Common Penalties & Legal Consequences for Tax Evasion in Australia

In a bid to make more money, some rogue businesses and individuals try clever ways to avoid paying the right tax. But this won’t go for long without the taxman noticing you have been filing incorrect tax returns.  

Tax evasion is a serious criminal offence in Australia. It’s a violation of the Criminal Code Act 1995 and subject to criminal investigation and prosecution. Penalties include confiscations of properties and even long jail terms. 

Tax Evasion Offences and Penalties 

There are so many types of taxes in Australia, with income taxes, property taxes and corporate taxes being the most popular. They are also the most evaded taxes, especially by those in businesses. Other taxes that are evaded included goods and services taxes, as well as taxes on inheritance.  

Here are the most common tax evasion offences and legal consequences: 

False Tax Returns 

This is the most common trick people use when filing for tax returns. They provide falsified information that enables them to reduce the amount of taxes payable to the Australia Tax Office (ATO). Under section 134.1(1) of the Criminal Code Act 1995, this is a crime punishable by law. 

The prosecutor must prove that you deliberately filed false tax information with the intention to defraud the state. You need a good legal team to prove it was an error. If found guilty of obtaining property by deception, also called false tax returns, you can be fined or sentenced to a maximum of 10 years in prison. 

Claiming False Benefits 

Under section 134.2(1) of the Act, it is a criminal offence to obtain financial advantage by deception. Some individuals may try to put false information to obtain tax benefits, such as falsely increasing deductible items on their tax returns. A good example is lodging a false claim on money donated to charity. 

Though the prosecution will need to prove beyond reasonable doubt that you hatched a plan to gain a financial advantage through deception, the penalties are severe when found guilty. You can be asked to pay hefty fines or serve a maximum of 10 years in prison. 

Obtaining Financial Advantage 

Under section 135.2(1) of the Act, it is a criminal offence for anyone to obtain financial advantage from ATO. If you knew that you were not eligible for the tax benefit and claimed it, you have committed a tax offence. If you deliberately engage in an act to obtain a financial advantage from ATO, you have committed a crime. 

If the prosecutor proves these two elements beyond reasonable doubt and the court finds you guilty, you can be fined or put in jail for a maximum of 12 months or both. 

Conspiracy to Defraud 

It is a criminal offence to conspire to defraud the state. Under Section 135.4(3) of the Act, it is a crime if it is proven that you and another person(s) conspired to cause loss to the Australia Tax Office (ATO).  

This tax law is made to cater for the situation where more than one entity or person conspires a tax fraud. If found guilty, both or all involved persons share liability. The maximum sentence for this tax offence is 10 years imprisonment. 

If you are charged with a tax evasion offence, the team from Bouchier Khan Lawyers can help ensure your interests are taken care of, including the possibility of appealing for a reduced penalty if found guilty. Contact us today!