Tax minimisation and tax avoidance schemes

You are entitled to minimise your tax liabilities through investment activities and to receive the benefits provided for under the law.

Tax minimisation is when you legitimately arrange your tax affairs to reduce the amount of tax you pay. These arrangements comply with both the letter and spirit of the law.

However, investment schemes and legal structures that do not comply with the law are considered to be aggressive tax planning arrangements - referred to as tax schemes.

A tax scheme is an artificial or contrived arrangement to avoid or defer tax obligations. Schemes often involve a series of complex transactions. They typically move funds through several entities, such as trusts, in order to avoid or minimise tax otherwise payable.

Schemes may also involve distorting the way funds are being used to enable a taxpayer to claim deductions they are not entitled to.

Reporting a scheme

You can report a tax scheme by:

• calling the confidential Tax Planning Schemes hotline on 1800 177 006  between 8.30am and 5.00pm, Monday to Friday

or

• emailing  reportataxscheme@ato.gov.au

You should do this if:

• you have concerns about an investment arrangement or a promoter.

• you think you are involved in a tax scheme ·