The general rule for taxation amendments is that the Tax
Commissioner and taxpayers have fixed periods of time during which
tax affairs can be reviewed.
There are good policy reasons for these rules as they give the
Tax Commissioner plenty of time to review taxpayer's tax
affairs, and taxpayers can get on with their lives without worrying
about the Commissioner wanting to raise some new legal argument
about something that happened many years ago.
Generally, amendments cannot be made after 4 years, however the
Commissioner does have unlimited power of amendment where he
concludes there has been fraud or evasion.
There has been some controversy about GST time limits for
claiming new amounts or issuing refunds. Recent amendments to the
Taxation Administration Act 1953 were intended to level the playing
field so that in most cases there would be no new debits or refunds
outside the 4 year time limits.
From our dealings with the ATO it now seems that,
notwithstanding a clear policy intention that the parties move on
after 4 years, the Commissioner wants to argue that he can raise
new GST debits without time limit, provided only that the new
debits don't exceed the net amount previously claimed by the
What he seems to mean is that if you lodge a BAS statement
showing a net amount of $1,000.00, and this amount is subsequently
reduced, for example because of further input tax credit claims, or
because the GST payable was overstated, the Commissioner can raise
new GST debits outside the 4 year time limit (and seemingly
forever) provided the original net amount of $1,000.00 is not
This is a very convoluted position for the Commissioner to be
taking, and seems to us to be totally at odds with the policy
behind the legislation.
While we expect that the Commissioner's view will not
prevail in the long run, (and it is currently being disputed) any
GST audit or dispute dealings should be carefully undertaken and
clients and advisors need to remain alert to the ATO trying to push
the boundaries set in the legislation.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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