The new Practice Statement Law Administration PS LA 2021/1, issued on Thursday, consolidates previous guidance PS LA 2008/7 and PS LA 2008/8 that have now been withdrawn.
The Practice Statement provides ATO officers with guidance on indicators of potential promoter behaviour, the process for making decisions about the promoter penalty laws, and how sanctions are applied.
The scope of the new guidance also now includes tax agents and advisers who promote illegal early access to superannuation despite release criteria not being satisfied.
Concerns around illegal access to super were raised by the ATO last year after it identified 1,200 taxpayers who withdrew money under the COVID-19 early release of super measure and immediately recontributed it in a bid to claim a tax deduction.
Other factors that may indicate promoter behaviour include advertisements or marketing for tax or superannuation schemes that seem “too good to be true”; tax agents and advisers offering tax savings in return for a large fee or a percentage of the tax saved; multiple clients of the same adviser engaging in similar arrangements that are unnecessarily complex, or seem designed primarily to get a tax or superannuation benefit; and schemes where anti-avoidance provisions have been applied.
The release of the new Practice Statement also comes after the ATO’s success in securing multimillion-dollar penalties against promoters in two recent tax avoidance schemes.
This includes the largest-ever promoter penalty of $22.68 million against former tax agent Paul Enzo Bogiatto and the recent $9.4 million penalty issued by the Federal Court to an accountant, a lawyer and a financial planner for their roles as promoters of an emissions trading tax scheme.
View the PS LA 2021/1 here.