| Company Tax is
payable by businesses on the amount of income it has generated
in a given financial year. The tax office conducts Company Tax
Audits to ensure that business owners are compliant with their
legal obligations and are conducting their business fairly
within the tax system.
We have included some brief information below about Company
Tax Audits.
For more detailed or specific information regarding Company
Tax Audits complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) to arrange an
appointment.
Micro-businesses
Personal services income
- The ATO is examining the status of personal services businesses
to verify whether they legitimately pass one of the personal
services business tests. The ATO pays close attention to
deductions that are not allowed by the legislation. The ATO will
review 270 taxpayers who may be subject to the alienation of
personal services income legislation.
Losses
This year the ATO will:
- Review 200 claims for losses that may not be eligible to be
claimed in the current year under the non-commercial losses
rules;
- Complete the current reviews of a number of consolidated
groups to identify incorrect consolidated memberships; and
- Continue the focus on the eligibility of participants in the
boat charter industry to claim business losses.
Small-medium Size Enterprises
Losses
The ATO is continuing to review the large number of small to
medium enterprises that generate and recoup losses as the ATO
works to identify non-compliant practices such as:
- Claiming inappropriate and inflated deductions;
- Under-reporting income;
- Profit-shifting;
- Recouping losses but not taking into account changed ownership
or the fact that a different business is being conducted;
- Misclassifying losses as capital or revenue;
- Using loss arrangements to minimise tax, where the origin of the
losses is artificial and has no economic or legal basis;
- Attempting to use related-party losses outside of the
consolidation regime; and
- Creating losses by incorrectly using the consolidation cost
setting rules, or otherwise incorrectly applying the
consolidation loss rules.
Large Businesses
Income and Deductions
The ATO is paying close attention to significant adjustments
made to income and expenses, particularly in cases where profits
are significantly reduced by tax reconciliation adjustments. The
aim is to ensure that:
Items of income are not improperly deferred or claimed as
capital items; and
Items of capital expenditure are not claimed as revenue
deductions.
The ATO will also review large deductions for research and
development, particularly in the banking and mining sectors.
Losses
This year the ATO is reviewing high-risk cases where businesses
have declared losses, checking the:
- Validity of losses being carried forward;
- Origin of losses generated; and
- Origin of losses transferred into consolidated groups.
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Our dedicated team can assist you with all your auditing
needs.
Complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223
9166 to arrange an
appointment.
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