New guide to help planners avoid tax traps

A new guide has been released by the Australian Taxation Office (ATO) to help tax advisers avoid falling into the trap of inadvertently marketing tax avoidance schemes.

Tax Commissioner Michael D’Ascenzo (pictured) said the Good governance and promoter penalties law guide aimed to help tax intermediaries manage controversial tax planning risks that would impact on them and their clients.

“The guide discusses the consequence of contravening the laws and how to establish the right governance controls to avoid those consequences,” he said.

The guide sets out current schemes that are of concern to the ATO, as well as how tax advisers can avoid these risks – or handle them should something go wrong.

The penalties for promoting tax avoidance schemes vary greatly, with the possibility of fines of up to $550,000 for individuals and $2.75 million for corporations.

“In most cases involving less serious conduct, we aim to help tax intermediaries self-correct where possible,” said D’Ascenzo.

“However, when it is appropriate to go to the Federal Court to seek a civil penalty or an injunction, it will have serious financial and reputational consequences for the entities involved,” he added.

This announcement comes as the Federal Government has extended the financial planning exemption on tax advice to give more time to develop a legislative framework.