Last Chance To Fix Tax Mistakes Without Penalty, Says ATO

by Mary Swire, Tax-News.com, Hong Kong

19 June 2008

Time is running out for taxpayers to take advantage of a one-off opportunity to correct past tax mistakes for payments and loans from private companies without facing penalties or interest, the Australian Taxation Office announced this week.

Taxpayers who take advantage of these arrangements and self-correct mistakes can do so without the need to advise the Tax Office, the ATO was keen to point out.

Tax Commissioner Michael D’Ascenzo stated that shareholders, business owners and others associated with a private company have until 30th June 2008 to take the opportunity to get their tax affairs in order under these concessional arrangements:

“Last year changes to tax law gave me the discretion to disregard the operation of Division 7A in circumstances where an honest mistake or inadvertent omission has been made," he explained, continuing:

"From 1 July this year, the Tax Office will resume audit work to ensure payments made by private companies are correctly accounted for and company loans are not used to distribute profits tax-free."

Mr D'Ascenzo went on to add that:

"I must remind taxpayers that penalties and interest will apply after June 30, 2008 unless a Tax Office ruling is obtained."

"I urge people to read our practice statement PSLA 2007/20 and take action to fix any mistakes before it is too late," he concluded.

Recommended