Latest News

Hot Issues
spacer
ATO hit list 2025 – Key Areas Under Review
spacer
Why Succession Planning Matters for Privately Owned and Wealth Groups in Australia
spacer
Benefits of a business plan
spacer
Roles and Responsibilities in a Business Partnership
spacer
Mixing business and pleasure? Be vigilant this tax season
spacer
30 June 2025 - Tax Checklist - Small (and Micro) Business
spacer
3 more GST fraudsters sentenced under ATO’s Operation Protego
spacer
Evolution of Boeing - 1916 - 2025
spacer
ATO - Targeted Areas of Focus 2024-25
spacer
6 ways to improve your business plan
spacer
Benchmarks for small business
spacer
Beware the early lodgment tax trap, CPA Australia warns
spacer
Tax lawyer flags compliance traps with family trusts
spacer
Superannuation on paid parental leave from 1 July 2025
spacer
Tax Time Checklists Individuals; Company; Trust; Partnership; and Super Funds
spacer
Comparison of various Animal Weights
spacer
2025 Tax Planning Guide Part 2
spacer
From 1 July 2025 ATO Interest is no longer tax deductible
spacer
SME confidence and conditions see uptick over Q1 2025, survey reveals
spacer
Depreciation expert urges property investors to leverage tax depreciation
spacer
Buy a business
spacer
Upskilling and self-education costs
spacer
How secure is your super account?
spacer
Freshwater Resources by Country 2025
spacer
Why Might a Lease Dispute Occur?
Article archive
spacer
Quarter 2 April - June 2025
spacer
Quarter 1 January - March 2025
spacer
Quarter 4 October - December 2024
spacer
Quarter 3 July - September 2024
spacer
Quarter 2 April - June 2024
spacer
Quarter 1 January - March 2024
spacer
Quarter 4 October - December 2023
spacer
Quarter 3 July - September 2023
spacer
Quarter 2 April - June 2023
spacer
Quarter 1 January - March 2023
spacer
Quarter 4 October - December 2022
‘Follow the spirt of the law’, warns ATO

 

The Australia Taxation Office has cautioned businesses against taking advantage of the government’s most recent expanded asset write-off scheme and the new loss carry-back provision.

 

       

Full expensing of plant and equipment and the ability to carry back losses are two measures introduced in the budget with the aim of encouraging businesses to invest and accelerate economic growth after the COVID-19 crisis.

But speaking at an event hosted by the Australian Financial Review, ATO second commissioner Jeremy Hirschhorn expressed his concern over businesses turning to “artificial mechanisms” to take advantage of these measures.

“These measures should be embraced, but for the purpose for which they were introduced. Invest in new plant, upgrade your facilities, claim a tax offset and reinvest the money in your business and jobs!” Mr Hirschhorn said.

He also advised financial officers to do the right thing and refrain from artificially shifting profits and losses around their group to access the loss carry-back.

“At a more granular level as CFOs, make sure your business analysts are including these tax cash flow advantages in your DCF models, in conjunction with your heads of tax making appropriate variations to your tax instalments to bring home that cash flow advantage,” Mr Hirschhorn said.

“Similarly, accessing the loss carry-back to support executive bonuses, increased dividends or to repatriate cash to offshore related parties is likely to be viewed poorly by the community.”

Speaking about the “weighty” responsibility entrusted on the business community to recover the post-COVID economy, Mr Hirschhorn urged businesses to “follow the tax law, but also follow the spirit of the law”.

“I suspect the community will have even less sympathy for companies seen to be exploiting loopholes.”

Mr Hirschhorn further urged entities to consider the optics of “making a statement in your annual report noting that the pandemic has not substantially impacted the operations of your business while at the same time collecting hundreds of millions of dollars in stimulus”.

“You have been entrusted by the government with leading the economic recovery with a range of stimulus measures,” he said.

“With this comes increased expectations around corporate behaviour including tax. There is an opportunity to rise to these expectations and increase the community’s trust in large organisations.”

 

 

Maja Garaca Djurdjevic 
02 November 2020 
accountantsdaily.com.au

 

Liability limited by a Scheme approved under Professional Standards Legislation.
© O'Brien and Partners 2024 - All Rights Reserved | 333 Canterbury Road, Canterbury VIC 3126 | Tel: 03 9509 3911 Site by Acctweb