Mastering tax compliance in Melbourne: Professional insights from Damian Sellitti

Understanding tax compliance in Melbourne

Businesses in Melbourne can face numerous challenges when it comes to managing their tax obligations. 

Navigating the complexities of Australian tax laws requires expertise, foresight and a strong governance framework. Damian Sellitti, a Partner in the Corporate Tax team at RSM Australia, shares his insights on mastering tax compliance obligations. 

The importance of tax compliance for business

Tax compliance plays a pivotal role in the sustainability and success of businesses. It ensures that companies operate fairly within the marketplace and contribute their fair share to essential public services. By fulfilling their tax obligations, businesses help fund critical infrastructure such as well-maintained roads, effective healthcare systems, and quality education, all of which are vital components of a robust economy.

Moreover, maintaining transparency in business operations is equally important. Businesses should diligently keep comprehensive and accurate records of their financial activities and report these to relevant authorities. This commitment to transparency not only showcases a company’s responsibility but also builds confidence and trust with the Australian Taxation Office (ATO). Conversely, attempts to evade tax responsibilities can lead to serious legal repercussions, which can have devastating effects on your business’s reputation and financial stability.

Damian stresses this point, adding, 

"In the current climate, negative public perception or a poor relationship with the ATO can cost a business more than the tax they would have otherwise paid.” 

Proactive tax planning is best

Contrary to popular belief, tax planning isn't just about minimising tax liability. Damian emphasises that effective tax planning involves understanding compliance obligations, identifying key risks and opportunities and knowing when to seek professional help. 

“One of the worst things you can do is consider tax at the last minute. Stakeholders should be aware and understand all material tax risks and opportunities prior to making any key business decisions”. 

This proactive approach helps businesses make informed decisions, maximise opportunities and avoid costly mistakes. 

To navigate the complexities of taxation while ensuring compliance, it is beneficial to focus on legitimate tax planning strategies. Engaging with qualified tax practitioners can provide invaluable insights and identify opportunities to optimise your tax position, all while adhering strictly to the law. This proactive approach allows businesses to leverage their financial resources effectively, ensuring long-term growth and success.

Local tax challenges for businesses based in Victoria

Victoria's business environment presents unique tax challenges. Damian highlights that the state's high taxes, along with additional levies such as the COVID debt repair, make it increasingly difficult for businesses to operate efficiently in the region. 

“We're seeing businesses reconsider establishing operations in Victoria due to the significant tax burden compared to other states and territories,” Damian notes. 

“Victoria's tax system, along with Australia’s overall tax structure, needs to evolve if we want to remain competitive on a global scale. Simplifying the tax system and considering its competitiveness is essential for attracting investment and driving economic growth.”

Seeking assistance from seasoned tax experts, such as Damian Sellitti, is essential. RSM possesses local expertise that can significantly enhance your business's understanding and navigation of Victorian and Federal tax law.

Tax reform and lobbying for change

Damian believes that businesses should actively participate in advocating for tax reforms, especially given the overly complex laws that can be interpreted in numerous ways and the constantly changing tax landscape. 

“The current system is fundamentally broken—there is excessive complexity and red tape. We need significant changes to simplify compliance and lessen the burden on businesses. We have repeatedly witnessed taxpayers making mistakes simply because the application of specific legal provisions to their situations is too complex and confusing.”

The value of strong governance and professional support 

In today’s complex tax environment, businesses must go beyond just focusing on tax minimisation strategies. Damian emphasises the importance of understanding compliance, maintaining strong internal governance, and fostering a positive relationship with the ATO. By adhering to these principles, businesses in Melbourne can effectively navigate both local and global tax challenges, setting the stage for long-term growth and success.

The Australian tax system can often feel like a minefield due to its complicated laws and constant changes. 

Damian encourages businesses to collaborate closely with their tax advisers, stating, “Mastering tax compliance is about understanding when you’re in over your head and knowing when to bring in external expertise.” 

For businesses looking to master tax efficiency, RSM’s team of experts is ready to provide the guidance and support needed to stay compliant and competitive.