The Australian Taxation Office has put large businesses on notice that it is focusing on them this financial year to ensure they pay their fair share of tax.
The ATO released a statement in December stating that it “will work with large businesses to focus on:
- tax governance – minimising compliance risks through good governance
- transparency – working together to get things right and provide community confidence that large business is paying their fair share of tax
- early and cooperative engagement – prevention before correction; promoting early engagement on issues so we can provide certainty on tax treatment, and
- increased guidance – helping business to ‘get it right’.”
The ATO defines a ‘large business’ as one with an income in excess of $10 million per annum.
It will concentrate on the following areas to ensure large businesses comply:
- Integrity of business systems for GST.
- GST compliance on property transactions.
- Financial supplies apportionment for GST.
- Compliance with new measures effective from 1 July 2017 for GST on imported low-value goods and digital products and services.
- GST on cross-border transactions.
- Compliance with excise, wine equalisation tax and luxury car tax obligations.
- Internationals and profit shifting, particularly the application of thin capitalisation rules, offshore hub arrangements and cross border related party financing arrangements.
- Trust schemes and arrangements that seek to minimise tax.
- Restructure events.
- Complex structures used by wealthy individuals and their private groups.
- Research and development claims.
- Correct application of the consolidation regime.
- Exploration expenditure deductions.
- Bank branch attribution.
- Privatisations and public infrastructure transactions.
Of particular concern to Dealers are the Luxury Car Tax obligations, but Dealers should also be aware of GST, trust, tax minimisation, financial and property issues.
AADA recommends Dealers sit down with their accountants and make sure they have all their i’s dotted and t’s crossed.