Collection Consultancy Australia

Australia Tax Office Compliant Div 7A Loan Agreements (2024)

Overview

Div 7A Loan Agreements are now being put under the Microscope by the Australian Taxation Office in an effort to identify potential Tax avoidance by company directors and shareholders. It is more important than ever to ensure business owners and directors have a formal agreement in place to negate potential tax liabilities.

Div 7A Loan Agreement is called a Div 7A Loan Agreement as it relates to Division 7A of Part lll of the Income Assessment Act 1936. Division 7A of Part lll of the Income Assessment Act 1936, in particular Division 7A of the Corporations Act, allows for a business to loan money to the directors, shareholders, or associates of shareholders.

These loans are used for a number of reasons and are usually implemented in conjunction with the accountant of a business rather than the director themselves due to the potential taxation liabilities. The reason we have released these Div 7A Loan Agreements is basically just to formalise them.

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