A Victorian woman has today been sentenced to two years and ten months in jail for Goods and Services Tax (GST) fraud of $1.7 million.
Between 2005 and 2011, Ms Simone Semmens, a former TV presenter and beauty queen, purchased, developed and sold ten luxury properties in Toorak, Portsea and Caulfield North.
Ms Semmens carried out extensive work on the properties, developing and subdividing them before selling them for a profit. She sold these properties for more than $20 million and made a total profit of more than $4.4 million.
She claimed the properties were for personal use, but she was carrying on a business and should have been registered for GST, lodging Business Activity Statements (BAS) and reporting the property sales.
By choosing not to, she evaded paying $1,738,636 in tax.
The ATO is using this as an opportunity to remind people that flipping properties for profit can count as running a business, requiring you to register for GST and lodge BAS.
"If you are buying, selling or developing a property that isn't your primary residence, you have tax obligations," Assistant Commissioner and head of the ATO's Criminal Law Program Ian Read said.
"There are many TV shows that make flipping properties look like a fun and lucrative thing to do. People also need to be aware of their tax obligations."
You are required to register for GST if the turnover from your property transactions is more than the GST registration threshold of $75,000 and if you buy land or property with the intention of developing it for resale at a profit.
"We know most people try to do the right thing, and we will support people who do. But to ensure the community doesn't miss out on essential funding and to protect the integrity of the system, we have to crack down on those who deliberately do the wrong thing," Mr Read said.
In the case of Ms Semmens, this is someone who was knowingly carrying on an enterprise. She set up Semco Developments Pty Ltd as a property development company to purchase, renovate and sell houses. She was aware of her tax obligations and chose to dishonestly evade paying over $1.7 million in GST.
Mr Read said the sentence handed down today sends a clear message to those who try and cheat the tax system.
"This wasn't a one-off property sale; this is a case of someone deliberately carrying on an enterprise without meeting their tax obligations.
"People like this are obtaining an unfair advantage over Australians who are doing the right thing and robbing the Australian economy of revenue that could have been spent on essential services. Tax crime is not victimless and we will not tolerate when people try to cheat the tax system."
Ms Semmens was convicted of 10 offences of dishonestly causing a loss to the Commonwealth contrary to section 135.1 (5) of the Criminal Code (Commonwealth).
If a taxpayer suspects or is aware of anyone who is involved in tax fraud, they can report it confidentially at ato.gov.au/tipoff or call 1800 060 062.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Find out about your GST and property responsibilities on the ATO website or use our GST property decision tool.
