Accountants have been advised to brace for more audit activity set to come in 2018, following the fallout of the Paradise Papers, says one tax lawyer.
Increased audit activity on the horizon for 2018
The Paradise Papers revelations, which explore 13.4 million documents around the workings of investors utilising international tax havens, will see the ATO focusing on audits, says Brown Wright Stein Lawyers partner Geoff Stein.
“I believe there will be more ATO audit activity. Some of this will be driven by the analysis of the Panama Papers and the fallout from the Paradise Papers and some as the result of the more sophisticated modelling of wealthy Australians, with a particular focus on the property sector,” said Mr Stein.
“There will be a lot of headlines about attacks on multinational profit shifting, but no amended assessments.”
Mr Stein’s comments echo those of Thomson Reuters managing director for Australia and New Zealand Ben Scull, who believes the regulator will have increased visibility in tracking down non-compliance once the 31 December 2017 Base Erosion and Profit Shifting (BEPS) Action 13 kicks in.
“I think the ATO does have the availability to ensure and mandate compliance from these multinationals,” Mr Scull told Accountants Daily.
“With the 31 December BEPS Action 13 deadline looming for country-by-country reporting and the ATO’s Streamlined Assurance Review programme, combined with public demand to reveal tax status via the Transparency Code – multinationals are now under unprecedented pressure to be compliant.
“The most important issue coming out is that companies will need to be very prepared for what's going to come and the December lodgment time frame where the tax office is going to have a lot more information readily available.”
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