Response to PwC - Reform of Promoter Penalty Laws - Exposure Draft

Response to PwC - Reform of Promoter Penalty Laws - Exposure Draft

On 20 September 2023, Treasury released exposure draft legislation on the Promoter Penalty Laws (Exposure Draft) that amends the Taxation Administration Act 1953 (TAA) to deliver part of the Government’s response to the PwC matter, announced on 6 August 2023.

The proposed changes include expanding the application of the Promoter Penalty Laws, increasing the time the Commissioner has to bring an application for civil penalty proceedings to the Federal Court, and increasing the maximum civil penalties for promoters of tax exploitation schemes.

The Exposure Draft is part of a package of draft materials released which also includes whistleblower protections, Tax Practitioner Board reforms and information sharing aimed at implementing reforms intended to strengthen the integrity of our tax system while increasing the power of Australia’s tax regulators.

In response, BDO has prepared a submission outlining several areas of concern including the wide application of Promoter Penalty Laws to all Australian Taxation Office (ATO) rulings, changes to the alternative maximum penalty turnover-based calculation, and the extension of actionable conduct to all partners in partnerships and all trustees of a trust that are significant global entities (SGE’s).


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