The Australian Taxation Office (ATO) is set to crack down on wealthy Australians with lifestyle assets as part of its focus for the taxable year ahead.  Entrepreneurs and private citizens with yachts and property farms that belong to private corporations but are being enjoyed for personal use will be the target of ATO. 

The tax office will also evaluate the tax structures and questionable shareholder loans. The ATO is bent on ensuring that wealthy Australians are paying their share of taxes and not dodging them by hiding behind elaborate business schemes. 

The Australian Taxation Office will also put multinational diverting profits offshore to areas with low tax regulations under scrutiny this taxable year, according to the office's Compliance in Focus published on Wednesday. 

The tax office will also increase its use of data-matching wherein information will be cross-referenced with other information such as interest earned in bank accounts against a taxpayer's declared income in tax returns. The ATO can now check on the correct reporting of flood levy exemptions and rebate claims on private health insurance.

ATO Second Commissioner Bruce Quigley said the tax office will be able to cross-reference about 640 million transactions for 2013 alone.  The Compliance in Focus report also revealed over 2,000 property developers placing companies for liquidation even if the company had outstanding GST debts. 

The Australian Taxation Office will also go after companies engaged in "phoenix activity" wherein a person places a company into liquidation to avoid paying debts.  The company will then resume operations under a new company name.  The tax office is keen to demand full disclosure from property developers. 

Company directors do not escape liability as the tax office will penalise directors if their businesses are not following the rules.

Top audit findings

A tax agent has assumed the identities of 22 young foreign labourers and filed fraudulent refunds worth $192,779. The agent was found guilty and sentenced to two years and six months in jail. The owner of a kebab shop in Brisbane was discovered to have underdeclared his income and sentenced to two years in jail without parole.

 Sourced from the International Business Times written by Reissa Su