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Tax Commissioner's advice to landlords invites breach of ABN laws

Publication date: 30 May 00 | Source: THE TAX INSTITUTE

In advising landlords that they are not required to quote an ABN to their tenant even if there is some minor business use of the property by the tenant, the Commissioner of Taxation is effectively telling property owners to ignore the law, according to the Taxation Institute of Australia President, Mr Ray Conwell.

"The ABN law is quite specific on who needs to apply for an ABN," said Mr Conwell.

"By advising landlords via press release against applying for an ABN, the Commissioner is acknowledging that the Tax Office will not penalise some individuals who are clearly not complying with what the new law requires them to do," he said.

"The Commissioner has no legal authority to make such statements and such comments leave both tenants and landlords in an invidious position."

"Do they follow the Commissioner's press release and hope that the Tax Office stands behind these statements or do they follow the law because it requires tax at 48.5% to be deducted unless an ABN is quoted?" Mr Conwell said.

Mr Conwell noted that the Commissioner does have the power to vary the withholding rate to zero, but inexplicably appears not to have adopted this approach.

The Taxation Institute has identified a number of other areas of the ABN and associated PAYG provisions which appear to have unintended consequences. In all of these cases, it is imperative the Commissioner advise the Government that the laws should be amended.

"It is not acceptable for the Commissioner to issue a press release effectively saying 'don't bother complying with the law, because we will turn a blind eye to it'," said Mr Conwell.