The ATO has issued a taxpayer alert warning people to be cautious about arrangements promoting a tax deduction for gifts of pharmaceutical items to charities for use overseas. With these schemes, the taxpayer makes a cash deposit for a vendor to purchase pharmaceuticals from a low-cost overseas supplier.
They are then valued for gifting purposes at a much higher cost. The difference in these amounts is covered by what appears to be an unsecured, long term, low-interest loan purportedly funded by the vendor. The ATO is of the view that these arrangements are not legitimate, and that those involved may face a large tax debt, substantial penalties or even prosecution.
Contact Solve Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.