THE Australian Taxation Office recently issued a reminder to taxpayers about its new tax compliance strategy.
Having pursued the promoters and participants in mass marketed schemes, the ATO has now turned its attention to individually tailored arrangements.
The ATO has set a task for its serious non-compliance area to examine 'the proliferation of these tailored schemes'.
Types of arrangements targeted
Both GST and income tax arrangements are in the ATO's sights. The types of activities that the ATO is concerned about include the following:
• Living away from home allowance for foreign nationals;
• Capital streaming arrangements in trusts;
• Assignment of Australian copyright on articles prepared by non-residents;
• Copyright transfer agreements between related parties; and
• New Zealand discretionary trusts providing services to Australians.
The ATO is especially concerned with GST arrangements such as:
• Non-arm's length transactions between parties operating on different accounting methods (cash and accruals);
• Property developments and other building industry arrangements employing the GST grouping provisions, the margin scheme, or the going concern exemption; and
• Use of the second hand goods provisions to obtain input tax credits.
Who should act
Those individuals and businesses involved in the arrangements listed above should consider reappraising their situation.
They should look for commercial and legal justifications for continuing with these arrangements.
The ATO has indicated that it will undertake a "number of activities" in relation to such arrangements.
Those considering entering into these and other similar arrangements would do well to conduct due diligence before agreeing to any of the arrangements.
Zoran Vukojevic, solicitor
9288 6939
Peter Beekink, partner
9288 6751
Phillips Fox
