- Increase to penalty rates for multinationals failing to lodge ATO documents on time
Effective from 1 July 2017, increased administrative penalties will apply to “Significant Global Entities” (SGEs) who do not lodge income tax returns or documents on time.
An entity is an SGE if it is:
- Part of a global parent entity with an annual global income of A$1 billion or more, or
- A member of a group of consolidated entities for accounting purposes and one of the other group members is a global parent entity with an annual global income of A$1 billion or more.
Who will be impacted?
All local corporate entities regardless of their turnover must assess whether they have SGE status, and for those who are potentially impacted, determine the options available to them and take appropriate action.
When does this change come into effect?
The increased penalties will apply to all lodgements due from 1 July 2017 in respect of all documents required to be lodged by SGEs in an approved form, including the following (for example but not limited to):
- Income tax and fringe benefits tax returns
- Business activity statements
- Country-by-country reports
- General purpose financial statements
Changes to penalty rates
The FTL penalty changes are shown in the table below:
|Days late||28 days (4 weeks) or less||29-56 days (4-8 weeks)||57-84 days (8-12 weeks)||85-112 days (12-16 weeks)||112 days or more (16 weeks or more)|
|Previous penalty rates||$900||$1,800||$2,700||$3,600||$4,500|
|Penalty rates as at July 1, 2017||$105,000||$210,000||$315,000||$420,000||$525,000|
What do you need to do?
It is imperative that all taxpayers assess filing obligations to ensure they are in compliance with the new rules and fulfil all tax obligations on a timely basis.
To discuss how these measures impact you and the practical steps to take, please contact myself or your usual Grant Thornton advisor.