Identify the suspected criminal conduct
FATF includes tax crimes relating to direct and indirect taxes among its designated categories of offences. Proceeds are property derived from an offence, directly or indirectly.
These international terms do not decide whether an Australian offence occurred. An unpaid tax amount or incorrect return alone does not establish money laundering.
Separate an error from a supported suspicion
A reviewer needs facts about the conduct and money. An accounting difference may reflect an error, timing issue or dispute.
A suggested review records the explanation, supporting documents and any conflict. Staff should not invent an offence finding to fill a gap in the records.
Section 41 includes information relevant to tax evasion or attempted evasion among its suspicion grounds. The reporting test does not require proof of a conviction.
Source: Federal Register of Legislation: Section 41(1)(f)(i) and (ii).
- Difference
Record the transaction or accounting inconsistency.
- Evidence
Assess the explanation and supporting records.
- Decision
Apply the reporting test to the facts.
From a difference to a decision
A record difference is a starting point. It is not a tax-crime or money-laundering verdict.
Connected concepts. Lines do not show ownership or a reporting hierarchy.
Invented example: a refund with an incomplete record
An invented business example concerns a payment described as a refund. The record supplied to the reviewer does not explain the original payment.
The reviewer asks for the original payment record and the reason for the refund through the approved process. It records the answer and supporting evidence.
A missing record or incorrect description may explain the difference. The reviewer does not infer tax crime from the gap. If the facts support reasonable suspicion, the reporting decision follows the applicable test and deadline.
Source: Federal Register of Legislation: Section 41(1)(f)(i) and (ii).
Keep the tax and AML decisions distinct
The article concerns a possible connection between offences. It does not determine the tax treatment of an arrangement.
A tax adviser, reporting entity and court have different roles. Use the relevant legal test for the decision that belongs to each role.