The ATO has revised its approach to how it will apply penalties to promoters of schemes who encourage illegal early access to superannuation, extending the period in which it can take action.
The regulator released the changes on 21 August in a revised version of Practice Statement Law Administration (PSLA) 2021/1, which sets out its approach to promoter penalties in regards to tax exploitation schemes, the misuse of ATO rulings and the illegal early access of superannuation.
The revised PSLA 2021/1 follows the passing in May of the Accountability and Fairness Act 2024, which expanded tax promoter penalty laws and extended the period in which the ATO commissioner can launch legal proceedings from four years to six years.
Commenting on the revisions, the Institute of Financial Professionals Australia (IFPA) noted the scope of the promoter penalty laws had been broadened for tax and super schemes.
“For example, promoter penalties can now apply in relation to wrongly claiming that a scheme being promoted or implemented conforms to any ATO guidance, not just product rulings, while offering early access to superannuation on a contingency basis will also be caught,” IFPA said.
“The provisions can also apply where a promoter receives a ‘benefit’ rather than ‘consideration’.”
In regards to super, PSLA 2021/1 stated factors that may indicate promoter behaviour in regards to early access include “tax agents, consultants or other advisers (whether registered or unregistered) offering tax savings or early access to superannuation in return for a percentage of the tax saved or amount of superannuation accessed”.
The ATO also stated “tax agents, consultants or other advisers (whether registered or unregistered) offering or encouraging early access to superannuation before a condition of release has been met” was also an indicator of promoter behaviour.
While the revisions did not indicate any changes in the size of the maximum penalty the Federal Court could impose, it currently stands at 2400 penalty units, which at the current rate of $313 per unit would equate to $751,200.
