Reckless Conduct - State Tax Penalties for Australian businesses & investors
- Future Accounting
- Jul 29
- 2 min read
Updated: Aug 12
Understanding Aussie State Tax Penalties for Reckless Conduct
What is reckless conduct in tax?
Reckless conduct sits between carelessness and fraud. It refers to situations where a person does not take reasonable care, resulting in underpaid or misreported tax obligations. Australian states treat this seriously - even if the intent wasn’t dishonest.
Common examples include:
Not including all landholdings for land tax
Misclassifying employees to reduce payroll tax
Structuring transactions to hide beneficial ownership
3 Types of taxes affected by reckless conduct
Stamp duty
Undervaluing a property transaction
Failing to disclose trust structures
Lodging documents after deadlines
Land tax
Omitting properties from declarations
Claiming incorrect exemptions (like main residence)
Misreporting ownership details
Payroll tax
Under-reporting wages or superannuation
Misclassify contractors as non-employees
Omitting fringe benefits from declarations
How states penalise reckless tax behaviour:
New South Wales
Penalties range from 25% to 75% for reckless behaviour
Intentional disregard can attract up to 90% penalty
Victoria
50% penalty for recklessness
Up to 90% for deliberate actions or intentional disregard
Voluntary disclosure may reduce penalties
Queensland
50% penalty for reckless conduct
Aggravated or repeat behaviour may increase penalties
South Australia
50% penalty for recklessness
Up to 90% for intentional disregard
Western Australia
25% penalty for lack of reasonable care
50% penalty for reckless conduct
Over 75% for intentional misreporting
Interest may also be charged
Tasmania, ACT and NT
25% penalty for carelessness
50% penalty for recklessness
Up to 90% for intentional tax avoidance
How to protect yourself and your business
Staying compliant with state-based tax rules doesn't need to be overwhelming. The key is knowing your obligations and addressing any gaps in your systems.
Here’s how to reduce your risk:
Always make full and accurate disclosures
Seek professional advice for complex arrangements or structures
Voluntarily report any errors as soon as you discover them
Keep detailed, up-to-date records
Final thoughts: Be proactive, not penalised
State revenue offices across Australia take non-compliance seriously. Understanding reckless conduct state tax penalties in Australia is essential if you're a business owner, property investor, or trustee. Even without deliberate wrongdoing, the cost of getting it wrong can be steep.
Don't leave your business exposed. If you're unsure about your state tax obligations or want to double-check that everything’s in order, we're here to help. Reach out to our team for practical advice and proactive support - before small mistakes turn into costly penalties.
