TheAustralian Tax Office(ATO) will begin an examination of how financial products and services are used in the area of tax planning by companies and individuals looking to reduce their tax position.
The ATO’s move will be part of a wider taskforce looking into the issue in four countries after the Australian Tax Commissioner, Michael Carmody signed a Memorandum of Understanding with his counterparts from Canada, the UK and the USA late last month.
The taskforce has agreed to collaborate and coordinate information about aggressive tax planning and will also place the identification of aggressive tax planning promoters and product developers as a early priority alongside the products and services currently available.
In announcing the formation of the taskforce the ATO says each relevant tax body will still work within its own jurisdiction but will tackle those arrangements which act or are promoted across borders and tax regimes as well as promoters which operate globally.
Carmody says the joint approach will enable the ATO to be better equipped to identify and deal with complex aggressive tax planning schemes, particularly those pitched at large business and high-net-worth individual taxpayers.
As part of its commitment to the taskforce the ATO will appoint a number of senior staffers to the group to be based in the USA.
The ATO will also have senior staff on the executive oversight group of the taskforce which will direct and evaluate its work with the Commissioners to receive a review of the taskforce’s work at the end of 12 months.
The timing of the announcement comes as the end of year tax planning season begins with the ATO expecting to issue an increased number of audit assessment before the end of the financial year, pushing the levels of taxes and penalties under the audit system to more than $3 billion for the year.
