Tax office offers one year to fix company loans
Financial planners providing advice to business owners have been provided with a window of opportunity by the Australian Taxation Office (ATO).
The Commissioner of Taxation, Michael D’Ascenzo, announced today that business owners were being given a one-off opportunity to correct past mistakes regarding payments and loans from their private companies and, therefore, avoid any penalties under Division 7A of the Tax Act.
The one-off opportunity is based on the fact that recent changes to tax law have given the Commissioner of Taxation discretion to disregard the operation of Division 7A in circumstances where an honest mistake or inadvertent omission has been made. The ATO said the offer applied to mistakes made between 2001-02 and 2006-07.
D’Ascenzo said until July 1, next year, he was offering people the opportunity to correct past mistakes and omissions within the parameters of a new practice statement issued by the ATO.
He said that from July 1, next year, the ATO would resume audit work to ensure payments made by private companies were correctly accounted for and that company loans were not used to distribute tax-free profits.
AUTHOR
Mike Taylor
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
