Significant Global Entities (SGEs) and is designed to ensure profits made in Australia remain in Australia. Around 1,600 SGEs are in scope of the DPT. We will soon publish a Law Companion Guide for the DPT and Practical Compliance Guide to assist taxpayers.

    Wealthy individuals and related private groups continue to be a focus under the Taskforce. Our program of work applies differentiated client approaches ranging from one-to-many education programs, 1:1 ongoing engagement, to risk and audit programs and, where appropriate, prosecution.

    We have recruited people with the knowledge and expertise to make a difference. This is supplemented by the appointment of senior tax specialists to guide, mentor, train and advise our compliance officers.

    Taskforce objectives

    Through the Taskforce we will continue to:

    • detect tax avoidance to protect revenue and maintain the integrity of the tax system
    • increase transparency and develop a better understanding of commercial drivers and the industries in which taxpayers operate
    • improve our data, analytics, risk, and intelligence capabilities to identify and manage tax avoidance risk
    • provide the community with confidence that large public and private groups, and wealthy individuals are paying the right amount of tax, according to law, in Australia.

    New laws

    The taskforce is supported by new legislative measures to ensure the right amount of tax is paid in Australia. The legislation is either in place or being developed:

    • Multinational anti-avoidance law (MAAL) – came into effect on 1 January 2016 to ensure multinationals pay the right amount of tax on the profits earned in Australia.
    • Diverted profits tax (DPT) – came into effect on 1 July 2017 to ensure significant global entities pay tax that reflects the economic substance of their activities in Australia.
    • Implementation of the OECD hybrid mismatch rules – announced in the May 2016 Budget to neutralise the effects of mismatched arrangements under the laws of two or more tax jurisdictions. This specifically relates to Action Item 2 of the G20/OECD base erosion and profit shifting (BEPS) Action Plan.

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    Engagement and assurance

    We have a justified trust strategy to review the top 1,000 multinational and public companies, and top 320 private groups. This is a tailored compliance approach to ensure they pay the right amount of tax.

    Justified trust reinforces our commitment to consulting and developing mutual expectations – making it easier for those who do the right thing, and harder for those who do not.

    We engage with taxpayers affected by any changes from the earliest possible point.

    We are committed to transparency about how we assess risk and administer the system. Along with the transparency and accountability obligations required by Australian law, we implement the OECD's BEPS transparency initiatives.

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    Compliance programs

    Our tax performance programs match specialist tax performance teams with taxpayers. It is the focus of the compliance programs to identify and deal with non-compliance.

    The Tax Avoidance Taskforce coordinates:

    • the international risk program, which focuses on international profit shifting and corporate restructuring
    • programs for private groups and wealthy individuals, including trusts and promoters
    • trusts which target higher risk trust arrangements in privately owned and wealthy groups (not ordinary trust arrangements or tax planning associated with genuine business or family dealings).

    We encourage taxpayers who have entered into tax avoidance arrangements to voluntarily disclose. At the same time, advisers who assist or promote tax avoidance behaviours and arrangements will have a higher level of scrutiny applied to their clients.

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    Last modified: 20 Oct 2017QC 52477