ATO warns about barter credit tax scheme
The ATO is warning the community to steer clear of an emerging tax scheme involving barter credits — a type of alternative currency used in some business networks.
A tax scheme that involves artificially inflating deductions for donations of barter credits to deductible gift recipients (‘DGRs’) is on the rise.
While it may seem enticing, promoters and taxpayers could face potentially significant consequences if they are involved.
The ATO is concerned that such schemes are being enabled by several barter exchanges that are allowing participants to access barter credits with a nominal face value that is much more than any payments actually made to the exchange. Participants then donate these barter credits to a DGR and claim a larger tax deduction than they are entitled to.
Those involved may have to repay the tax, plus face heavy penalties, interest and legal action.
If you’re unsure whether a barter-credit offer is legitimate, speak with us before you take part — Omnis can review the arrangement and help you avoid costly ATO penalties.
