Aggressive tax advisers on notice

Prominently aggressive tax advisers and tax managers are likely to be more closely targeted by the Australian Taxation Office (ATO) on the basis of the risk they present to businesses.

The Commissioner for Taxation, Michael D’Ascenzo, used an address to the Corporate Tax Association to warn large companies of the ATO’s vigilance with respect to the types of transactions they enter into and the role played by some advisers.

“Where a transaction and its ultimate outcome are based on commercial (and not tax) grounds large business should not need to worry about the application of the general anti-avoidance provisions of the law,” he said. “On the other hand, these provisions may apply to arrangements structured in such a way that their prevailing purpose is tax avoidance (even where the arrangement has a broader commercial objective).

“We are currently considering including more prominently aggressive tax advisers and tax managers as one element in our risk rating and sharing this aspect of our risk rating with senior management in the large business,” D’Ascenzo said.