According to the Tax Office, McDonald’s Australia failed to comply with an information-gathering notice from the ATO.
ATO deputy commissioner Will Day said the outcome serves as a reminder to all taxpayers to be open and transparent in their dealings with the ATO.
“The vast majority of taxpayers willingly engage with us and voluntarily provide the information we need to undertake reviews and audits,” Mr Day said.
“We only issue formal notices to taxpayers to obtain information as a last resort; where a cooperative approach is no longer productive or where a taxpayers’ circumstances, history or behaviour warrant the use of our formal powers.
“As such, we expect the taxpayer to treat them seriously and respond in a timely way.”
On 26 July 2019, the ATO issued a formal notice requiring McDonald’s Australia to produce documents with a compliance date of 30 August 2019. However, despite continued engagement with McDonald’s Australia to obtain the information and resolve the matter, the documents were not provided by the compliance date.
The matter was subsequently referred for prosecution by the Commonwealth Director of Public Prosecutions, which saw McDonald’s Australia plead guilty at the Downing Centre Local Court in Sydney to one count of failing to comply with an information-gathering notice.
Mr Day explained that the ATO has intense one-on-one engagement with the top 1,000 companies operating in Australia, which provides access to vast amounts of information.
“We issue about 70 formal notices to large business each year as part of our compliance activities to obtain information that is not forthcoming through this ongoing engagement,” Mr Day commented.
“The community rightly expects that big business is held to the highest standards and our compliance checks ensure large corporate groups are held to account.
This matter also highlights the importance of complying with ATO information gathering notices. Adequate information is necessary for the ATO to be assured an entity is meeting its obligations.
“Instances where taxpayers have failed to comply with requests for information rarely result in criminal convictions as most will work with us to meet their obligations,” Mr Day explained.
“However, where taxpayers hold back necessary information or documents, the ATO will initiate prosecution action.
“We have a duty to hold to account those who have disengaged from us and take action to secure an outcome for the benefit of all taxpayers.”
Individuals can anonymously report tax evasion and crime activities by completing a tip-off form on ATO website or by calling 1800 060 062.
This matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.