If you employ backpackers who are in Australia on a 417 or 462 working holiday visa there are some things you’ll need to do following the tax rate changes that...
Everyone who running the business try to avoid the taxation Audit. The best scenario is the paying the minimum tax under the taxation law boundaries. Some taxpayer tightrope act in the border between tax avoidance and evasion dislike the Audit of ATO. In fact, the Australian tax administrations fairly trust the taxpayer rather than Korea. For example in Korea, they have to report all of the Business registration number in every transaction for Goods and Service Tax (GST) report. When it does not match each other, the taxation office will request the explanatory materials so they could recognize the omission of only one transaction. However in Australia, sometimes the ATO could be blamed that they generate the tax evasion because they did not strictly regulated the reporting. In other words, it is good to be trust the taxpayer, but it is easy to do evasion by loosen tax regulation from the ATO.
However, the ATO basically implement a policy to trust the taxpayer. They request the heavy price for betray trust when the ATO found the tax evasion on purpose. Mainly, they impose the additional tax as well as the penalty. According to the nature of evasion, they charge the taxpayer with a crime. The additional tax managed quiet flexibly, and it is subject to the amount, intention etc. thus, they remit for simple mistake but heavily impose the tax for evasion on purpose.
The ATO process the review before commencing the Audit. The purpose of review is to decide whether to process the Audit or not and help the taxpayer to correctly amend for the simple mistake. In general, review processed via phone call or interview with the account who in charge of the tax payer. If they found the big difference from the review, the ATO decide to commence the Audit. In general the review process will takes 40 to 90 business days.
According to the Review, the ATO decide to commence the Audit and the Audit process will takes 90 to 250 business days subject to the nature. There are diverse methods of audit and mainly they compare the statistical data from similar business such as the ratio of sales, wage, profit etc. After that they focus investigation on the doubtful parts. If they found any tax evasion from others, they will impose the small action to the additional taxpayer.
The Audit proceeds relatively reasonable method. However, the taxpayer could not expect the good results if they do not provide the enough documents. Even though the good officer, they have to impose the additional tax without the evidence. Therefore, keeping the records are very important and it have to be keep stored for at least 5 years. The taxpayers are able to provide the other document when they lost it but it unfavorable to the taxpayer so please prepare the tax audit by managing the tax related documents.
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