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Promoter penalties
Published on 01 Feb 22 by "THE TAX SPECIALIST" JOURNAL ARTICLE
It has been 15 years since the introduction of the promoter penalty regime (PPR). Although there have only been a few notable cases before the courts, the focus and ambit of the regime has become clearer, and the courts have handed down significant penalties that reflect both the need to protect taxpayers and the community’s attitude against such egregious activity. The PPR has become another weapon in the Commissioner’s armoury for effecting change in attitudes and behaviour in the tax advisory landscape. Therefore, tax advisers now need to be aware about how their conduct may constitute a tax exploitation scheme, but more importantly, how such a scheme might be promoted. In this article, the author considers recent cases, including FCT v Bogiatto and FCT v Rowntree, and argues that what might seemingly be normal commercial behaviour between a tax adviser and a taxpayer can inadvertently transpose into prohibited conduct with the prospect of prosecution and substantial civil penalties.
The author also considers the court’s approach to assessing penalties and whether imprisonment could ultimately occur as a consequence of a promoter’s conviction, and suggests that such an outcome is open to the court.
Author profile
Arthur ATHANASIOU
The Tax Institute is Australia's leading professional association and educator in tax providing the best resources, professional development and networks.