False invoicing arrangements come undone

The Serious Financial Crime Taskforce has taken action against false invoicing arrangements.

Last month, we worked with the Australian Federal Police (AFP) as part of the Serious Financial Crime Taskforce (SFCT) to take action against individuals and businesses we suspected of being involved in false invoicing arrangements.

We also conducted access without notice visits on 5 sites in New South Wales and Victoria, targeting others suspected of taking part in these arrangements.

This action supports a new intelligence bulletin issued by the SFCT.

What is a false invoicing arrangement?

A false invoicing arrangement is a scheme where one entity issues another with an invoice, but provides no goods or services. For example:

• An entity (the promoter) issues invoices to a legitimate business without providing any goods or services.
• The business pays the invoices by cheque or direct transfer. The promoter then pays back most of this money as cash, less an amount they keep as a commission.
• The business claims deductions and GST credits from the false invoice.
• The business uses the cash they receive, either for private purposes or to pay cash wages to workers, without reporting the amounts in their tax returns.

SFCT Chief John Ford said:

We are aware that businesses and individuals are becoming involved in financial arrangements such as false invoicing to evade their tax and super obligations. Not only are these arrangements illegal, but they also take vital funds away from services such as healthcare, education and infrastructure. If you are involved in a false invoicing arrangement, we encourage you to come forward and make a voluntary disclosure before we come to you. If you come forward and assist in our investigations, we may be able to reduce your penalties.

To find out more, visit ato.gov.au/falseinvoicing or read the media release.