Compliance and tax investigations
The ACT Revenue Office collects revenue to safeguard the financial future and progress of the ACT. We monitor and ensure the integrity, fairness and effectiveness of the territory’s taxation system and play a key role in enforcing revenue laws and protecting public revenue.
Compliance develops strategies and conducts investigations to ensure taxpayers meet their legal obligations. Our focus is:
- maximising voluntary compliance
- ensuring taxpayers have a clear understanding of their obligations
- investigating, assessing and where necessary prosecuting
- recovery of outstanding monies.
To ensure fairness for all ACT taxpayers, we use a system of penalties in certain situations when people do not voluntarily meet their taxation obligations. For example, we may impose interest and penalty tax if you underpay, fail to pay or pay late. The penalty tax rate ranges from 25 to 100 per cent of the tax you owe, depending on the circumstances.
We may reduce your penalty tax if you make a voluntary payment and disclose any discrepancies you discover in detail before an investigation begins. If you obstruct or hinder an investigation, your penalty tax may increase.
ACTRO shares information with the Australian Taxation Office (ATO) and revenue offices. Information is also gathered from other Territory directorates, Federal government departments and private enterprises.
For example, the ACT Revenue Office works with the ATO and other agencies to combat illegal phoenix activity through the Phoenix Taskforce. Further information on the Phoenix Taskforce can be found here.
Audits and investigations
Compliance undertakes audits and investigations to ensure taxpayers pay the correct tax or duty, and reviews grant and concession eligibility. We try to provide you with the highest possible standards of integrity and service in the course of our investigations.
Compliance selects matters to be investigated in a number of ways, including:
- data led projects driven by business intelligence
- trend analysis
What happens if you're selected?
If you are selected for audit/investigation, we will conduct either a field audit or a desk audit. When we carry out a field audit, the investigator will:
- contact you to let you know that we’re conducting an investigation
- explain the process and scope
- specify the records you need to produce and/or make available for inspection
- provide you with a reasonable amount of time to prepare those records
- arrange a time and place to interview you or your representative
- confirm the arrangements in writing
- show you their identification authority card, upon request, before or during an audit.
When we perform a desk audit, the investigator will:
- contact you in writing to let you know that we’re conducting an investigation
- specify the records you need to produce and send to the investigator
- provide you with a reasonable amount of time to prepare those records.
To prepare for an investigation, make sure you have the requested records ready for the investigator at the specified time. If you discover any discrepancies or undeclared tax liabilities and disclose these omissions to the investigator in detail, a penalty reduction may apply.
In dealing with complex matters, you may want to ask your legal or financial representative for advice. We encourage you to do so if it helps you understand the relevant issues.
As for what to expect in the course of an investigation, the length of the investigation largely depends on the complexity of the issues, the information you provide, how quickly you provide it, and its accuracy and completeness.
During an investigation, the investigator may conduct interviews and ask questions to determine your compliance with tax legislation, and may examine and test your records.
If the investigator finds any issues, they will notify you of the outcome of the audit in writing, detailing any actions you need to take.
All ACTRO officers must adhere to strict legislative secrecy provisions. They will treat any information gathered in the strictest confidence and won’t use or divulge your information unless the law requires them to do so.
If you have any questions about the arrangements for an audit or the investigation process, please contact the investigator or contact officer.
What are the investigator's powers?
Investigators have a range of powers. They can:
- access and inspect any buildings and property
- examine, seize and remove, or copy books, documents or records
- require people to answer questions and provide information
- require people to provide access to any documents they have and to otherwise provide reasonable assistance
If you do not comply with an investigator’s lawful requests, you may face increased penalties and prosecution.
During an investigation, you need to:
- give the investigator reasonable assistance and facilities in which to work
- provide complete and honest answers and explanations to questions
- provide prompt, full and free access to all relevant information, records, documents, data and systems as necessary.
If you unduly delay the provision of information, or impede an investigator from exercising their duties, you may face greater penalties and potentially prosecution.
If we’re investigating your case, you have certain rights before, during and after the investigation.
Before the investigation commences, you have the right to:
- ask for reasonable time to produce your records
- if it is a field audit, negotiate the time and place for the audit/inspection of records with the investigator
- receive written confirmation of those arrangements.
During the investigation, you have the right to:
- expect the investigator to be professional and courteous
- see the investigator’s identification authority card
- involve your accountant, legal representative or other representative
- ask how long the investigation will take
- expect the investigator and the ACTRO to treat your affairs with strict confidentiality
- obtain a receipt for records or other material the investigator removes from your office or possession
- have the opportunity to explain the reasons for any irregularities or discrepancies.
At the end of an investigation, you have the right to:
- receive an explanation of the results or findings
- ask the investigator how the ACTRO applies penalties
- ask for information regarding your rights to an internal review or appeal
- discuss any aspect of your case with the investigator or their supervisor.
In order to correctly determine and assess your liability you need to keep appropriate records. For example, if you are applying for the First Home Owner Grant (FHOG), you need to demonstrate that you’ve met the residency requirements. You may have to prove residency by providing evidence that confirms your occupancy period.
All of your records should correctly document and explain the items to which they relate. They need to be in English, and you should be ready to produce if we require them.
You are required to keep your tax records for at least five years after you made or obtained them, or for at least five years from the completion of the relevant transaction.
The documents you need to keep include, but are not limited to:
- copies of contracts, transfers, settlement statements and related documents
- completed revenue office forms for each relevant transaction, including supporting evidence, such as:
- income evidence for the Home Buyer Concession Scheme (HBCS)
- court orders or agreements
- wage records for payroll tax
- relationship evidence for FHOG and HBCS
- certificate of occupancy
- proof of residency
- rental agreements
- documents that support exemption claims
- evidence supporting a purchase price adjustment
- third-party evidence for meeting certain conditions, such as financing approval, building inspection or pest inspection
- valuer's reports or valuation notices
- any other relevant supporting documents.
Failing to keep the proper records is an offence.
Other record-keeping offences include:
- making a record or providing information that’s false or misleading
- destroying records
- omitting information
- failing to lodge documents or returns
- falsifying or concealing a taxpayer’s or other person’s identity
- failing to provide documentation or information to the Commissioner for ACT Revenue
- hindering, obstructing or failing to answer questions of the Commissioner or of an authorised tax officer.
These offences may result in higher penalties and/or prosecution.
ACTRO investigates anonymous disclosures and tip-offs from members of the general public.
We assure confidentiality, and we welcome any information you have about any instances of non-compliance with the taxes, duties and grants we oversee.
You can report a disclosure – either anonymously or otherwise – to the ACT Revenue Office by phone at (02) 6207 0004 or online using contact us form.