To help you get things right, the ATO has listed these behaviours, characteristics and tax issues as the ‘red flags’ attracting their attention.

ATO listed these behaviours, characteristics and tax issues

  • tax or economic performance is not comparable to similar businesses
  • low transparency of your tax affairs
  • large, one-off or unusual transactions, including transfer or shifting of wealth
  • a history of aggressive tax planning
  • tax outcomes inconsistent with the intent of tax law
  • choosing not to comply or regularly taking controversial interpretations of the law
  • lifestyle not supported by after-tax income
  • treating private assets as business assets
  • accessing business assets for tax-free private use
  • poor governance and risk-management systems.

Source: https://www.ato.gov.au/Business/Privately-owned-and-wealthy-groups/What-you-should-know/Transparency/What-attracts-our-attention/?tpissue-44-2016