Australian Tax Whistleblowers: Increased Protection – Introduction
As of 1 July 2024, the Australian Taxation Office (ATO) has implemented new measures to strengthen legal protections for individuals reporting tax avoidance activities.
These new protections now extend to whistleblowers connected with the Tax Practitioner Board (TPB) and establish a robust framework to ensure the safety and confidentiality of those who disclose such information.
Criteria for Whistleblower Protection
To be eligible for protection as a tax whistleblower, the following conditions must be met:
- Connection to the Entity: You must currently or previously have had a specific relationship with the entity in question, such as being an employee, former employee, dependent, or spouse.
- Reporting Channels: Disclosures must be made to the ATO or an authorised recipient, such as an internal auditor appointed by the entity, who can take the necessary action.
- Intent of Disclosure: The information provided must be reasonably believed to assist in enforcing taxation law.
Even if these criteria aren’t fully met, individuals can still provide a tip-off, with the ATO committing to maintaining confidentiality.
Types of Disclosures Covered
Protected disclosures include:
- Information aiding the ATO** in its responsibilities under taxation law.
- Reports made to eligible recipients** on reasonable grounds that suggest misconduct or irregularities in the entity’s tax affairs.
Eligible recipients are usually those with a formal relationship to the entity, such as registered tax agents or BAS agents.
Protection Measures for Whistleblowers
Identity Protection
It is illegal to reveal a whistleblower’s identity without their consent. Disclosure is only permissible to authorised bodies like the ATO or an auditor under strict confidentiality rules. Whistleblower identities are protected during court proceedings unless the court deems it necessary for justice.
Legal Practitioner Disclosures
Communications made to legal practitioners for advice or representation related to tax whistleblowing are protected, even if the whistleblower does not meet the full eligibility criteria.
Liability Protection
Whistleblowers are safeguarded against civil, criminal, and administrative liabilities arising from their disclosures.
They are also protected from employer retaliation, such as wrongful termination or contract breaches.
Additionally, while the ATO can use disclosed information for tax assessments or penalties, it cannot use self-incriminating evidence against the whistleblower in criminal proceedings.
Protection Against Detrimental Conduct
It is illegal to inflict any form of detriment on a whistleblower, including dismissal, harassment, or financial harm.
If detriment occurs, whistleblowers can seek legal remedies, including compensation for damages, reinstatement of employment, injunctions to prevent further harm, and formal apologies.
Reporting Process
Whistleblowers can report tax avoidance using the ATO’s tip-off form, available online, via the ATO app, by phone, mail, or through tax practitioners.
Whistleblowers have the option to remain anonymous, with confidentiality assured throughout the process.
Corporate Whistleblower Policies
Since 1 January 2020, public companies, large proprietary companies, and proprietary companies acting as trustees of registrable superannuation entities are required to have a corporate whistleblower policy.
The Australian Securities & Investments Commission (ASIC) offers guidance on how to incorporate tax whistleblower policies into broader corporate governance frameworks.
Australian Tax Whistleblowers – Conclusion
The ATO’s new measures, effective from 1 July 2024, provide substantial legal protection for tax whistleblowers, including those linked to the Tax Practitioner Board.
These enhanced protections ensure confidentiality, safeguard against retaliation, and offer pathways for compensation, thereby fostering a safer environment for reporting tax avoidance and misconduct.
This strengthened framework highlights the ATO’s dedication to upholding integrity within the tax system and supporting those who contribute vital information.
Final thoughts
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