False invoicing

In a bid to safeguard the integrity of financial systems and combat illicit financial activities, the Serious Financial Crime Taskforce (SFCT) has intensified its efforts against false invoicing and other illegal financial arrangements. This proactive stance aims to curtail tax crimes and ensure a level playing field for businesses adhering to the law.


Understanding false invoicing

False invoicing involves the issuance of invoices without any corresponding provision of goods or services. This illicit practice often unfolds as follows:

  • A promoter issues invoices to legitimate businesses without delivering any actual goods or services.
  • The business, unaware of the falsity, settles the invoices via check or direct transfer.
  • The promoter refunds a major portion of the paid amount to the business owners in cash, retaining a small commission.
  • Subsequently, the business unlawfully claims deductions and GST input tax credits based on these false invoices.
  • The business owners use the received cash for personal expenditures or off-the-books payments, failing to disclose these transactions in their tax returns.


Taskforce vigilance

The SFCT issues a stern warning to businesses engaged in such malpractices, emphasising their commitment to combat financial crimes with an array of sophisticated tools and strategic alliances. Leveraging advanced data matching techniques, analytical capabilities, and intelligence-sharing networks, the taskforce remains adept at unveiling even the most intricate financial deceit.

While acknowledging the compliance of the majority, the SFCT underscores the imperative of eradicating tax evasion schemes that undermine the credibility of the tax and superannuation system. Such fraudulent activities not only compromise financial integrity but also disadvantage law-abiding businesses.


A call to action

Businesses involved in false invoicing schemes or other unlawful financial arrangements are urged by the SFCT to proactively disclose their transgressions. Voluntary disclosures may mitigate potential penalties.

For concerned citizens observing suspicious financial activities, anonymous reporting mechanisms are in place to relay tip-offs securely. Whether online or through a dedicated hotline, individuals can play a pivotal role in upholding financial probity and fostering a culture of compliance.


Key takeaways

The SFCT’s resolve in combatting false invoicing and related financial infractions underscores a commitment to upholding financial integrity and fostering a fair business environment. Those involved in false invoicing schemes may be able to mitigate potential penalties by self-reporting transgressions to the Serious Financial Crime Taskforce (SFCT).

Nyman Gibson Miralis provides expert advice and representation in cases of alleged financial crimes.

Contact us if you require assistance.