Australian tax: Australian Tax Office (ATO) Compliance Program 2009-10

The Commissioner of Taxation recently released the 2009-10 ATO compliance program. In the program, the Australian Tax Office has announced that this year individuals and businesses can expect increased scrutiny of tax returns, with specific focus on losses, high risk refunds, eligibility for tax offsets and employee share schemes.

For employers, the focus will be on ensuring PAYG withholding and superannuation contribution obligations for employees are met.


Impact on individuals

High-wealth individuals and company directors and executives -
The Australian Tax Office has indicated that it will continue monitoring highly-paid company directors and executives, as well as other high-wealth individuals. The monitoring of high-wealth individuals will be expanded to include people with a net wealth of between $5 million and $30 million, compared with the original $35 million and over bracket.

Deductions claimed - The Australian Tax Office will be focusing its attention on occupations with patterns of large/rising claims, income tax returns that do not fit the pattern for a particular occupation and claims in returns lodged by tax agents that are outside the norm. Work-related expense claims for people employed as truck drivers, sales and marketing managers, sales representatives and electricians have been specifically identified. Claims relating to retail investment products, managed investment schemes and other retail financial products are also being targeted to ensure deductions claimed are legitimate.

Increased information matching and implementing new technologies - The ATO has advised that its data matching activities in executive and director remuneration will be expanded to ensure shares and options are being correctly reported.

Data matching will also include matching information supplied by overseas revenue agencies and AUSTRAC against income tax returns to identify unreported foreign income.

New technologies will also be implemented to identify fraud, including unregistered tax return preparers and identity theft more effectively.

Impact on employers - The Australian Tax Office has advised that it will be increasing audit coverage of employers this year, including reviewing returns to ensure that PAYG is withheld and tax is paid and superannuation contribution obligations for employees are met. The correct fringe benefits tax treatment of motor vehicles will also be a focus.

Superannuation - Identifying taxpayers who have exceeded the superannuation cap as well as identifying employers with a high risk of not meeting superannuation guarantee obligations will be focal points. The Australian Tax Office will be following up complaints from employees about employers not paying the correct amount of superannuation.

The Australian Tax Office will also concentrate on identifying and responding to illegal early access schemes.

TAX NEWS - SEPTEMber 2009

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