Research has shown that many participants in tax exploitation schemes are given advice to invest by financial advisors and tax professionals. Traditionally, it has been the participants in tax exploitation schemes who bear the risks associated with the investment and who are subjected to significant financial penalties when the schemes are proven ineffective. The designers and promoters of the schemes (financial advisors and tax professionals) have not been subject to penalties, except in unusual circumstances.
This project will examine the impact of the introduction of the promotor penalties legislation and the Australian Tax Office's administration of the legislation on financial advisors' and tax professionals' attitudes to the design and marketing of potentially risky tax minimisation schemes.
It will then evaluate alternative deterrent legislative measures and administrative approaches currently in operation under Australian law.
The project will conclude with recommendations for improvements to the structure and administration of the promoter penalties law.
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