Two taxpayers have been sentenced to jail terms by the NSW Supreme Court after being found guilty in February 2013 by a jury of dishonesty offences under s 29D and s 86 of the Crimes Act 1914 (Cth) and under s 135.4(3) of the Criminal Code Act 1995 (Cth) for conspiring to defraud the Commonwealth in tax avoidance scheme.
The taxpayers were directors of a company called Inform Promotions. The Court said their involvement in what had been characterised as a tax avoidance scheme during which the offences by them were committed occurred when their accountant introduced them to a scheme which led to them participating in an offshore “round robin” arrangement involving a Vanuatu company. The Court said that company was incorporated by the taxpayers in Vanuatu at the suggestion and with the assistance of their accountant. The arrangement enabled them to evade payment of both company and personal income tax, the Court said. Amounts were falsely claimed as marketing and promotion expenses. The total company and personal income tax shortfall was approximately id=”mce_marker”.17m.
The Court said it considered that no sentence other than imprisonment was appropriate, because the offending “involved deliberate and systematic and repeated acts to defraud the revenue”. After reviewing the facts and evidence presented, and considering the nature and seriousness of the offences, the Court sentenced each taxpayer to terms of imprisonment totalling over 5 years but to be released after 2 years and 6 months upon giving a $200 security without surety, by recognisance to the satisfaction of the Court.
(R v Sakovits [2013] NSWSC 464, NSW Supreme Court, Hall J, 26 April 2013.)
[LTN 81, 1/5/13]