The background
In July 2019, the ATO issued a formal notice to McDonalds. This noticed required them to produce documents within a deadline of one month.
However, unlike so much of McDonalds’ fast food, the requested documents were nowhere to be seen at the due date.
As such, the matter was referred by the Commonwealth Director of Public Prosecutions. McDonald’s entered a guilty plea to the single count of failing to comply with an information gathering notice.
The ATO and big business
The ATO tells us that it actively engages with the thousand biggest businesses that operation within the country. Unsurprisingly, this includes McDonald’s Australia.
Generally speaking, the ATO will only issue formal notices to taxpayers to collect information as a last resort. For example, where a cooperative approach is no longer productive or where a taxpayers’ circumstances, history or behaviour warrant the use of our formal powers.
The ATO clarified that it issues approximately 70 formal notices to large businesses on an annual basis.
Key…ahem… takeaways
The McDonald’s case demonstrates that even large companies will be held accountable for a failure to comply with its legal obligations. Where the ATO cannot secure the information it requires on an information basis it may use its extensive, formal powers