The ATO’s Tax Avoidance Taskforce (“the taskforce”) ensures that multinational enterprises and large public and private businesses (and associated individuals) pay the right amount of tax in Australia.
Since being established in 2016, the taskforce has continued to investigate the most aggressive tax avoidance or evasion arrangements and has had successful prosecutions.
The ATO details key achievements of the taskforce throughout 2020-21 and the compliance programs which helped to achieve these results.
Tax Avoidance Taskforce compliance programs
Specific compliance programs led by the taskforce include:
- The Top 500 tax performance program to ensure that Australia’s Top 500 private groups are correctly meeting their income tax and GST obligations.
- The Top 1,000 combined assurance program to ensure that large public and multinational groups are reporting the right amount of income tax and GST.
- The Next 5,000 tax performance program which seeks to ensure that Australia’s largest privately owned and most wealthy groups (that are not already part of the Top 500 program) are paying the right amount of tax.
- The medium and emerging groups tax performance program which supports medium and emerging private groups to meet their tax obligations.
- The promoters and tax exploitation program which targets advisers promoting tax avoidance schemes.
The taskforce also takes action against taxpayers involved in tax avoidance or evasion using trusts, with a focus on privately owned and wealthy groups.
Key achievements in 2020–21
Key achievements of the Tax Avoidance Taskforce throughout 2020–21 include:
- Compliance activities generated over $3 billion in tax liabilities and $1.25 billion in audit yield from large public groups and multinational corporations, wealthy individuals and private groups.
- Engagement with over 468 of the Top 500 taxpayers and their associated entities, raising $308.1 million in liabilities and collecting $113.6 million in cash, and tax assured over $1 billion in tax paid.
- Engagement with over 930 of the Top 1,000 large public groups under the tax performance program (SAR) and generating $125.1 million voluntary disclosures and tax loss reductions of more than $264.3 million since the program began in July 2016. This program ceased in December 2020 and was replaced with the combined assurance program which was launched in September 2020.
- The Next 5000 program has engaged with 910 taxpayers and their associated entities, raising $223.6 million in liabilities and collecting $184.2 million in cash.
- The Medium and Emerging program has engaged with 1,978 taxpayers and their associated entities, raising $229.2 million in liabilities and collecting $142.43 million in cash.
- Continued targeting of taxpayers deliberately entering abusive trust arrangements, preventing the exploitation of tax loopholes by high wealth individuals and groups.
- Information obtained in audits resulted in de-registration of two tax agents for their role in structuring contrived trust arrangements for their clients to gain an unlawful tax advantage.
- An audit unravelling a large-scale complex tax avoidance scheme involving foreign workers for abattoirs designed to hide beneficial ownership using multi-tier companies and trusts reached the High Court.
- Achieving penalties of $22.68 million and $9.4 million for promoters of tax avoidance schemes in two Federal Court cases following investigations by the promoters and tax exploitation program
Key takeaways
The Tax Avoidance Taskforce ensures that multinational enterprises and large public and private businesses pay the right amount of tax in Australia. In 2020-21, the taskforce generated billions of dollars in tax liabilities across its various compliance programs, while continuing to target those abusing trusts to gain an unlawful tax benefit and imposing substantial penalties on promoters of tax avoidance schemes.
