The ATO-led Serious Financial Crime Taskforce (SFCT) has issued a new intelligence bulletin warning businesses against using illegal financial structuring arrangements or schemes to commit GST fraud.
Drawing on intelligence and information from partner agencies, the SFCT has observed businesses across several industries, particularly property and construction, using arrangements to alter or disguise transactions. This is an attempt to generate high value GST refunds they’re not entitled to.
Features of these illegal arrangements or schemes include:
- false invoicing between related entities (for example, inflated invoices or issuing invoices where no goods or services are actually provided)
- deliberately misaligning GST accounting methods across the group (for example, one entity operating on a non-cash (accrual) basis while another uses a cash basis to create a GST refund due to the mismatched timing of the methods)
- duplicating GST credit claims in related entities for a single high value transaction
- claiming GST credits for purchases, development, and construction (by related entities) which never occurred
- the use of straw directors to hide the true relationship between entities.
Deputy Commissioner and SFCT Chief John Ford said, ‘Those who seek to defraud the tax and super systems will be caught and face the full force of the law.’
‘Not only is this behaviour putting honest businesses at risk, but it also takes funding away from vital community services such as healthcare, infrastructure and education.’
If you suspect a business is involved in a false invoicing arrangement or GST refund fraud, you can confidentially report it to us by making a tip-off online or by calling 1800 060 062.
If you’re a business involved in a GST refund fraud arrangement or other illegal invoicing or financial arrangement, we strongly encourage you to make a voluntary disclosure. Don’t wait for us to contact you as early cooperation and voluntary disclosure of behaviour may reduce the penalties imposed.
Read more about the SFCTS’s warning at ATO cracking down on GST fraud.
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