A recent report by PricewaterhouseCoopers estimates that, in the 2015-16 financial year, the direct cost of illegal phoenix to the Australian Government is $1.66 billion, including unpaid taxes and compliance costs.
The report, The Economic Impacts of Potential Illegal Phoenix Activity, also estimates the cost to business is in the range of $1.162 billion to $3.171 billion and the cost to employees is $31 million to $298 million.
Illegal phoenix activity occurs when a company is deliberately liquidated to avoid paying creditors, taxes and employee entitlements. The company then transfers the assets to a new entity, and continues to operate the same or a similar business under the same ownership.
The report is commissioned by the Australian Taxation Office (ATO), Fair Work Ombudsman (FWO) and the Australian Securities and Investments Commission (ASIC).
The Economic Impact of Potential Illegal Phoenix Activity report
Recent Comments