ATO issues warning on GST falsifications

THE Australian Taxation Office (ATO) is warning it is on watch for businesses committing GST fraud, making dishonest claims and falsifying invoices this tax season.

Assistant Commissioner Adam O’Grady said the fraud was presently predominantly within the property and construction industry.

“We’ve also identified early signs of it proliferating in other industries, particularly by privately owned and wealthy groups.

“Despite warnings from the Serious Financial Crime Taskforce late last year, recent observations show dishonest claims involving false invoicing are growing.”

This is not related to a GST fraud scheme that was promoted through social media where individuals created fake businesses and lodged BAS statements to obtain GST refunds. This warning is about real businesses creating disingenuous invoices to gain over-inflated GST refunds.

“While the numbers of businesses involved are relatively small, some are attempting to claim tens of millions of dollars in GST refunds they’re not entitled to,” Mr O’Grady said.

The ATO has released Taxpayer Alert TA 2025/2 to put businesses engaging in these concerning arrangements on notice and to warn businesses not to engage in these types of arrangements.

“Most businesses do the right thing. What these others are doing is simply not fair. We’re dealing with dishonest and deliberate attempts to cheat the tax system,” Mr O’Grady said.

“We will not tolerate this fraudulent behaviour deliberately undermining the system or providing an unfair advantage over honest businesses.

“Those involved will face consequences, including interest charges, penalties, fines, and where appropriate, prosecution, or referral to the Commonwealth Director of Public Prosecution.”

The ATO has observed arrangements where a business colludes with another related business to create a false invoice, in an attempt to justify an overly inflated GST refund.

These incude:

Entities claiming GST credits for the development and construction costs of industrial buildings that never occurred

Entities claiming GST credits for intangible services such as “management fees” that were never provided

Entities claiming GST credits for property acquisitions before they occurred

Multiple entities claiming GST credits for the same invoice, and

In the worst cases, invoices that are completely fictitious.

“Often these schemes are dressed up and sold as clever schemes with a figleaf of technical analysis – but any scheme which generates GST refunds through paper shuffling is likely to be ineffective at best, and civilly and criminally actionable fraud at worst,” Mr O’Grady said.

“If it’s too good to be true, it probably is.” If you suspect another business of being involved in these arrangements, head to ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/what-you-can-do or phone 1800 060 062.

If you are involved, the ATO advises you to come forward and make a voluntary disclosure rather than wait to be contacted. Early co-operation and making a voluntary disclosure may reduce the penalties imposed.