If you are an Australian in business, it is good to know that the ATO actively encourages early engagement at critical moments in your business journey.  This includes situations like significant commercial deals and restructure events like succession, which may attract different tax treatments. 

At Semmens & Co, we know that your tax and super affairs can be complicated.  For this reason, we can and will engage the ATO regarding a pre-lodgment agreement where we believe it is required.  We work with our clients directly to gain a clear understanding of your circumstances and address any issues for you as soon as possible. We will then contact the ATO to seek a pre-lodgment agreement for any commercial deal you are considering or have recently completed.

In these scenarios the ATO aims to actively assist privately owned companies and wealthy groups by offering pre-lodgment compliance advice. This offer of assistance is available when commercially significant business transaction that may affect the structure of the business, for example:

• demergers
• divesting
• financing and refinancing
• initial public offerings
• mergers and acquisitions
• private equity
• restructures
• sale of business (partial or complete) or business assets
• sale of commercial property
• share buybacks
• takeovers.

The benefit of early engagement is practical guidance and certainty from the ATO, whilst you are planning for change or before lodgment.  This will help you reduce the risk of nasty unknown and unplanned for surprises.

This will help:

• help resolve tax technical issues relating to the deal;
• work towards agreement on the tax position you intend to take; and,
• help you meet your tax obligations and reduce the likelihood of a review.

The ATO will work with us to review proposed deals, discuss the tax implications of the proposed transactions and, provide practical certainty on the tax outcomes of the proposed deal. They can be engaged pre-lodgment or after the deal has been completed and assist in reaching an agreement as to how and when the transaction will be reported for tax purposes.

At critical junctures in your business journey, it is best to pro-actively engage the ATO to discuss commercial deals and work with them to understand the tax implications of your strategy. Further, Semmens & Co will work transparently with the ATO, ensuring you achieve resolution of any tax issues prior to lodgment and avoid potential tax disputes.  By doing so, you can avoid potential tax disputes that can occur post lodgment, as well as penalties and interest where amendments are required to correct reporting. If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation

Foreign Revenue Authority

You may be contacted by the ATO if they receive information from a foreign revenue authority or other third parties, to indicate that you have received income from another country. Foreign income includes most pensions and annuities, interest, dividends, royalties, rent, capital gains and personal services income.

The Common Reporting Standard (CRS) gives the ATO access to financial data from over 65 foreign jurisdictions, which have committed to exchanging information with each other.  Further, the ATO Assistant Commissioner, Karen Foat has reportedly said that with financial account information of more than 1.6 million offshore accounts, holding over $100 billion, now available to the ATO, attempting to hide income and assets offshore was pointless.

“If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount may be. This may include income from offshore investments, employment, pensions, business and consulting, or capital gains on overseas assets,” Ms Foat said.

“Australians that deliberately move cash overseas in an attempt to hide it should be concerned. Hiding your assets and income offshore is pointless. ‘Tax havens’ are becoming a less effective model as international agreements improve transparency. You can no longer hide money behind borders.”

The ATO may also request further information from you if:

• you report a large amount of foreign losses; and,
• we have information from a foreign revenue authority or other third parties, indicating you may have received income from another country.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.