Foundations of Taxation Law

To promote compliance with the tax laws and discourage tax avoidance and tax evasion, the Australian tax system is supported by various administrative and criminal penalty regimes. These regimes contain important sanctions and integrity measures that underpin the operation of the whole tax system. This chapter focuses on the following regimes: the administrative penalty regime contained in pt 4-25 of sch 1 TAA, the tax offences regime contained in div 2 of pt III TAA, and the promoter penalty regime contained in div 290 of sch 1 TAA. Penalties imposed under these regimes vary considerably depending on the nature of the offence. Where financial penalties are imposed, they are usually set by reference to penalty units. A penalty unit is $313 from 1 July 2023 and is subject to indexation every three years (s 4AA Crimes Act 1914 (Cth)). A general administrative penalty regime is located in pt 4-25 of sch 1 TAA. This regime contains standardised administrative penalties that the Commissioner can impose for breaches of the tax laws, including the income tax, GST and FBT laws.