Recently Australia’s most senior tax officials revealed that profits on more than $7 billion worth of sales generated in Australia will be taxed for the very first time. ATO commissioner Chris Jordan said that the Australia’s tax system accounts for the growth of these sales which means that taxes should also grow based on the profits.
At the Senate inquiry, Chris Jordan told senators that the recent crackdown on corporate tax avoidance is generating substantial results. ATO started to focus on multinational tax avoidance in recent years. ATO has managed to complete more than 1,000 reviews and audits on some companies.Entities have publicly disclosed assessments and adjustments due to ATO pressure.
Chris Jordan believes that ATO has achieved positive results because they have managed to clean up the past on back taxes owed to the government. They are looking at future arrangements to safeguard against repeated chase and tidy up scenarios. The tax avoidance taskforce is now focusing on companies to ensure that they are abiding with taxpayer alerts and public guidance that have been issued. Because of the multinational anti-avoidance legislation, profits of more than $7 billion worth of sales generated in Australia will be subjected to tax for the first time.
At the senate inquiry, the ATO commissioner was joined by executives from giant tech companies that include Facebook, Google, Apple, Microsoft and IBM. According to executives from Apple, the five-year ATO audit of the company has been concluded without any penalties because Apple taxes are up to date and they have committed to keeping the authorities informed of any future changes.
Chris Jordan said that there are no issues between Apple and ATO because the global giant has a straightforward business model in Australia and has managed to record all transactions and revenue locally. Apple is a complaint taxpayer and belongs to the top 50 list of corporate taxpayers in Australia.
It is likely for your client to face a tax investigation in the future to determine whether he is compliant with the revenue regulations. This requires discussion with the client on the importance of insurance accountant to ensure that there is protection against the substantial costs that will be incurred in proving compliance.