Potentially dodgy tax schemes are being promoted online and offered to people when they least expect it. These schemes can be promoted to you directly when you least expect it – not just from someone you've engaged for advice.
We're urging businesses of all sizes to be wary of offers of schemes promising to significantly reduce or avoid tax. Many scheme promoters claim they can help you reduce or avoid paying tax in return for the payment of fees. Once you've paid, the promoter disappears and you could face heavy penalties for getting involved in a dodgy tax scheme.
Our website lists many examples of the tax schemes we are concerned about. Recently, we've seen one tax scheme encouraging people to dodge their taxes by setting up a purported not-for-profit foundation and organising their finances to look like their income belongs to the foundation.
Another recent scheme is offering an investment opportunity into a start-up company. The start-up allegedly qualifies as an early-stage innovation company, and the advice claims investors will benefit from the associated tax offset. We're concerned that investors won't qualify for this.
Such schemes have the potential to entice honest people and businesses if they commit before doing their research first. Getting involved is risky.
Detecting and taking action on promoters of unlawful tax schemes is a priority for our Tax Avoidance Taskforce (TAT). A recent example of TAT action is the Federal Court handing down $13.6 million in penalties to research and development scheme promoters we investigated.
Protecting yourself and others
- familiarise yourself with the red flags of unlawful tax schemes
- getting early, independent advice from a registered tax practitioner on anything that seems too good to be true
- if you've unintentionally landed in a scheme, contact us immediately. Approaching us may make you eligible for a reduction in any penalties.
- if you're offered a suspicious tax scheme you should reject it and report it to us. Paying the right amount of tax is essential and those involved in unlawful tax schemes are taking money away from the community.
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