ATO targets tax schemes
The Tax Office is looking to target promoters of tax-effective schemes and include them in penalties if it thinks there is a definite case of tax avoidance.
Speaking at the IFSA conference, ATO commissioner Michael Carmody says the tax office is now going to focus on people promoting schemes to avoid tax.
"We will be having more reviewing strategies and pursue test cases to get them before the courts," he says.
The tax office will be looking at schemes which are aggressively promoted and if the tax-effective component is disallowed, Carmody wants to see the applicants appeal the decisions in court.
Apart from the investors having to pay back any tax saving, with penalties, the ATO would also like to see a penalty applied to the promoter of the scheme.
Figures of 25 per cent of the tax saving have been hinted at.
Carmody says the aim is to clear up tax avoidance through schemes which inevitably take in some agricultural investments that are heavily sold and promoted through financial planners. Other penalties would be applied to schemes which vary from the Product Rulings given by the ATO.
In the US and Canada, the authorities there are looking at applying penalties to tax avoidance scheme promoters, says Carmody.
"We are now discussing these issues with a range of parties," he says.
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