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generally facilitated the transactions. The promoter would help the owners of a company first transfer the assets to a new company which was to continue the business, then the owners sold the old company to the promoter for the value of the untaxed accumulated profits, less an amount representing a
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Once assets were stripped, the company would be sent, metaphorically, to the "bottom of the harbour" by being transferred to someone of limited means and with little interest in its past activities. The company's records were often lost too. The ATO, being in the same position as other unsecured
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advised the ATO that the evidence was insufficient and the case was dropped. The performance of the various DCS officers was later the subject of scathing criticism, with problems arising primarily from (possibly deliberately) overworked and underskilled staff, and bad management.
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at several companies which were involved in bottom of the harbour schemes. There was no suggestion her husband improperly used his position, but the connection was close enough to be extremely embarrassing for all concerned, and the officer was dismissed.
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the
Commonwealth be brought against the promoter and two other individuals. There then followed delay upon delay, duplicated investigations, ill-prepared reports by inexperienced officers, and even a DCS officer deliberately avoiding contact with the ATO.
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The promoter would have the company pay (to the promoter) a dividend of the money it had left, then the promoter on-sold the now empty shell to someone else. The way the promoter paid the owners for undistributed profits was similar to a
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that the normal reluctance against retrospectivity was "tempered by the competing consideration of overall perceptions as to the equity and fairness of our taxation system and the distribution of the tax burden." whilst
237:, etc.), or to aid or abet any person or company doing so. The act thus caught both those in the schemes and the promoters of such schemes. It made it unnecessary in the future to address the activity as a crime of
186:. The Commission came upon bank account transactions for millions of dollars, and the "paper trail" led eventually, and among other things, to the bottom drawers of the DCS Perth.
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November, saying "I do not trust politicians to legislate retrospectively. One of the few protections that the ordinary citizen has is that he knows the law."
127:(which is adjacent to the financial district), though obviously the sense is also quite general. The actual origin of the name and the practice is not clear.
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went further, allowing for the recovery of tax avoided under bottom of the harbour tax schemes between 1 January 1972 and 4 December 1980. The
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252:. Tax matters might normally be addressed by closing a revenue loophole, the act instead treated bottom of the harbour schemes like
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in this act was controversial at the time although some argued that law was not retrospective as the tax was always payable.
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52:(ATO) stated a total 6,688 companies had been involved, involving revenue of between $ 500 million and $ 1 billion.
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256:. However, once certain behaviour has been criminalised, what was once tax avoidance (which is legal) becomes
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the
Commonwealth through the Deputy Crown Solicitor office, which up to this point had been poorly managed.
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The commission also found that the wife of one of the senior case officers at the DCS Perth was running an
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in 1980. The practice came to symbolise the worst of variously contrived tax strategies from those times.
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139:(ATO) detected a bottom of the harbour scheme was in 1973. Rod Todman, a senior investigations officer in
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fee or commission. For the owners this was the sale of a capital asset and hence untaxed (being prior to
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116:(since the promoter would be in the business of buying and selling shares) and the dividend would be
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thought the purpose noble but spoke strongly against the retrospective nature in the Senate on 19
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After five full years, in April 1979, and based on miscommunication, the Crown
Solicitor in
475:. Australian Institute of Criminology. : Australian Institute of Criminology. p. 149.
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Reynolds, Paul (April 1983). "Australian
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The DCS was uncertain of the prospects for the case, but in late 1974 had a
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Wayward governance : illegality and its control in the public sector
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put an end to bottom of the harbour schemes. Under the act it became a
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The operation at the heart of bottom of the harbour schemes involved a
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Wayward governance: illegality and its control in the public sector
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The "harbour" in the expression was usually taken as referring to
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331:"The Deputy Crown Solicitor and the bottom of the harbour scheme"
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September 1982 during the second reading of the bill in the
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operation. In any case the amount the promoter paid was a
514:"The right to protection from retroactive criminal law"
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The abandoned case came to light in only 1982 in the
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569:Taxation (Unpaid Company Tax) Assessment Act 1982
373:Trends & Issues in Crime and Criminal Justice
272:Taxation (Unpaid Company Tax) Assessment Act 1982
265:Taxation (Unpaid Company Tax) Assessment Act 1982
591:Taxation (Unpaid Company Tax—Promoters) Act 1982
248:was regarded as something less than an outright
580:Taxation (Unpaid Company Tax—Vendors) Act 1982
244:This act was controversial at the time, since
147:(DCS) in Perth for possible prosecution as a
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436:Australian Journal of Politics and History
184:Federated Ship Painters and Dockers Union
158:opinion strongly recommending charges of
76:fell due, leaving it then unable to pay.
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41:in the 1970s. Legislation made it a
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558:Crimes (Taxation Offences) Act 1980
412:Australian House of Representatives
343:Australian Institute of Criminology
215:Crimes (Taxation Offences) Act 1980
208:Crimes (Taxation Offences) Act 1980
31:Bottom of the harbour tax avoidance
18:Crimes (Taxation Offences) Act 1980
48:In its 1986/87 annual report, the
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622:History of taxation in Australia
260:(which, by definition, is not).
182:investigating activities of the
88:company, ended up with nothing.
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369:"Thinking about tax avoidance"
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229:unable to pay tax debts (
221:for any person to make a
180:Costigan Royal Commission
469:Grabosky, Peter (1989).
329:Grabosky, Peter (1989).
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193:, and that she was a
521:Criminal Law Journal
367:Potas, Ivan (1993).
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135:The first time the
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202:Legislation
97:accountants
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611:Categories
456:References
287:said on 23
239:defrauding
231:income tax
160:conspiracy
538:21 August
533:0314-1160
448:0004-9522
424:Don Chipp
395:0817-8542
358:21 August
301:Don Chipp
282:Treasurer
235:sales tax
149:test case
86:insolvent
82:creditors
56:Operation
39:Australia
512:(1989).
491:21442028
311:See also
172:Canberra
37:used in
594:on the
583:on the
572:on the
561:on the
298:Senator
223:company
164:defraud
93:lawyers
70:profits
62:company
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254:frauds
66:assets
517:(PDF)
250:crime
227:trust
141:Perth
540:2017
529:ISSN
487:OCLC
477:ISBN
444:ISSN
391:ISSN
381:ISBN
360:2017
347:ISBN
270:The
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