Posted November 03, 2018 15:01:51 A car trade company may have to pay up to $40,000 to the Government after a $500-a-day charge was found to be unconstitutional.
Key points:A car trading firm, which specialises in car parts, is being investigated for tax evasionThe Federal Government has warned it is “extremely concerned” about the issueIt has been contacted for comment but has not yet responded to the ABC’s request for comment.
The Australian Taxation Office (ATO) was investigating a car trading organisation after the Government said the organisation was running a “significant” business.
The ATO is currently conducting a formal investigation into the company, called Car Trader Solutions, after it was revealed it had been paying up to a quarter of a million dollars in tax over a two-year period.ATO director-general Michael Thwaites said in a statement:”The Australian public deserves to know that all companies operating in the car trading industry pay their fair share of tax.”
He said the inquiry was “extremely serious” and the organisation “has been warned that they may be subject to the application of the law if they continue to pay tax at a rate of more than $40 million”.
“The Government has advised that it is extremely concerned that the investigation is continuing and that they are taking the matter very seriously,” he said.
“They have asked for all information relating to the matter to be made available to them.”
What you need to know about tax and transparencyThe Australian Government has a number of tax and public disclosure rules that apply to car trading firms.
For example, car trading companies must declare whether they receive any profits from selling parts, machinery or services, or pay a tax in respect of those.
The rules also state that the Government has to take into account the business’ ability to pay.
The car trading giant, Car Trader Solution, operates on a $25 million profit-sharing scheme for its Australian staff.
“The taxpayer must not receive a profit from the car trade business,” the company says in its tax declaration.
“We have paid a significant amount of tax over the past two years.
We are aware of this.”
Car Trader Solutions says it was in breach of the rules, but the company is still in the process of appealing the decision.
The company has been accused of operating at a loss and failing to disclose its full tax arrangements.
The ACCC has also warned that it will pursue the case with the Federal Government.
The Department of Finance has also been contacted about the case.
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