Compliance in Focus sets out the compliance issues and risks attracting the attention of the ATO.
This information is useful for taxpayers who want to adopt a more strategic approach in managing their tax risk. Compliance in Focus is not an exhaustive list of all compliance activities that the ATO will undertake, but it describes the key focus areas for 2013-2014.
One key focus is GST and business systems integrity. Of the 2.73 million entities currently registered for GST, the ATO’s compliance activities will focus on taxpayers who have undergone complex or structural changes to their business systems.
The ATO will show particular attention to the wholesale trade, manufacturing, financial and insurance, government and retail industries. Business system checks, as well as governance and risk workshops, are planned for taxpayers in these industries.
The ATO will continue to focus its attention on:
Refund integrity checks
The ATO has anticipated 43,000 refund integrity checks for GST and other indirect taxes, across all industries and markets.
Reporting of GST on property
The ATO will be focusing on taxpayers who incorrectly report GST when they acquire, use, develop, sell or transfer real property through ongoing monitoring and data matching.
Particular concern will be on fraudulent phoenix activity among property developers who fail to meet GST obligations and deliberately disengage from the tax system at the point of sale. The ATO plans to deter this by demanding lodgement, enforcing payment and applying penalties.
Serious attempts to evade GST
Compliance activities will include information matching and increasing the number of default assessments (including penalties of up to 75 per cent) issued to those who continually fail to lodge activity statements.
The new reporting requirements for the building and construction industry are also expected to assist in identifying those who are non-compliant with GST obligations.
Although deliberate non-compliance with GST is not widespread, the ATO will take strong action against individuals and businesses that do not comply.