Latest business COVID cash grants tax exempt
ATO sets out recommended approach to legal privilege claims
Revelations of rampant cheating at KPMG echo the broader decay in culture at the top of business in Australia; at the Big Four firms which advise both our largest corporations and government, indeed the firms to which government itself is being outsourced. Michael West speaks with Jeffrey Knapp.
If the big news of the week is Australia passing even more of its sovereignty to the United States via AUKUS, the other news is that our regulatory sovereignty was also transferred when regulators from the United States took aim at KPMG Australia and blew it out of the water for cheating.
Uppercut: KPMG cheating scandal mirrors Big Four rot, business leadership
Billionaire property developer Phillip Dong Fang Lee, and his wife Xiaobei Shi have had their vast network of Australian assets frozen as the tax office pursues them for more than $272
The Federal Court orders apply to 16 properties linked to the couple and their corporate interests, including their $40 million Point Piper mansion, Mandalay, as well as a Star City Casino account and their fleet of luxury cars including a Bentley, a Rolls Royce Ghost and a Porsche Cayenne.
Retirees Sherryl and Len Yearsley said their Fame Cove Community Action Group had blocked several grandiose development applications, including a $200 million resort and golf course.
Freeze orders on billionaire’s Point Piper mansion as tax office pursues $272 million
Australians want to name 10,000 biggest companies that got JobKeeper
The federal government should reveal the full list of big companies that gained help from the $88 billion JobKeeper wage subsidy, according to a clear majority of Australians who want to know the amounts paid out of taxpayer funds.
An exclusive survey shows that 68 per cent of voters support calls on the Australian Taxation Office to reveal the top 10,000 companies and the amounts they received after a political storm over “wasted” payments to people who did not need help.
Tax and financial criminals may weave a complex web for law enforcement to untangle, but sometimes their downfall comes after being "dobbed in"
What role do ‘tip-offs’ play in ATO tax investigations?
ATO REPORTING CERTAIN TAX DEBT TO CREDIT REPORTING BUREAUS
BUSINESSES GIVEN 28 DAYS TO MAKE AN EFFORT TO MANAGE TAX DEBT
Two weeks ago, the Accountants Daily reported that businesses with over $100,000 in tax debts have begun receiving letters from the Australian Taxation Office (ATO) warning them of the ATO's intention to disclose tax debt information to credit reporting bureaus. Those letters assert those businesses' owners/directors have 28 days from receiving the letter to engage with the ATO to manage tax debt.
Further, businesses actively engaging with the ATO to manage their tax debt will not be reported to credit reporting bureaus.
Businesses that meet the criteria are reportedly receiving orange-coloured warning letters, which is the first instance of these letters being in circulation since the law enabling the ATO to report on certain tax debt took effect on 21 February 2021.
This latest news follows: the ATO's approach to debt collection and small business insolvency will seismically shift where we warn that despite volatile lockdown circumstances "A wait-and-see approach" won't pay off.
In what circumstances can the ATO report unpaid debts to a credit reporting bureau?
Further to our article in November 2019 the criteria is:
- The business has an ABN and is not defined as an 'excluded entity' (a deductible gift recipient, registered charity, a government entity, and a complying superannuation entity).
- The business's tax debts are $100,000 minimum and overdue by 90 days plus.
- The business is not considered to be 'effectively' engaging with the ATO to manage its tax debt.
- The Inspector-General of Taxation is not considering a complaint made by the business about "the proposed reporting of the entity's tax debt information."
However, the mechanism for reporting is not automatic. The ATO must notify the business in writing and give them 28 days to engage with the ATO to manage its tax debt.
The ATO will only provide tax debt information to registered credit reporting bureaus that have an agreement with the ATO detailing the reporting terms and are also compliant from tax perspective.
What type of tax debt is factored into the >$100k disclosure threshold?
Business tax debt captured into the tax debt disclosure threshold includes:
- income tax debts
- activity statement debts
- superannuation debts
- fringe benefit debt
- penalties and interest charges.
What's the impact?
As defaults are recorded on a taxpayer's commercial credit file, it will have immediate and lasting consequences for a defaulting taxpayer. A credit default is a black mark that lasts for five years and creates an environment where support from financiers may be restricted.
What should advisors do?
We believe it is important for advisors to be aware of this new approach from the ATO. It may be useful to check relevant clients' outstanding tax position and make them aware of the action the ATO is reportedly taking.
For the tax office, telling the truth is important
Whether it is in government or private enterprise, very often a small event encapsulates a massive problem and becomes a trigger for much-needed action.
Staking has become one of the most popular ways to earn a passive interest in the growing crypto ecosystem. However, regulators are now catching up, with the likes of the U.S Securities Exchange Commission (SEC) and Internal Revenue Service (IRS) narrowing down to Decentralized Finance (DeFi) projects. Most of these innovations have been built on the Ethereum blockchain and leverage a Proof-of-Stake (PoS) consensus to function effectively.
The Crypto Staking Tax Dilemma: Are Tax Agencies Taking the Right Approach?