Brief

On 29/01/2025, the Australian Taxation Office (ATO) issued an update regarding Online tax schemes on the rise. The ATO is urging individuals and businesses to be wary of online tax schemes promising significant reductions or avoidance, as getting involved can attract heavy penalties and potentially entice honest people who don't fully understand what they're getting into.

Potentially dodgy tax schemes are being promoted online and offered to people when they least expect it.
We're urging individuals and businesses to be wary of tax schemes promoted online (including via social media) promising to significantly reduce or avoid tax. Getting involved can attract heavy penalties.
Our website lists examples of tax schemes we are concerned about. Recently, we've seen one unlawful tax scheme encouraging people to dodge their taxes by setting up a purported not-for-profit foundationOpens in a new window and organising their finances to look like their income belongs to it.
Another recent scheme offers would-be investors the opportunity to invest into a start-up that allegedly qualifies as an early stage innovation company, to benefit from the associated tax offset. We're concerned investors won't qualify for this.
Such schemes have the potential to entice honest people who don't fully understand what they're getting into. Getting involved is risky.
Detecting and taking action on promoters of unlawful tax schemes is a priority for our Tax Avoidance Taskforce (TAT). A recent example of TAT action is the Federal Court handing down $13.6 million in penalties to research and development scheme promoters we investigated.
Don't fall for promoter tricks

Do your research before making tax decisions – you're ultimately responsible for your own taxes. Even if you get bad advice.
For too-good-to-be-true offers, get early, independent advice from a registered tax professional.
If you've unintentionally landed in a scheme, contact us immediately. Approaching us may make you eligible for a reduction in any penalties.

Report schemes to us
Paying tax is essential and those involved in schemes are taking money away from the community. If you're offered a suspicious tax scheme you should reject it and report it to us.

Highlights content goes here...

Purpose

The purpose of this document is to warn individuals and businesses about potentially dodgy tax schemes being promoted online, particularly through social media platforms. These schemes promise significant reductions or avoidance of taxes, but getting involved can lead to heavy penalties.

Effects on Industry

The promotion of unlawful tax schemes has the potential to entice honest people who are unaware of the risks involved. This can lead to financial losses and reputational damage for individuals and businesses who fall victim to these schemes. Furthermore, it can also undermine the integrity of the tax system as a whole, creating an unfair advantage for those who take part in such schemes.

Relevant Stakeholders

Individuals and businesses are the primary stakeholders affected by this issue. Anyone who is considering investing in or participating in tax schemes promoted online should be aware of the potential risks involved. This includes small business owners, entrepreneurs, and individuals looking to reduce their tax liabilities.

Next Steps

To avoid falling victim to these schemes, individuals and businesses should exercise caution when considering tax advice offered online. They should:

  • Do thorough research before making any tax decisions
  • Seek early, independent advice from a registered tax professional if they are unsure about the legitimacy of an offer
  • Report suspicious tax schemes to the relevant authorities immediately
  • Be aware that they are ultimately responsible for their own taxes and cannot rely on bad advice

Any Other Relevant Information

The Tax Avoidance Taskforce (TAT) is actively working to detect and take action against promoters of unlawful tax schemes. A recent example of TAT’s efforts resulted in $13.6 million in penalties being handed down to research and development scheme promoters. Individuals who have unintentionally landed in a scheme may be eligible for a reduction in any penalties if they contact the relevant authorities immediately.

Australian Taxation Office (ATO)

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