The increase in administrative penalty amounts will apply to multinational groups with more than one billion Australian dollars (AUD) global group wide revenue (otherwise called significant global entities [SGEs]). The increase in penalties can apply for failing to file tax documents on time or in making a false or misleading statement in relation to tax matters. The new measure will generally apply from July 1, 2017.
This means that, in the absence of the Commissioner granting any remission of penalties, the minimum penalty that could apply to a SGE will increase from the current AUD 180 for filing a tax document (such as a tax return, activity statement, or a country-by-country report [CbCr]) between one and 28 days late, up to AUD 105,000 once the new laws take effect (the maximum penalty could be as high as AUD 525,000 for filing more than 112 days late).
PwC observation: Taxpayers may take their Australian tax compliance function more seriously because of the potential financial cost that these amendments impose. It is imperative that relevant taxpayers ensure that they have adequate processes and procedures in place to ensure that their tax obligations are met as and when required.