“We are currently reviewing these arrangements and engaging with taxpayers who have entered into, or are considering entering into, these arrangements,” said the alert from tax commissioner Chris Jordan.
The Australian Taxation Office is investigating foreign investors who “mischaracterise” finance and equity injections into local businesses to avoid tax that could be referred to the Foreign Investment Review Board.
As part of its scrutiny of cross-border tax evasion, the ATO said it was reviewing schemes that involve foreign companies or individuals lending to Australian businesses that are unable to secure traditional finance and that produce financing arrangements that could result in both sides avoiding Australian tax.
Australian Taxation Office commissioner Chris Jordan. Dominic Lorrimer
In a taxpayer alert sent to market participants including tax practitioners who may be promoting such schemes, the ATO said it would consider pursuing companies for tax avoidance if they were intentionally reducing taxable income, diverting profits or engaging in transfer pricing.
ATO cracks down on foreign investment
