Australia’s government will be amending the tax law to strengthen the current tax penalty regime, as part of the 2024–25 Mid-Year Economic Fiscal Outlook. The announcement was made by ATO is a release on 18 December 2024.
The new measure will:
- Ensure tax scheme penalties apply where taxpayers are in a loss position, from 1 July 2026.
- Penalise large taxpayers that mischaracterise or undervalue interest or dividend payments, to which withholding tax would otherwise apply, starting from 1 July 2026.
- Extend the application of the Shortfall Interest Charge to repayments of overclaimed refundable offsets to disincentivise overclaiming, starting from the first 1 January, 1 April, 1 July or 1 October after Royal Assent of the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024.
This measure will target several gaps within the current tax penalty regime to improve tax compliance and integrity of the tax system, and to strengthen the disincentives for tax avoidance.
