As of 1 July 2024, the Australian Taxation Office (ATO) has introduced new arrangements to bolster legal protections for individuals disclosing tax avoidance behaviour. These new measures extend protection to Tax Practitioner Board (TPB) whistleblowers and provide a comprehensive framework to ensure the safety and confidentiality of whistleblowers.
Qualifying for protection
To qualify for protection as a tax whistleblower, the following conditions must be met:
- Relationship with the entity: You must be, or have been, in a specific relationship with the entity you are reporting, such as an employee, former employee, dependant, or spouse.
- Reporting: The disclosure must be made to the ATO or an eligible recipient who can take appropriate action, such as an internal auditor appointed by the entity.
- Purpose of disclosure: You must reasonably believe that the information will assist in performing duties under taxation law.
Even if you don’t meet these conditions, you can still provide a tip-off, and the ATO will strive to maintain your confidentiality.
Information you can disclose
Protected disclosures include:
- Information that assists the ATO in performing its duties under taxation law.
- Information provided to an eligible recipient on reasonable grounds, indicating misconduct or an improper state of affairs related to the entity’s tax affairs.
Eligible recipients are typically internal to the entity or have a relevant relationship with it, such as registered tax or BAS agents.
Protection measures
Identity protection
It is illegal to disclose the identity of a tax whistleblower without consent.
If necessary, identity can be disclosed to authorised bodies, such as the ATO or an auditor, under strict confidentiality requirements.
Whistleblower identities are protected in court proceedings unless the court deems disclosure necessary for justice.
Legal practitioner disclosures
Disclosures made to legal practitioners for legal advice or representation related to tax whistleblower law are protected, even if you don’t qualify as an eligible tax whistleblower.
Civil, criminal, and administrative liability protection
Whistleblowers are protected from:
- Civil, criminal, and administrative liabilities related to their disclosures.
- Employer retaliation, such as termination or breach of contract.
- Use of self-incriminating information in criminal or penalty proceedings, though the ATO may issue tax assessments or administrative penalties based on the disclosed information.
Detrimental conduct protection
It is illegal to cause detriment to a whistleblower, which includes:
- Dismissal, harassment, intimidation, or psychological harm by the employer.
- Damage to property, business, or financial position.
Remedies and compensation
If a court finds that a whistleblower suffered detriment, it may order compensation, which could include:
- Payment of damages
- Reinstatement of employment
- Injunctions to stop detrimental conduct
- Formal apologies
How to make a disclosure
Whistleblowers can make a disclosure using the ATO’s tip-off form, available on the ATO website and app, or by phone, mail, or through tax practitioners. Confidentiality is a priority, and whistleblowers can choose to remain anonymous.
Corporate whistleblower policies
Public companies, large proprietary companies, and proprietary companies that are trustees of registrable superannuation entities have been required to have a corporate whistleblower policy in place since 1 January 2020. The Australian Securities & Investments Commission (ASIC) provides guidance on incorporating tax whistleblower policies within broader corporate policies.
Key takeaways
The ATO’s new arrangements, effective from 1 July 2024, significantly enhance legal protections for tax whistleblowers, including those affiliated with the Tax Practitioner Board. These comprehensive measures ensure confidentiality, protect against retaliation, and provide avenues for compensation, thereby encouraging the reporting of tax avoidance and misconduct. The strengthened framework underscores the ATO’s commitment to maintaining integrity in the tax system while safeguarding those who come forward with critical information.
